TMI Blog2020 (12) TMI 926X X X X Extracts X X X X X X X X Extracts X X X X ..... ty [ 2017 (7) TMI 1049 - KARNATAKA HIGH COURT] has taken a contrary view holding that interest income earned from deposit with the cooperative bank does not qualify for deduction under section 80P(2)(d) of the Act. It would be relevant to mention here that the Hon'ble High Court while rendering the later judgement has not considered the earlier decision rendered in the case of Totagars Co-operative Sale Society (supra). No judgement from Hon'ble Jurisdictional High court on the issue of eligibility of deduction under section 80P(2)(d) of the Act on interest income derived by a Cooperative Society from a Cooperative Bank has been brought to our notice. The Hon'ble Bombay High Court in the case of K. Subramanian Vs. Siemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 961 ( in short the Act ). The Assessing Officer in scrutiny assessment proceedings disallowed assessee s claim of deduction under section 80P(2)(d) of the Act on the ground that after insertion of sub-section (4) to section 80P, the Co-operative Banks have been taken outside the purview of section 80P of the Act. Aggrieved by the assessment order dated 22/12/2012 passed under section 143(3) of the Act, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of assessee and upheld the findings of Assessing Officer by placing reliance on the judgment of Hon ble Karnataka High Court in the case of Totagars Co-Operative Sale Society reported as 395 ITR 611. Hence, the present appeal by the assessee. 3. Ms. Kavita P. Kau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y herein reproduce the relevant extract of the said statutory provision, viz. Sec. 80P(2)(d), as the same would have a strong bearing on the adjudication of the issue before us: 80P(2)(d) (1) Where in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sum specified in sub-section (2), in computing the total income of the assessee. (2) The sums referred to in sub-section (1) shall be the following, namely :- (a) to (c)** (d) in respect of any income by way of interest or dividends derived by the co-operative society from its investments with any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion under the aforesaid statutory provision, viz. Sec. 80P(2)(d) would be duly available. We may herein observe that the term 'co-operative society' had been defined under Sec. 2(19) of the Act, as under:- '(19) Co-operative society means a cooperative society registered under the Cooperative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any state for the registration of co-operative societies;' We are of the considered view, that though the cooperative bank pursuant to the insertion of Subsection (4) of Sec. 80P would no more be entitled for claim of deduction under Sec. 80P of the Act, but however, as a co-operative bank continues to be a cooperative society registered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... beyond any scope of doubt, that the purpose behind enactment of sub-section (4) of Sec. 80P was to provide that the co-operative banks which are functioning at par with other banks would no more be entitled for claim of deduction under Sec. 80P(4) of the Act. We are of the considered view that the reliance placed by the CIT (A) on the judgment of the Hon'ble Supreme Court in the case of Totgars Co-operative Sale Society Ltd. (supra) being distinguishable on facts, thus, had wrongly been relied upon by him. The adjudication by the Hon'ble Apex Court in the aforesaid case was in context of Sec. 80P(2)(a)(i), and not on the entitlement of a co-operative society towards deduction under Sec. 80P(2)(d) on the interest income on the invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court of Bombay in the case of K. Subramanian v. Siemens India Ltd. [1983] 15 Taxman 594/[1985] 156 ITR 11 (Bom), where there is a conflict between the decisions of non-jurisdictional High Court's, then a view which is in favour of the assessee is to be preferred as against that taken against him. Thus, taking support from the aforesaid judicial pronouncement of the Hon'ble High Court of jurisdiction, we respectfully follow the view taken by the Hon'ble High Court of Karnataka in the case of Totagars Cooperative Sale Society (supra) and Hon'ble High Court of Gujarat in the case of State Bank Of India (supra), wherein it was observed that the interest income earned by a cooperative society on its investments held with a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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