TMI Blog2021 (1) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... ments with the cooperative banks is allowed. Appeal of the assessee is allowed. - ITA No. 1950/Mum/2019 - - - Dated:- 29-10-2020 - Shri Vikas Awasthy, JM And Shri Rajesh Kumar, AM For the Appellant : None For the Respondent : Shri Vodal Raj Singh, DR ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-18, Mumbai [in short the CIT(A) ] dated 14.03.2019 for the Assessment year 2014-15. 2. The solitary issue raised by the assessee in appeal is against disallowance of assessee s claim of deduction under section 80P(2)(d) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) in respect of interest income derived from deposits with cooperative bank. 3. The brief facts of the case as emanating from the records are: The assessee is a Cooperative Housing Society. During the period relevant to Assessment Year under appeal, the assessee received interest income from cooperative bank as well as nationalized bank. The assessee claimed deduction under section 80P(2)(d) of the Act in respect of interest income earned from banks. In scrutiny assessment proceedings, the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the sums 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 other co-operative society, the whole of such income; Thus, from a perusal of the aforesaid Sec. 80P(2)(d) it can safely be gathered that income by way of interest income derived by an assessee co-operative society from its investments held with any other cooperative society, shall be deducted in computing the total income of the assessee. We may herein observe, that what is relevant for claim of deduction under Sec. 80P(2)(d) is that the interest income should have been derived from the investments made by the assessee co-operative society with any other cooperative society. We though are in agreement with the observations of the lower authorities that with the insertion of Sub-section (4) of Sec. 80P, vide the Finance Act, 2006, with effect from 01.04.2007, the provisions of Sec. 80P would no more be applicable in relation to any co-operative bank, other than a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh 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), had also held that the interest income earned by the assessee on its investments held with a co-operative bank would be eligible for claim of deduction under Sec. 80P(2)(d) of the Act. Still further, we find that the CBDT Circular No. 14, dated 28.12.2006, as had been relied upon by the ld. A.R, also makes it clear 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. The Pune Bench of the Tribunal in the case of Majalgaon Sahakari Sakhar Karkhana Ltd. vs. ACIT [2019] 105 taxmann.com 100 (Pune - Trib.) has taken a similar view in respect of interest and dividend income derived from investment with cooperative bank. The relevant extract of the findings of the Tribunal are as under: - 24. In some of the appeals the issue of deduction under section 80P of the Act on interest and dividend income is also involved. The assessee claimed deduction u/s.80P(2)(d) of the Act on interest and dividend received from Co-operative Society on Savings Bank accounts. The AO did not allow such deduction. The ld. CIT(A) overturned the assessment order on this point and granted deduction. The Revenue is aggrieved by such allowing of deduction. 25. We have heard both the sides and gone through the relevant material on record. Relevant part of section 80P reads as under : - 80P. (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 sums specified in sub-section (2), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court while rendering the later judgement has not considered the earlier decision rendered in the case of Totagars Co-operative Sale Society (supra). 9. 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 Co-operative Society from a Cooperative Bank has been brought to our notice. The Hon'ble Bombay High Court in the case of K. Subramanian Vs. Siemens India Ltd. 156 ITR 11 has held that when two conflicting decisions of non-jurisdictional High Courts are available, the view that favours the assessee is to be preferred. Accordingly, following the decision of Hon'ble Karnataka High Court in the case of Totagars Co-operative Sale Society (supra) and the decision in the case of Hon'ble Gujarat High Court in the case of Vankar Sahakari Sangh (supra) the deduction claimed by the assessee under section 80P(2)(d) of the Act in respect interest derived from investments with the cooperative banks is allowed. We find merit in the contention raised by the assessee. The impugned order is set aside and the appeal of assessee is allowed. 10. In the result, appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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