TMI Blog2021 (4) TMI 913X X X X Extracts X X X X X X X X Extracts X X X X ..... interest income earned from bank deposits as income under the head other sources. Denial of deduction u/s 80P of the Act in respect of commission income earned on sale of e-stamps - HELD THAT:- Section 80P(2)(c) prescribes deduction in the case of a co-operative society engaged in activities other than those specified in clause (a) or clause (b). It further states that the deduction u/s 80P(2)(c) is allowable to so much of its Profits and gains attributable to such activities as does not exceed the amount prescribed. Thus the quantum of deduction is the amount of profits and gains attributable to the activities subject to the maximum amount prescribed therein - the assessee would be eligible for deduction u/s 80P(2)(c) of the Act in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are stated in brief. The assessee originally filed its return of income declaring nil total income after claiming deduction u/s 80P of the Act. In assessment year 2013-14 2014-15, the A.O. rejected the claim for deduction u/s 80P of the Act. Consequently, the A.O re-opened the assessment of year under consideration by issuing notice u/s 148 of the Act. In the reopened assessment, the A.O. rejected the claim for deduction u/s 80P of the Act by holding that the assessee is dealing with Nominal members and hence, fails in the Principle of mutuality. In support of this proposition, the AO placed his reliance on the decision rendered by Hon ble Supreme Court in the case of Citizen Cooperative Society Ltd. (250 Taxman 78). Accordingly, the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal before the Tribunal. 4. Before the Tribunal, the assessee has raised a legal issue challenging the validity of re-opening of assessment besides contesting the disallowance of deduction u/s 80P(2)(c) and 80P(2)(d) of the Act. 5. I first take up the issues urged on merits. With regard to claim for deduction u/s 80P(2)(d) of the Act, the Ld. A.R. submitted that the Hon ble Karnataka High Court has passed an order in the case of Totgars Co-operative Sales Society Ltd. (58 Taxmann.com 35), consequent to the setting aside of the issue relating to deduction u/s 80P(2)(d) of the Act to its file by Hon ble Supreme Court. The Hon ble Karnataka High Court has held in the case reported in 58 taxmann.com 35 that the assessee is eligible for d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fixed deposits kept with bank. We noticed earlier that the A.O. has observed in Assessment Year 2015-16 that the interest income received by the assessee from deposits kept with banks is not eligible for deduction u/s 80P(2)(c) 80P(2)(d) of the Act since the assessee is not eligible for deduction u/s 80P(2)(a)(i) of the Act. In AY 2016-17, the AO assessed the interest income received on bank deposits under the head Income from other sources and denied deduction claimed u/s 80P(2)(d) of the Act. The Ld CIT(A) confirmed the action of the AO on this issue. 8. The Ld. A.R. submitted that the assessee is entitled to claim deduction allowable u/s 57 of the Act in respect of cost of funds and proportionate administrative and other expen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n). Accordingly, we direct the A.O. to allow deduction of proportionate cost, administrative and other expenses, if the A.O. proposes to assess the interest income earned from bank deposits as income under the head other sources . Following the above said decision of the Tribunal, we set aside the order passed by Ld CIT(A) on this issue and restore the same to the file of the AO with the direction to allow deduction of proportionate cost, administrative and other expenses, if the A.O. proposes to assess the interest income earned from bank deposits as income under the head other sources. 8. The next issue relates to the deduction claim u/s 80P(2)(c) of the Act in respect of commission income earned on sale of e- stamps. I notice t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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