TMI Blog2021 (5) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT MUMBAI] , Sea Green Co-operative Housing Society Ltd.[ 2017 (3) TMI 1728 - ITAT MUMBAI] Merwangeecama Park Co-operative Housing Society Ltd. Vs. ITO [ 2017 (10) TMI 58 - ITAT MUMBAI] . After going through all the decisions, the CIT(A) has held that the interest income from the deposit with the Co-operative Bank is liable to be exempt u/s 80P(2)(d) of the Act. Moreover, we noticed that the issues have duly been covered with the assessee s own case for the A.Y.2013-14. [ 2017 (9) TMI 564 - ITAT MUMBAI] Thus finding of the CIT(A) is quite correct which is not liable to be interfere with at this appellate stage. Accordingly, we affirm the finding of the CIT(A) on these issues and decide these issues in favour of the assessee against the revenue. - I.T.A. No. 2394/Mum/2019 - - - Dated:- 8-4-2021 - Shri M. Balaganesh, AM And Shri Amarjit Singh, JM For the Assessee : Shri Niraj Sheth (AR) For the Revenue : Shri Gurbinder Singh (DR) ORDER PER AMARJIT SINGH, JM: The revenue has filed the present appeal against the order dated 22.02.2019 passed by the Commissioner of Income Tax (Appeals) -33, Mumbai [hereinafter referred to as the CIT(A) ] relevan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of the CIT(A) is not justifiable and is liable to be set aside. However, on the other hand, the Ld. Representative of the assessee has strongly relied upon the order passed by the CIT(A) in question. Before going further, we deem it necessary to advert the finding of the CIT(A) on record.:- 6. I have carefully perused the facts highlighted in the assessment order, the written submission filed by the appellant during appellate proceedings and various judicial pronouncements available on the issues under appeal. My observations and findings are as under: 6.1 The relevant provisions of Section 80P is as under- Deduction in respect of Income of Co-operative societies 80P. (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), in computing the total income of the assessee. (2) The sum referred to in sub-section (1) shall be the following, namely:- (a) In the case of a co-operative society engaged in (i) carrying on the business of banking or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. Interest income was earned by the assessee from deposits in the Co-operative Banks. The issue before the Court was whether for the purpose of Section 80P(2)(d), a co-operative Bank is to be considered as a co- operative society. The Court held that the co-operative bank is merely a variety of the co-operative society and hence included in the same and therefore interest earned from co-operative bank would be deductable u/s 80P(2)(d). c) PCIT vs. Totagars Co-operative Sale Society 120171 395 ITR 611 (Karnataka) / (2017) 83 taxmann.com 140 (Karnataka) The assessee was a co-operative credit society and its business was to provide credit facilities to its members and to market their agricultural produce. Interest income was earned by the assessee from deposits in the Co-operative Banks. The issue before the Court was whether interest earned from co-operative bank would be deductable u/s 80P(2)(d). The Court held that the words 'co-operative Banks' are missing in clause (d) of sub-section (2) of Section 80P. The exclusion of cooperative bank by Section 80P(4) even without any amendment in Section 80P(2)(d) is sufficient to deny claim under section 80P(2)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lement of a co-operative society towards deduction under section 80P(2)(d) on investments parked with a co-operative bank. 7. Considering the provisions of the Income-tax Act under section 80P and section 2(19) and aforesaid judicial pronouncements, I am of the view that the co-operative hank is a type of co-operative society which gets license from RBI to conduct banking business. Section 80P(4) denies deduction of an assessee if it is co-operative bank. However, the deduction in respect of interest earned by a co-operative society from deposits investments made with a co-oparative bank is allowable u/s 80P(2)(d) and the same is not affected or controlled by Section 80P(4). Therefore, it is held that the assessee is eligible for deduction of ₹ 1,67,21,795/- in respect of interest earned on its investments with the co-operative banks u/s.80P(2)(d). 8. The appellant has also filed additional ground against order of AO denying deduction of ₹ 50,000/- u/s 80P(2)(c)(ii). The AR also informed that rectification petition in this regard is pending with the AO. In view of the above, the AO is directed to dispose the rectification application as per law. 5. On app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation Act . It is also regulated by State Government and RBI. Primary Cooperative Banks, popularly called Urban Co-operative Banks, whose net worth is ₹ 1,00,000/- and above, who are recognized as banks, are members of payment system and also enjoy deposit insurance. Also some Urban Cooperative Banks are conferred with Scheduled status by the RBI. 7.2 We find that the above factual aspects have not been examined either by the AO or the Ld. CIT(A). Therefore, we deem it proper to set aside the order of the Ld. CIT(A) and restore the matter to the file of the AO to make a fresh assessment after examining the facts mentioned at para 7.1 here-in-above. Needless to say, the AO would give a reasonable opportunity of being heard to the assessee before finalizing the assessment order. The assessee is directed to file the required details before the AO. As we have restored the matter to the file of the AO to make a fresh assessment, we are not adverting to the case laws relied on by both the sides. 6. The tribunal order for AY 2013-14 had been considered by CIT(A) while granting relief to assessee in this year. Therefore, we are of the view that the finding of the CIT(A) i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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