TMI Blog2021 (8) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... 2015 (7) TMI 874 - KARNATAKA HIGH COURT] allowed the claim of the assessee on interest earned by them on the investments made in banks as deductible u/s 80P and these decisions were passed on 28.10.2014 and 09.06.2015. The issue of claiming interest on bank deposits by Co-operative Societies are already settled in favour of the assessee, now the Ld. Pr. CIT raising such settled issued u/s 263 in this assessment year with the findings that AO has not made inquiries in these transactions. In our view revisiting the settled issue and this issue was considered by the AO and passed the relevant assessment order by relying based on the submissions of the assessee that this interest was allowed in the previous assessment years and covered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the above deduction claimed by the assessee u/s 80P and the total income was assessed at ₹ 20,76,874/- 3. The Ld. Pr. CIT-29, Mumbai on verification of the order passed by the Assessing Officer u/s 143(3) of the Act, observed that in the original assessment, the Assessing Officer notices from income and expenditure account that assessee had made investment in the various banks including Co-operative Banks and earned interest income of ₹ 24,75,98,759/- on bank deposits and other income of ₹ 13,78,137/-. Ld. Pr. CIT observed that the assessee has not offered the same for taxation and claimed exemption u/s 80P(2)(a), 80P(2)(d) and 80P(2)(e) of the Act, which was allowed by the Assessing Officer and no addition was made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vkripa Sahakan Patpedhi Ltd is a registered co-operative society, registered by the Registrar of co-operative societies, Mumbai. The main object of the society is providing credit facilities to its members and collect deposits from them. The gross total income includes any income referred to in subsection (2), in computing the total income of the assessee. As per section 80P(2)(a)(i)(d) in respect of any income by way of interest or derived by co-operative society fromits investment with other co-operative society, whole of such income is exempt from income fax Act, 1961. In prison case the Shivkrupa Sahakari Paipedhi Ltd has claim the total income of ₹ 15,02,44,210/- as EXEMPT u/s 80P(2)(a)(i) (d) as exempt income. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . CIT rejected the submissions of the assessee and observed that the assessee had received interest income on bank deposits and other income during the relevant assessment year and this income was not offered by the assessee for taxation. The interest earned by way of investment in Co-operative Banks and other banks and other income was not eligible for deduction u/s 80P(2)(a) of the Act. He further observed that the income derived by way of interest from fixed deposits and saving accounts with Co-operative Banks and other banks falls under the head income from other sources and it cannot fall within the expression profit and gains of business, therefore, is not admissible for deduction u/s 80P(2)(a), (b) (d) whereas if its income f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143(3) of the IT Act, 1961 is neither erroneous nor prejudicial to the interest of the revenue, 3. The learned PCIT-29, Mumbai erred in law and on facts in holding that following income ought to have been offered under Income from Other Sources , instead of Profits and Gains of Business and Profession and the said income is not eligible for deduction u/s 80P(2)(a) of the ITA, 1961: a) Interest Income - ₹ 24,75,98,759/- b) Commission Income - ₹ 13,78,136/- 4. The learned PCIT-29,Mumbai erred in lawand on facts in applying the ratio of the judgment of the Honorable Supreme Court in the case of Totgars Co-o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Hon ble High Court has allowed the interest income earned by the assessee on such deposits with the banks. Similarly, he brought to our notice 89 of the Paper Book to submit the Hon ble Karnataka High Court in the case of TumkurMerchants Souharda Credit Co-operative Ltd. v. Income Tax Officer Ward-V [2015] 55 taxmann.com 447 (Karnataka) submit that Cooperative Society was engaged in the activity of carrying of business of providing credit facilities to its members and the amount not immediately required to be lent the members was invested in banks to earn interest. The Hon ble High Court has allowed the assessee to claim deduction u/s 80P(1) of the Act. He submitted that the issue under consideration is already settled in favour of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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