9911796707
TMI Blog2021 (8) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee filed return of income and claimed deduction of a sum of Rs. 1,70,31,095/- under section 80P(2)(1)(i) of the Income Tax Act, 1961 (hereinafter called 'the Act'). 3. In the course of assessment proceedings, the AO noticed that the assessee had claimed a sum of Rs. 1,00,93,101/- being interest received from investment of surplus funds in deposits and securities with nationalized banks (Punjab National Bank and Syndicate Bank), Cooperative Banks and others. According to the assessee, the aforesaid interest income is also eligible for deduction under section 80P(2)(a)(i) of the Act. The AO held that since the interest income was earned from non-members, the deduction claimed cannot be allowed. The AO also examined whether the inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of 3221TR283(SC). * 80P section applies only when the income is from business or operational income and not assessable under some other head. * Section 80P(4) excludes the applicability of section 80P of IT Act altogether to any co-operative Bank and the term used is "relation to". * 194A(3)(v) of IT Act also amended to make TDS provisions applicable to Cooperative Banks, thus it made the legislative intent very clear that Co-operative bank is not a specie of Cooperative society. * Deduction provision needs to be strictly construed. * Merely because the investments have been shifted to Cooperative Bank does not mean the Hon. SC decision would not apply. * Distinguished the judgement of the earlier Kar High Court judgment in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ieties Act from out of the profits besides 25% of the total deposits as SLR with co-operative banks and 3% of the total deposits towards CRR and thus, the income earned therefrom ought to have been assessed as part of the business of the providing credit facilities to its members and not under the head 'Other Sources" under the facts and in the circumstances of the appellant's case. 4. Without prejudice to the above, the learned CIT[A] ought to have appreciated that the investment made by the appellant in co-operative banks would qualify for deduction u/s. 80P[4] and the same ought to have been allowed under the facts and in the circumstances of the appellant's case. 5. Without prejudice to the above, the learned CIT[A] ough ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t issue relates to the claim of deduction u/s 80P(2)(a)(i) of the Act. We notice that an identical issue has been considered by the co-ordinate bench in the case of Karkala Co-op S Bank Ltd (supra), wherein an identical issue has been restored to the file of AO for examining it afresh. For the sake of convenience, we extract below the relevant observations made by the co-ordinate bench:- "4. The Ld. A.R. submitted that the law on deduction of 80P(2)(a)(i) of the Act available to credit co-operative societies has since been settled by Hon'ble Supreme Court in the case of Mavilayi Service Co-operative Bank Ltd. Vs.CIT (2021) 123 taxmann.com 161 (SC). He submitted that the Hon'ble Supreme Court has held that the expression "Members" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order passed by Ld. CIT(A) on this issue in both the years under consideration and restore them to the file of the A.O. in both the years for examining it afresh as discussed above." 5. Since the facts are identical, following the decision rendered by the co-ordinate bench, we restore this issue to the file of the AO with similar directions." 6. The learned DR relied on the order of the CIT(A). We have considered the rival submissions. 7. As the issues involved in the present appeal are identical to the issues decided by the Tribunal cited by the learned Counsel for the assessee, we restore the issue to the AO to examine the claim of the assessee afresh as directed by the Tribunal in the aforesaid order. We also notice that the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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