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TMI Blog2021 (8) TMI 1086X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act']. 2. The brief facts of the case as emanating from records are: The assessee is a Co-operative Housing Society. During the period relevant to AY under appeal, the assessee earned interest income of Rs. 10,77,000/- from deposits (Fixed Deposits & Saving Banks deposits) with Co-operative Bank. The assessee claimed deduction of interest income from Co-operative Bank under section 80P(2)(d) of the Act. The AO disallowed assessee's claim of deduction and made addition of the entire interest income on the premises that by virtue of insertion of section 80P(4) by the Finance Act, 2006 w.e.f. 01.04.2007, the assessee is not eligible for the benefit under section 80P of the Act. Against the assessment order, the assessee filed appeal before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Kaliandas Udyog Bhavan Premises Co-op Society Ltd. Vs. ITO, 94 taxmann.com 15 (Mumbai) after considering various decisions by Hon'ble High Courts and the Tribunal and the provisions of the Act, has held that interest income derived by a co-operative society from investments with co-operative bank, would be entitled for deduction under section 80P(2)(d) of the Act. The relevant extract of the order reads as under: - "7. We have deliberated at length on the issue under consideration and are unable to persuade ourselves to be in agreement with the view taken by the lower authorities. Before proceeding further, we may herein reproduce the relevant extract of the said statutory provision, viz. Sec. 80P(2)(d), as the same would have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural credit society or a primary cooperative agricultural and rural development bank, but however, are unable to subscribe to their view that the same shall also jeopardise the claim of deduction of a co-operative society under Sec. 80P(2)(d) in respect of the interest income on their investments parked with a cooperative bank. We have given a thoughtful consideration to the issue before us and are of the considered view that as long as it is proved that the interest income is being derived by a co-operative society from its investments made with any other cooperative society, the claim of deduction under the aforesaid statutory provision, viz. Sec. 80P(2)(d) would be duly available. We may herein observe that the term 'cooperative soci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dend 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 cooperative 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 sums referred to in sub-section (1) shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee on such facts." [Emphasised by us.] 7. The Hon'ble Karnataka High court in the case of PCIT vs. Totagars, Cooperative Sale Society 392 ITR 74 has held that for the purpose of section 80P(2)(d) of the Act, co-operative bank should be considered as cooperative society. Similar view has been taken by the Hon'ble Gujarat High court in the case of Surat Vankar Sahakari Sangh Ltd. vs. ACIT, 421 ITR 134. 8. However, on the same issue Hon'ble Karnataka High court in the case of PCIT vs. Totagars, Co-operative Sale Society 395 ITR 611 (Karnataka) has taken a contrary view holding that interest income earned from deposit with the cooperative bank does not qualify for deduction under section 80P(2)(d) of the Act. It wo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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