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TMI Blog2021 (9) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. 2. The learned CIT[A] is not justified in upholding the denial of deduction _aimed u/s.80P[2][a][i] of the Act amounting to Rs. 52,68,554/- in respect of the profits earned by the appellant from the business of providing credit facilities to its members under the facts and in the circumstances of the appellant's case. 3. The learned CIT[A] erred in holding that the business of providing credit facilities to the members carried on by the appellant cannot be regarded as a business carried on by a cooperative society complying with the principles of mutuality since the appellant had admitted nominal members, who could either vote nor we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erative Societies 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. 7. Without prejudice to the above, the learned CIT(A) ought to have appreciated that the cost of funds ought to have been allowed u/s. 57[iii] of the Act while assessing the interest income under the head "Other Sources" under the facts and in the circumstances of the appellant's case. 8. Without prejudice to the right to seek waiver w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have offered the above said interest income under the head income from other sources. Accordingly, taking support of the decision rendered by Hon'ble Karnataka High Court in the case of The Totagars Cooperative Society (ITA No.100066 of 2016 dated 16.6.2017). The A.O. held that he is bringing the interest income to tax u/s 56 of the Act under the head income from other sources. As stated earlier he did not allow deduction for interest income u/s 80P(2)(d) and 80P(2)(a)(i) of the Act. The Ld. CIT(A) confirmed the order passed by A.O. 4. The ground no.1 and 9 urged by the assessee are general in nature. Ground No.8 relating to charging of interest u/s 234B is consequential in nature. 5. Ground No.2 to 4 relate to deduction claimed u/s 80P(2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the coordinate bench in the case of Thannirupantha Primary Agricultural Credit Cooperative Society Ltd. Vs. ITO (supra) with the following observations: 9.1 As regards the claim of deduction u/s 80P(2)(d) of the I.T.Act, the Bangalore Bench of the Tribunal in the case of M/s.The Jayanagar Cooperative Society Ltd. (supra), on identical facts, had restored the issue to the files of the A.O. for de novo consideration. The narration of facts, contentions and the findings of the Tribunal in the case of M/s.The Jayanagar Co-operative Society Ltd. (supra) reads as follow:- "4. The issues that arise for consideration in this appeal by the assessee are as to whether the Revenue authorities were justified in holding that the assessee was not en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a subsequent decision of the Hon'ble Karnataka High Court in the case of PCIT Vs. Totgars Cooperative Sale Society Ltd., 395 ITR 611 (Karn.). We have carefully gone through the said judgment. The facts of the case before the Hon'ble Karnataka High Court was that the Hon'ble Court was considering a case relating to Assessment Years 2007-08 to 2011-12. In case decided by the Hon'ble Supreme Court in the case of the very same assessee, the Assessment Years involved was Assessment Years 1991-92 to 1999-2000. The nature of interest income for all the Assessment Years was identical. The bone of contention of the Assessee in AY 2007-08 to 2011-12 was that the deduction under Section 80P(2) of the Act is claimed by the respondent assessee under S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt in the decision cited by the learned DR. To this extent the decision of the Hon'ble Karnataka High Court in the case of Tumukur Merchants Souharda Co-operative Ltd. (supra) still holds good. Hence, on this aspect, the issue should be restored back to the AO for a fresh decision after examining the facts in the light of these judgment of the Hon'ble Apex Court rendered in the case of The Totgars Co-operative Sale Society Ltd. (supra) and of Hon'ble Karnataka high Court rendered in the case of Tumukur Merchants Souharda Co-operative Ltd. (supra)." 9.2 In the light of the above order of the Tribunal, we deem it appropriate on the facts of the instant case, to restore the issue of claim of deduction u/s 80P(2)(d) of the I.T.A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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