TMI Blog2018 (12) TMI 1912X X X X Extracts X X X X X X X X Extracts X X X X ..... ion u/s.80P(2)(d) of the Act. It is evident that there is no direct nexus between such expenses and interest and dividend. The prorate allocation of interest expenditure resulting its part disallowance of deduction has been done without examined the issue in details. Therefore, in absence of any expenses directly or indirectly co-related to such income, the part disallowance of deduction is not satisfied. In view of this matter, we do not find any fault in the order of CIT(A), hence, same is upheld. Claim of deduction u/s. 80P(2)(d) of the Act on the interest income earned from Co-operative banks - The assessee is a Credit Co-operative Society and received advances and loans from its members, on which interest was being received and paid. We find that the Surat Bench of the Tribunal (camp at Surat), on the similar issue, in assessee's own case [ 2017 (4) TMI 1545 - ITAT SURAT ] for the A. Y. 2009-10 held the issue in favour of the assessee . We find that there is no direct nexus between expenditure related to part disallowance, hence, findings of CIT(A) are upheld. It is further apparent that the assessee is entitled to deduction u/s.80P(2)(d) in respect of the int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and assessee Co-operative society is separately required to be taxed on this amount. 4. On the facts and in the circumstances of the case and in Law, the Ld. CIT(A), Surat ought to have upheld the order of the Assessing Officer. It is, therefore, prayed that the order of the Ld. CIT(A)- Surat may be set-aside and that of the Assessing Officer's order may be restored. 3. Succinct facts of the case that the assessee is a Co-operative credit society engaged in the business of providing credit facilities exclusively to its members. In the Return declared income as NIL for A.Y. 2012-13 was filed on 09.09.2012. The case was selected for scrutiny and the assessment u/s. 143(3) of the Act was completed on 04.03.2015 determining the total income at ₹ 71,07,150/- after making addition on account of wrong claim of deduction u/s.80P(2) of the Act on the interest income received from nationalized banks. During the assessment proceedings the ld. AO observed that the assessee society has received interest income of ₹ 7,46,09,167/- during the year out of which ₹ 71,07,151/- being interest income from Nationalized Bank, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant along with 'material brought on record has been duly considered inter alia the findings of the assessment order passed by the AO. This is an admitted fact that during the year under consideration, the assessee has shown earned ₹ 2,60,99,821/- as income from business of providing credit facilities and this amount includes ₹ 71,07,151/- representing interest income earned from deposits held with nationalized banks. Even if, the said income is treated as income from other sources as done by the AO instead of income from business/profession as treated by the appellant, the figure of Gross Total Income will remain unchanged i.e.₹ 2,60,99,821/-. As, the assessee has shown Gross Total income to the tune of ₹ 2,60,99,821/- and against this, the assessee has claimed deduction u/s. 80P(2)(d) of ₹ 4,96,37,547/- representing interest/dividend earned from co-operative societies and ₹ 50,000/- as basic deduction u/s. 80P(2)(c) of the Act. Since, the claim of deduction u/s. 80P(2)(d) of the Act itself is ₹ 4,96,37,547/- which is much higher than the Gross Total Income of ₹ 2.60,99,821/-, the claim of deduction u/s.80P(2)(d) 80P(2)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed and dividend/interest income earned from investment with other co-operative societies in wholly arbitrary imaginary, hence, not sustainable in law. It is seen that the assessee has been statutorily investing its surplus fund from the year 1992 with other co-operative societies including co-operative banks. On such investment, the assessee is receiving interest and dividend which has been claimed as deduction u/s.80P(2)(d) of the Act. It is evident that there is no direct nexus between such expenses and interest and dividend. The prorate allocation of interest expenditure resulting its part disallowance of deduction has been done without examined the issue in details. Therefore, in absence of any expenses directly or indirectly co-related to such income, the part disallowance of deduction is not satisfied. In view of this matter, we do not find any fault in the order of CIT(A), hence, same is upheld. 9. The issue raised in the present appeal is against the claim of deduction u/s. 80P(2)(d) of the Act on the interest income earned from Co-operative banks. It is undisputed fact that the assessee is a Credit Co-operative Society and received advances and loans from its members, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts investment in any other co-operative society. Therefore, we do not agree with the argument advanced by learned counsel for the Revenue. In our opinion, the learned Tribunal was right in law in allowing deduction under Section 80P(2)(d) of the Income-tax Act, 1961. In respect of interest of ₹ 4,00,919 on account of interest received from Nawanshaln Central Co-operative Bank without adjusting the interest paid to the bank. Therefore, the reference answered against the Revenue in the affirmative and in favour of the assessee. We have further noticed from the finding of the ld. CIT(A) that the assessee has claimed the gross amount of ₹ 4,05,40,653/- u/s. 80P(2)(d) which includes interest income of ₹ 3,24,40,278 and dividend income of ₹ 81,00,375/- received from other Co-operative societies. However, in the computation of income, assessee has restricted the deduction to ₹ 1,36,41,6391/- which was net income. Therefore, we considered that the Ld. CIT(A) is justified in his decision that the net income in the case of assessee of ₹ 1,36,41,639/-allowable as deduction u/s.80P(2)(d) of the Act. In view of the above stated facts and details findings ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
