TMI Blog2022 (4) TMI 395X X X X Extracts X X X X X X X X Extracts X X X X ..... deduction u/s.80P(2)(d) Whether the lower authorities had erred in declining the assessee s claim for deduction u/s. 80P(2)(e) i.e., without properly verifying the lease deeds and wrongly construing the purpose for which the godowns and sheds had been let out? - On a perusal of the confirmations of the aforementioned parties that have been filed by the assessee before the lower authorities, we find that it has specifically been stated by the respective parties that the premises in question were being used by them as godowns for storing/stocking various materials. Backed by the aforesaid facts, we are of the considered view that the lower authorities had grossly erred in loosing sight of the aforesaid material documentary evidence while adjudicating the issue in hand. We, thus, in all fairness restore the issue to the file of the Assessing Officer with a direction to re-adjudicate the assessee s claim for deduction u/s.80P(2)(e) after taking due cognizance of the documentary evidence i.e. confirmations of the respective tenants - Ground raised by the assessee is allowed for statistical purposes in terms of our aforesaid observations. - ITA No. 102/PAN/2018 - - - Dated:- 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the revenue and directed him to give effect to his order, inter alia, on two issues, viz. (i). disallow the assessee s claim for deduction of ₹ 3,83,047/- raised u/s. 80P(2)(d) qua the interest income earned on its investments with the Co-operative banks; and (ii). re-adjudicate the assessee s claim for deduction u/s 80P(2)(e) of ₹ 7,60,350/- on rent that was claimed to have been derived from the activity of letting out of industrial sheds. 3. The Assessing Officer, thereafter, vide his order passed u/s.143(3) r.w.s 263 of the Act, dated 08.06.2015 assessed the income of the assessee at ₹ 12,85,920/- i.e, after inter alia making the following disallowances: Sr. No. Particulars Amount 1. Disallowance of assessee s claim for deduction of interest on investments with co-operative banks ₹ 3,83,047/- 2. Disallowance of assessee s claim for deduction u/s 80P(2)(e) ₹ 7,60,350/- 4. Aggrieved, the assessee carried the matter in appeal before the CIT (Appeals) but without any success in s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank Ltd. : ₹ 3,80,035/-; and (ii). Belgaum District Central Co-Op Bank Ltd. : ₹ 3,012/-, i.e co-operative Banks, would not be eligible for deduction u/s. 80P(2)(d) cannot be sustained. Our aforesaid view is fortified by the order of the ITAT, Mumbai in the case of M/s Solitaire CHS Ltd Vs. Principal Commissioner of Income Tax-26, ITA No.3155/Mum/2019, dated 29.11.2019 (wherein one of us, i.e, the JM was a party) had after exhaustive deliberations held as under: 6. We have heard the authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as the judicial pronouncements relied upon by them. Our indulgence in the present appeal has been sought, for adjudicating, as to whether the claim of the assessee for deduction under section 80P(2)(d) in respect of interest income earned from the investments/deposits made with the co-operative banks is in order, or not. In our considered view, the issue involved in the present appeal revolves around the adjudication of the scope and gamut of sub-section (4) of Sec. 80P as had been made available on the statute, vide the Finance Act 2006, with effect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come should have been derived from the investments made by the assessee co-operative society with any other co-operative society. We are in agreement with the view taken by the Pr. CIT, that with the insertion of sub-section (4) of Sec. 80P, vide the Finance Act, 2006, with effect from 01.04.2007, the provisions of Sec. 80P would no more be applicable in relation to any co-operative bank, other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. However, at the same time, we are unable to subscribe to his view that the aforesaid amendment would jeopardise the claim of deduction of a co-operative society under Sec. 80P(2)(d) in respect of its interest income on investments/deposits parked with a co-operative bank. In our considered view, 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 co-operative society, the claim of deduction under the aforesaid statutory provision, viz. Sec. 80P(2)(d) would be duly available. We find that the term cooperative society‟ had been defined under Sec. 2(19) of the Act, as under:- (19) Co-operative s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion under Sec. 80P(4) of the Act. Insofar the reliance placed by the Pr. CIT on the judgment of the Hon ble Supreme Court in the case of Totgars Co-operative Sale Society Ltd. vs. ITO (2010) 322 ITR 283 (SC) is concerned, we are of the considered view that the same being distinguishable on facts had wrongly been relied upon by him. The adjudication by the Hon‟ble Apex Court in the aforesaid case was in context of Sec. 80P(2)(a)(i), and not on the entitlement of a co-operative society towards deduction under Sec. 80P(2)(d) on the interest income on the investments/deposits parked with a co-operative bank. Although, in all fairness, we may herein observe that the Hon'ble High Court of Karnataka in the case of Pr. CIT Vs. Totagars co-operative Sale Society (2017) 395 ITR 611 (Karn), had concluded that a co-operative society would not be entitled to claim of deduction under Sec. 80P(2)(d). At the same time, we find, that the Hon'ble High Court of Karnataka in the case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Cooperative Sale Society (2017) 392 ITR 74 (Karn) and Hon ble High Court of Gujarat in the case of State Bank Of India Vs. CIT (2016) 389 ITR 578 (Guj) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities, thus, vacate the disallowance of the assessee s claim for deduction of ₹ 3,83,047/- u/s.80P(2)(d) of the Act. The Grounds of appeal No.(s) 1, 2 3 are allowed in terms of our aforesaid observations. 10. We shall now advert to the contention of the ld. AR that the lower authorities had erred in declining the assessee s claim for deduction u/s. 80P(2)(e) of the Act i.e., without properly verifying the lease deeds and wrongly construing the purpose for which the godowns and sheds had been let out. 11. On a perusal of the orders of the lower authorities, we find that the assessee had in its return of income claimed deduction of ₹ 7,60,350/- u/s 80P(2)(e) qua the rent that was received by it from letting out of industrial sheds. Observing, that the assessee society had after constructing industrial sheds let out the same to small industries which were running lathes, CNC Machines and other small workshops, the Assessing Officer while framing the original assessment had vide his order u/s.143(3), dated 29.11.2012 allowed its claim for deduction of the rental receipts in question u/s 80P(2)(e). However, the Pr. Commissioner of Income Tax was of the view t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he lower authorities had drawn adverse inferences qua the assessee s claim for deduction u/s. 80P(2)(e) of the Act by adopting a half-hearted approach i.e, without considering the documents which duly substantiated its claim for deduction. 14. We have given a thoughtful consideration to the aforesaid issue in hand and find substantial force in the claim of the Ld. AR. On a perusal of the confirmations of the aforementioned parties that have been filed by the assessee before the lower authorities, we find that it has specifically been stated by the respective parties that the premises in question were being used by them as godowns for storing/stocking various materials. Backed by the aforesaid facts, we are of the considered view that the lower authorities had grossly erred in loosing sight of the aforesaid material documentary evidence while adjudicating the issue in hand. We, thus, in all fairness restore the issue to the file of the Assessing Officer with a direction to re-adjudicate the assessee s claim for deduction u/s.80P(2)(e) after taking due cognizance of the documentary evidence i.e. confirmations of the respective tenants at Page 71 to 85 of the APB filed before us. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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