TMI Blog2022 (5) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... rounds of appeal are not relevant to the facts of the case. In the instant facts, however, we note that there is no clarity as to how much interest has been earned by the assessee from deposits made in nationalised bank and how much interest has been earned from deposits made in cooperative bank. Having held that interest earned by the assessee on deposits held with nationalised banks are not eligible for deduction under section 80P of the Act, though only the net income would be taxable after allowing for administrative and other expenses incurred for earning such interest income and also that interest earned by the assessee on deposits made with cooperative banks are eligible for deduction under section 80 P(2)(d) of the Act, we are restoring the file to Learned Assessing Officer to ascertain how much interest pertains to interest earned from nationalised bank and the portion of interest relatable to cooperative bank, and then tax the same in accordance with decision above. - ITA No. 243/Ahd/2021 - - - Dated:- 6-5-2022 - Shri Waseem Ahmed, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Assessee : None For the Revenue : Shri V.K. Singh, Sr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total income of the assessee. 4. The assessee filed appeal before Ld. CIT(A) who dismissed the assessee s appeal. While passing the order, Ld. CIT(A) made the following observations: 4.3 I have carefully gone through the assessment order as well as material on record. The provisions of section 80P(2)(d) regarding deduction in respect to interest earned by co-operative society reads as underpin respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other co-operative society, the whole of such income . From a plain reading of the above section, it is clear that the section refers to interest and dividends from its investments in another co-operative society only. Thus, this deduction cannot be extended to the interest income earned from the investment in any bank whether it is co-operative or scheduled bank. 4.4 The Hon'ble Supreme Court in the case of Totgars Co-op Sale Society Ltd. V/s ITO [322 ITR 283 (2010)] has held that the assessee being a cooperative society engaged in providing credit facilities to its members or marketing agricultural product of its members, interest earned by it by investin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of Subsection (2) of Section SOP of the Act should be its business or operational income. . 4.7 Furthermore, in the absence of any details submitted by the appellant, it is held that the ratio of judgments given by the Hon'ble SC in the Totgars Co-op sale Society Ltd. case (cited Supra) will be applicable to the appellant's case and since the decision of SC is against the appellant, the decision of Honourable Courts and Tribunals cited by the appellant in its favour does not help its case. After considering the facts of the case and the position of law I have come to a conclusion that the AO has rightly made this addition. The grounds of appeal nos. 1 and 1.1 are accordingly dismissed. 5 In the result, the appeal is dismissed. 5. Before us, none appeared on behalf of the assessee. The Ld. Departmental Representative submitted that the issue is covered in favour of the revenue by the Gujarat High Court decision in the case of SBI Employees Cooperative Credit and Supply Society v CIT 389 ITR 578 (Gujarat) . He relied upon the observations made by Ld. CIT(A) in the order. 6. We have heard the Ld. Departmental Representative and perused the mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osits kept with Co-Operative bank is concerned, the Hon ble High Court 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) , have held that the interest income earned by a co-operative society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act. Respectfully, following the decision of Honourable High Court of Gujarat in the case of State Bank of India versus CIT supra, interest earned by the assessee on surplus held with cooperative bank would be eligible for deduction under Sec.80P(2)(d) of the Act. 6.2 We would also like to briefly touch upon the cases cited by the assessee in the grounds of appeal. In the case of Ekta Co-op Credit Society Ltd supra cited by the assessee in the grounds of appeal, the issue for consideration was whether since assessee was not a bank, whether it would be entitled to deduction under section 80P(2)(a)(i) on its income from providing credit facilities to its members. The High Court held that section 80P(4) w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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