TMI Blog2022 (6) TMI 1152X X X X Extracts X X X X X X X X Extracts X X X X ..... ITAT held that assessee-co-operative society could not claim benefit of section 80P(2)(d) in respect of interest earned by it from deposits made with nationalised/private banks, however, said benefit was available in respect of interest earned on deposits made with co-operative bank. In the case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Cooperative Sale Society ( 2017 (1) TMI 1100 - KARNATAKA HIGH COURT ), the Karnataka High Court has 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 and other cases cited above, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upheld the disallowance of deduction u/s 80P of interest income of Rs. 3,81,570/-. It is, therefore, prayed that the disallowance of deduction u/s 80P of Interest income of Rs. 3,81,570/- upheld by the CIT(A) may kindly be deleted. 3. The brief facts of the case are that the assessee is a primary cooperative credit Society registered under the Gujarat Co-Operative Society Act whose main purpose is to provide credit facility and saving deposit schemes to members of the society by accepting deposits, savings etc. from members and providing loan advance to its members. During the year under consideration, the assessing officer held that interest income of ₹ 3,81,570/- earned by the assessee out of deposits kept with cooperative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant wants to avail of the benefit of deduction of such interest income, it is always open for it to deposit the surplus funds with a cooperative bank and avail of deduction under section 80P(2)(d) of the Act. is only as obiter by the Court and not the ratio decidendi as this was not a question of law before the Hon'ble High Court and hence it does not lead to any binding precedent , in contrast the Karnataka HC (Dharwad Bench) decision is directly on the specific question on availability of deduction u/s 80P(2)(d) of interest earned on funds in Cooperative Banks which is in favour of Revenue and the ratio is based on the interpretation of the binding precedent laid down by the Hon'ble Supreme Court in the decision of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner which sub-serves the ends of justice-that being the life purpose for the existence of the institution of Courts. It was further observed that a liberal approach is requires to be adopted on principle as ordinarily a litigant does not stand to benefit by lodging an appeal late. Further refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this when delay is condoned the highest that can happen is that a cause would be decided on merits after hearing the parties. The Apex Court further held that when substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80P(2)(d) of the Act. In our considered view, Ld. CIT(A) has erred in law in holding that the observations of the Hon ble Gujarat High Court in the case of State Bank of India Vs. CIT (2016) 389 ITR 578 (Guj), to the effect 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 haveno binding effect on the jurisdictional Revenue Authorities. The Honourable Gujarat High Court made following observations in respect of interest earned from deposits kept with a cooperative bank: Therefore, it is only the interest derived from the credit provided to its members which is deductible under section 80P(2)(a)(i) of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 389 ITR 578 (Guj) has no binding effect on the jurisdictional Revenue authorities. 5.3 It may further be noted that in the case of Surat VankarSahakari Sangh Ltd. v Assistant Commissioner of Income-tax [2016] 72 taxmann.com 169 (Gujarat) , the Gujarat High Court held assessee-cooperative society was eligible for deduction under section 80P(2)(d) in respect of gross interest received from co-operative bank without adjusting interest paid to said bank. 5.4 In the case of Surendranagar District Co-op. Milk Producers Union Ltd. v Deputy Ld. CIT(A) 111 taxmann.com 69 (Rajkot Bench) the ITAT held that assessee-co-operative society could not claim benefit of section 80P(2)(d) in respect of interest earned by it from deposits made with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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