TMI Blog2022 (6) TMI 1155X X X X Extracts X X X X X X X X Extracts X X X X ..... said deposits and business of assessee providing credit facilities to its members, it could not claim deduction under section 80P(2) of the Act in respect of interest income in question. In the case of Baroda Citizen Community Co-op. Credit Society Ltd. [ 2022 (1) TMI 987 - ITAT AHMEDABAD] held that in case of a society engaged in providing credit facilities to its members, income from investments made in banks is not deductible under section 80P of the Act. Respectfully following the decisions cited above, we do not find any infirmity in the decision of Ld. CIT(A). Therefore, the appeal of the assessee is dismissed on this issue in respect of Ground Number 1. Disallowance of deduction under section 80P of the Act in respect of rental income and other miscellaneous income - HELD THAT:- Bihar High Court in the case of Bihar Rajya Sahkari Bhoomi Vikas Co-operative Bank Ltd. [ 2008 (9) TMI 310 - PATNA HIGH COURT] held that income earned by assessee, a co-operative bank, by way of interest on provident fund amount of employees and rent from house property could not be treated as income attributable to banking business and would not qualify for deduction under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and allied activities and rural development. During the year, the assessing officer noted that the assessee has earned interest income of ₹ 11,28,91,418/- from nationalised banks i.e. other than cooperative banks and claimed deduction under section 80P(2)(d) of the Act. The AO held that as per provisions of section 80P(2)(d) of the Act, the assessee is only eligible for deduction in respect of interest earned from cooperative banks and therefore is not eligible for deduction under this section in respect of interest earned from nationalised banks. Accordingly, the Ld. Assessing Officer disallowed the amount of ₹ 11,28,91,418/-and added the same to the total income of the assessee being the amount claimed but not eligible for deduction under section 80P(2)(d) of the Act. Further, the Ld. Assessing Officer noted that the assessee had earned rental income and miscellaneous income which was not eligible for deduction under section 80P of the Act. The assessee submitted that the miscellaneous income and rental income is incidental to the assessee s activities and therefore should be allowed as a deduction. However, the Ld. Assessing Officer held that as per Form 3CD report, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent to ATM or other bank for ease of operation to members and even for us also. This income is only incidental and part of our business of financing and in view of above deduction u/s.80P may be fully allowed. 3.4.2. Facts of the case and the submissions are considered. The appellant's main activity is providing credit facility to members for agriculture and allied activities and rural development. The appellant has earned rental income by providing different places on rent to ATM and other banks providing place on rent and this cannot be incidental to the activity of the appellant's society as the activities of the appellant society is providing credit facilities to members. The appellant has also earning other income which was credited to miscellaneous income which is mainly on account of bank charges etc. recovered from members. The appellant has failed to establish that how this income is incidental to the activities of the appellant. Therefore, the AO has rightly disallowed the same and added to the total income of the appellant. 4. Accordingly, the appeal stands dismissed. 5. Before us, none appeared on behalf of the assessee. The Ld. DR relied upon t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents made by it with any co- operative society, a cooperative society is entitled to deduction of the whole of such income under section 80P(2)(d) of the Act. However, interest earned from investments made in any bank, not being a co-operative society, is not deductible under section 80P(2)(d) of the Act. 5.1 In the case of Baroda Citizen Community Co-op. Credit Society Ltd. v. ITO [2022] 134 taxmann.com 290 (Ahmedabad - Trib.) , the Ahmedabad ITAT held that in case of a society engaged in providing credit facilities to its members, income from investments made in banks is not deductible under section 80P of the Act. 5.2 Respectfully following the decisions cited above, we do not find any infirmity in the decision of Ld. CIT(A). Therefore, the appeal of the assessee is dismissed on this issue in respect of Ground Number 1. 6. With respect to Ground Number 2 with respect to disallowance of deduction under section 80P of the Act in respect of rental income and other miscellaneous income amounting to ₹ 32,61,007/-, we are of the considered view that there is no infirmity in the order of the Ld. CIT(Appeals) who held that the assessee has not been able to establi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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