TMI Blog2022 (8) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... w, and allowed the assessee‟s claim for deduction under Sec. 80P(2)(d) on the interest income earned on its investments/deposits with co-operative banks, therefore, the Pr. CIT was in error in exercising his revisional jurisdiction u/s 263 of the Act for dislodging the same. Accordingly, finding no justification on the part of the Pr. CIT, who in exercise of his powers under Sec. 263 of the Act, had dislodged the view that was taken by the A.O as regards the eligibility of the assessee towards claim of deduction under Sec. 80P(2)(d), we set-aside his order and restore the order passed by the A.O under Sec. 143(3) - Decided in favour of assessee. - ITA No.591/PUN/2019 - - - Dated:- 29-7-2022 - Shri S.S. Godara, Judicial Member And Dr. Dipak P. Ripote, Accountant Member For the Assessee : None For the Revenue : Shri Saradar Singh Meena ORDER PER S.S. GODARA, JM : This assessee s appeal for AY 2014-15 arises against the Pr.CIT, Pune-5, Pune s order dated 30-01-2019 passed in case No. Pn/PrCIT-5/Admn,263/SPSSPM/2018-19/3803 in proceedings under Section 263 of the Income Tax Act, 1961, in short the Act . Case called twice. None appears at the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terest income not arising from its business operations, which made it ineligible. I find that the issues are squarely covered by the Hon'ble Supreme Court of India and Hon'ble Karnataka High Court in the case of The Totagars Co-Operative Sale Society. 06. In view of the foregoing discussion, it is clear that the assessee society was not entitled to claim deduction under chapter VIA of the Act and its claim was allowed by the Assessing Officer. In view of the forgoing wrong claim u/s 80P(2)(a)(i), the assessment completed under section 143(3) of the Income Tax Act, 1961, by the Income Tax Officer, Ward - 9(4), Pune, on 04.07.2016, for Assessment Year 2014-15, is erroneous in so far as it is prejudicial to the interest of the revenue. Therefore, the assessment made by the Assessing Officer is set aside with a direction to complete the assessment afresh after verifying the details and allowing correct amount of deduction admissible to the assessee society. 4. Mr. Meena further quoted PCIT vs. The Totagars Co-operative Sale Society (2017) 392 ITR 74 (Kar) that such an interest income deserves to be treated as income from other sources than under regular head of busi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee. (2). The sums referred to in sub-section (1) shall be the following, namely :- (a)............................................................................................ (b)............................................................................................ (c)............................................................................................ (d) in respect of any income by way of interest or dividends derived by the cooperative society from its investments with any other co-operative society, the whole of such income; On a perusal of Sec. 80P(2)(d), it can safely be gathered that interest income derived by an assessee co-operative society from its investments held with any other co-operative society shall be deducted in computing its total income. We may herein observe, that what is relevant for claim of deduction under Sec. 80P(2)(d) is that the interest income should have been derived from the investments made by the assessee co-operative society with any other co-operative society. We are in agreement wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hakari SAkhar Karkhana Ltd. Vs. ACIT, Circle-3, Aurangabad, ITA No, 308/Pun/2018 (ITAT Pune) (iii) Kaliandas Udyog Bhavan Pemises Co-op. Society Ltd. Vs. ITO, 21(2)(1), Mumbai We further 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), had held, that the interest income earned by the assessee on its investments with a co-operative bank would be eligible for claim of deduction under Sec. 80P(2)(d) of the Act. Still further, we find that the CBDT Circular No. 14, dated 28.12.2006 also makes it clear beyond any scope of doubt that the purpose behind enactment of sub-section (4) of Sec. 80P was that the co-operative banks which were functioning at par with other banks would no more be entitled for claim of deduction under Sec. 80P(4) of the Act. 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), as had been relied upon by the ld ..... X X X X Extracts X X X X X X X X Extracts X X X X
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