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TMI Blog2022 (9) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT's revision directions under challenge read as under: "6. I have examined the submission made by the assessee and issues involved. I have also gone through various, case laws filed and relied upon by the assessee in support of claim u/s 80P(2)(a)(i) or 80P(2)(d) of the Act. It is the submission of the assessee that, "The Assessing Officer while passing the Assessment Order took a view in accordance with the judicial decisions of the Jurisdictional ITAT Pune. Consequently, when the assessment was taken up for sole reason of verifying the deduction u/s 80P(2)(a)(i) of Income Tax Act 1961 and the Assessing Officer has duly raised queries in that respect and after considering the submission of the assessee taken a plausible view the Assessment Order cannot be held to be erroneous in so far as prejudicial; to the interest of revenue. The Assessing Officer cannot be faulted or the Assessment Order cannot be considered erroneous in so far as prejudicial to the interest of revenue when the Assessing Officer has passed an Assessment Order in accordance with the binding decision of Jurisdictional ITAT Pune." The contention raised by the assessee are examined with reference to assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act and such interest should be brought to tax." a. In this regard, the Assessment record has been verified in detail. The submissions made before the Assessing Officer regarding the deposits made with different bank/institution are seen to have been given without details as to when they were made and whether they were made out of the Deposits of the members or otherwise from out of the surplus generated. b. Also, the assessee has claimed that it accept deposits from its members only. However, no requisite details were furnished by the assessee either before, the Assessing Officer or during the present proceedings. The Assessing Officer also has not verified this aspect. 8. It is seen from the Profit and Loss account that the assessee has received interest income of Rs.14,04,405/- on fixed deposits investments with various co-operative banks. It is not clear whether these co-operative banks are registered with the RBI or not. If it is registered with the RBI then the interest received from the bank is not entitled for deduction u/s 80P(2)(d). The Assessing Officer has not caused any verification of this issue. 9. Since the assessee's large claim of deduction under chapt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts, the Assessment Order dt 09.12.2019 is hereby set aside to the Assessing Officer for proper verification of facts and to re-examine the assessee's claim of deduction under section 80P of the Income-tax Act, 1961. However, before arriving at any conclusion, the Assessing Officer shall give reasonable opportunity to the assessee to adduce the evidence and information with regard to: a. the Source of deposits made with all institutions from which interest income is earned with specific details and nexus as to whether those deposits are made from the deposits received from the members which are returnable to the members or from out of the surplus funds arising from profits and gains. b. Whether the deposits are made with institutions which are registered with RBI for carrying out business of Banking. c. Whether the Principle of Mutuality is satisfied to allow deduction u/s 80P in respect of income earned from deposits made with Co-op Banks. d. Based on the evidence, decide the allowability of deduction u/s 80P. The Assessing Officer shall, accordingly, re-frame the assessment in the assessee's case in due compliance with the above directions." 4. Mr. Gupta furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee in the following cases: (i) M/s Solitaire CHS Ltd. vs. Pr. CIT, ITA No. 3155/Mum/2019; dated 29.11.2019 ( ITAT "G" Bench, Mumbai); (ii) Majalgaon Sahakari 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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