TMI Blog2022 (9) TMI 720X X X X Extracts X X X X X X X X Extracts X X X X ..... res held by the assessee in RDC District Cooperative Bank, we observe that the Hon ble Gujarat High Court in the case of State Bank of India [ 2016 (7) TMI 516 - GUJARAT HIGH COURT] 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) . 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. We are of the considered view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re without prejudice to one another. 2. The order passed by Pr. Commissioner of Income-tax, Rajkot-1 [hereinafter referred as to the PCIT ] is bad in law, invalid and requires to be quashed, the same may kindly be quashed. 3. The Ld. PCIT erred in law and on facts in arriving at a conclusion that the assessment order passed by the AO was erroneous as well as prejudicial to the interest of the revenue as the same was passed without verifying allowability of deduction u/s. 80P(2)(d) of the Income-tax Act, 1961 [hereinafter referred as to the Act ] in respect of interest on FDRs held with other co-operative bank. The order passed by PCIT requires to be quashed and may kindly be quashed. 4. The learned Pr. CIT erred on facts as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of ₹ 2,66,250/- on investment from shares in Rajkot District Cooperative Bank Ltd. on which deduction has been claimed under section 80P of the Act. Further, the assessee submitted that the interest income has been received only from members and not from any cooperative bank and therefore there was no error in passing of the order by the AO u/s 143(3) of the Act. 5. The Principal CIT however held that whether the interest income has been received from co-operative bank or only from its members is a subject matter of verification. He further held that the assessee is also not eligible for deduction under section 80P(2)(d) of the Act on interest earned on money lent to its members, since deduction under section 80P(2)(d) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Please provide copy of Computation of Total Income and Tax Audit Report for A.Y. 2017-18. 4. From the perusal of the ROI it is gathered that the assessee has total loans advances of Rs. 8,76,24,597/- and long term investments of Rs. 17,75,000/- in unlisted equities. However against such huge loan advances and bank balances assessee has shown very less total income (Including Exempt Income ) in the ITR. In this regard you are hereby requested to give details of all the income arising from the investments, Loans Advances etc. along with an explanation for the lower ration of income to the investments loans Advances etc. along with an explanation for the lower ration of income to the investments, loans advances etc. in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bservations 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 and the interest derived by depositing surplus funds with the State Bank of India not being attributable to the business carried on by the appellant, cannot be deducted under section 80P(2)(a) (i) of the Act. If the appellant 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 co-operative bank and avail of deduction under section 80P(2)(d) of the Act. In the case of Surat Vankar Sahakari Sangh Ltd. v Assistant Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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