TMI Blog2022 (10) TMI 834X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessee : Shri B.V. Jhaveri For the Revenue : Ms. Agnes Thomas ORDER PER SANDEEP SINGH KARHAIL, J.M. The present appeals have been filed by the assessee challenging the impugned order dated 06/04/2022, passed for the assessment year 2014 15, separate orders of even date 04/05/2022, passed for the assessment years 2016 17 and 2017 18, and order dated 28/04/2022, passed for the assessment year 2018 19, under section 250 of the Income Tax Act, 1961 ( the Act ) by learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [ learned CIT(A) ]. 2. Since all these appeals pertain to the same assessee and issue involved is also common, therefore these appeals were heard together as a matter of convenience and are being adjudicated by way of this consolidated order. With the consent of the parties, the appeal by the assessee for the assessment year 2014 15 is taken up as a lead case and the decision rendered therein would apply mutatis mutandis to the appeals for the assessment year 2016 17, 2017 18 and 2018 19 as well, except with variance in figures. ITA no.1057/Mum./2022 Assessee s Appeal A.Y. 2014 15 3. In this a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either the members of the assessee nor are co-operative societies. Accordingly, the AO disallowed the deduction of Rs. 1,01,80,360 claimed by the assessee under section 80P(2)(d) of the Act. 6. The learned CIT(A) vide impugned order dated 06/04/2022 dismissed the appeal filed by the assessee and held that neither during the course of assessment proceedings nor during the course of appeal, the assessee has submitted any evidence to prove that the co-operative bank from whom assessee has earned interest income are co-operative society. The learned CIT(A) also placed reliance upon the decision of Hon‟ble Supreme Court in Totgar‟s Co-operative Sale Society Ltd vs ITO., [2010] 322 ITR 283 (SC). The relevant findings of learned CIT(A) in this regard are as under: 7. I have considered the facts and circumstances of the case. submissions of the appellant, material available on record and various case laws referred on the above matter. It is seen that the Assessing Officer has disallowed deduction u/s 80P on interest income earned from Co-operative Bank. Assessing Officer has disallowed the deduction u/s 80P on interest income of Rs. 1,01,80,360/- because it was not earn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gains of business emphasise that the income in respect of which deduction is sought must constitute the operational income and not the other income which accrues to the Society. In this particular case, the evidence shows that the assessee-Society earns interest on funds which are not required for business purposes at the given point of time. Therefore, on the facts and circumstances of this case, in our view, such interest income falls in the category of Other Income which has been rightly taxed by the Department under section 56 of the Act. 7.3 In view of the above, Interest Income earned from Co-operative Bank is treated as Income from Other Sources and first ground of appeal of the appellant is hereby dismissed. Being aggrieved, the assessee is in appeal before us. 7. During the course of hearing, learned Authorised Representative ( learned AR‟) submitted that the co-operative banks from which interest income was earned by the assessee are registered as co-operative society. The learned AR further submitted that under section 80P(2)(a)(i) emphasis is on carrying on of the business and therefore Hon‟ble Supreme Court in Totgar‟s Co-operative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee, same shall be allowed as deduction. During this year, assessee has claimed deduction under section 80P of the Act in respect of the interest income earned from the following co-operative banks: (a) Sharmrao Vithal Co-operative Bank Ltd; (b) Abhyudaya Co-operative Bank Ltd; and (c) Saraswat Co-operative Bank Ltd. 12. The only basis on which Revenue denied the deduction under section 80P(2)(d) of the Act to the assessee is that the interest income was earned from co-operative bank, which are not co-operative society. In this regard, assessee placed reliance upon the list of banks registered under Multi-State Co-perative Societies Act, 2002. From the perusal of the aforesaid list, forming part of the case law paper book at page 102 103, we find that names of the aforesaid co-operative banks, from which assessee has earned interest income, are mentioned at serial No. 17, 40 and 52. Thus, from the above it is evident that the co-operative banks in which assessee had invested are registered as co-operative societies and therefore we are of the considered view that these banks are co-operative society as per the provisions of section 2(19) of the Act. 13. Furthe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est income should have been derived from the investments made by the assessee co-operative society with any other cooperative society. We though are in agreement with the observations of the lower authorities that with the insertion of Sub-section (4) of Sec. 80P, vide the Finance Act, 2006, with effect from 01.04.2007, the provisions of Sec. 80P would no more be applicable in relation to any co-operative bank, other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank, but however, are unable to subscribe to their view that the same shall also jeopardise the claim of deduction of a co-operative society under Sec. 80P(2)(d) in respect of the interest income on their investments parked with a co-operative bank. We have given a thoughtful consideration to the issue before us and are of the considered view that as long as it is proved that the interest income is being derived by a co-operative society from its investments made with any other co-operative society, the claim of deduction under the aforesaid statutory provision, viz. Sec. 80P(2)(d) would be duly available. We may herein observe that the term 'co-operative societ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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