TMI Blog2022 (11) TMI 1172X X X X Extracts X X X X X X X X Extracts X X X X ..... me is eligible for deduction u/s 80P(2)(d) - we direct AO to allow the same. Hence, the ground of appeal no.1 stands allowed. Additions u/s 40(a)(ia) and section 36(1) - HELD THAT:- As inflated profits on account of such disallowances, would also qualify for deduction u/s 80P(2)(a)(i) - Hence, direct the AO to allow the above disallowances which form part of the business income of the appellant society for exemption u/s 80P. Accordingly, ground of appeal nos.2 and 3 stands allowed. - ITA Nos.240 And 241/PAN/2019 - - - Dated:- 24-11-2022 - Shri Inturi Rama Rao, Accountant Member For the Assessee : Shri Madhu Gawde For the Revenue : Shri N. Shrikanth ORDER PER INTURI RAMA RAO, AM: These are the appeals filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a time of giving relief in the appeal order. 4) Appellant carves leave to Add, amend and/ alter and other ground at the time of hearing. 5. Briefly, the facts of the case are as under : The appellant is a cooperative society formed under the Goa Cooperative Societies Act with the object of carrying on business of providing credit facilities to its members. The Return of Income for the assessment year 2013-14 was filed on 23.08.2013 declaring Rs.Nil income after claiming exemption u/s 80P of the Income Tax Act, 1961 ( the Act ) of Rs.14,82,997/-. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-2(3), Panaji ( the Assessing Officer ) vide order dated 27.11.2015 passed u/s 143(3) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. Ground of appeal no.1 challenges the correctness of the decision of the ld. CIT(A) denying the benefit of exemption of interest income received from other cooperative society u/s 80P(2)(d) of the Act. 9. During the previous year relevant to the assessment year under consideration, the appellant had received a sum of Rs.2,95,114/- best interest on investments, Rs.31,607/- interest on savings received from Goa State Cooperative Bank Ltd. and claimed exemption u/s 80P(2)(d) of the Act. The Assessing Officer was of the opinion that the interest income so received is not eligible for exemption u/s 80P(2)(a)(i), as the said income was received from non-members of the society. This reasoning of the Assessing Officer as well as the ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Totgars Co-operative Sales Society Ltd. (supra) held that the ratio of decision of the Hon ble Supreme Court in the aforesaid case (supra) not to be applicable in respect of interest income on investment as same falls under the provisions of section 80P(2)(d) and not u/s 80P(2)(a)(i) of the Act. 9. Even the decision of Pune Bench of the Tribunal in the case of Sant Motiram Maharaj Sahakari Pat Sanstha Ltd. vs. ITO, 120 taxmann.com 10 wherein the Tribunal after making reference to the decisions of the Hon ble Supreme Court in the case of Totgars Co-operative Sales Society Ltd. (supra) and having noticed the divergent views of the Hon ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Co-op. Ltd. vs. ITO, 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . There being no direct judgment from the Hon'ble jurisdictional High Court on the point, the Tribunal in Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit (supra) preferred to go with the view in favour of the assessee by the Hon'ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. (supra). 10. Insofar as the reliance of the ld. DR on the case of Pr. CIT and Another Vs. Totagars Cooperative Sales Society (2017) 395 ITR 611 (Kar.) is concerned, we find that the issue in that case was the eligibility of deduction u/s.80P(2)(d) of the Act on interest earned by the assessee co-operative society on investments made in co-operative banks. In that case, the assessee was engaged in the activi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 40(a)(ia) and section 36(1) of the Act. 12. Without going into the merits of the disallowances, suffice to say that the inflated profits on account of such disallowances, would also qualify for deduction u/s 80P(2)(a)(i) of the Act. Hence, I direct the Assessing Officer to allow the above disallowances which form part of the business income of the appellant society for exemption u/s 80P of the Act. Accordingly, ground of appeal nos.2 and 3 stands allowed. 13. In the result, the appeal filed by the assessee in ITA No.240/PAN/2019 for A.Y. 2013-14 stands allowed. ITA No.241/PAN/2019, A.Y. 2014-15 : 14. Since the facts and issues involved in the above appeal in ITA No.241/PAN/2019 for A.Y. 2014-15 are identical, therefore, ou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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