TMI Blog2022 (12) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... gible for deduction u/s 80P(2)(d) - we direct the Assessing Officer to allow the same. Hence, the ground of appeal no.1 stands allowed. Additions made u/s 40(a)(ia) and section 36(1) of the Act - HELD THAT:- As the inflated profits on account of such disallowances, would also qualify for deduction u/s 80P(2)(a)(i) of the Act. Hence, 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. - ITA No.242/PAN/2019 - - - Dated:- 30-11-2022 - Shri Inturi Rama Rao, Accountant Member For the Assessee : Shri Madhu Gawde For the Revenue : Shri N. Shrikanth ORDER ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he LIC u/s. 36(i)(v) is clearly a allowable deduction. It is therefore prayed that the additions made by the Assessing officer be deleted. 5) The Appellant prays for leave to Add, modify, alter or delete any of the grounds of appeal at the time of hearing. 3. Briefly, the facts of the case are as under : The appellant is a cooperative society formed under the Goa Co-operative Societies Act for the purpose of accepting deposits from its members and providing credit facilities to its members. The Return of Income for the assessment year 2015-16 was filed on 22.11.2015 declaring Rs.Nil income after claiming exemption u/s 80P of the Income Tax Act, 1961 ( the Act ) of Rs.23,85,954/-. Against the said return of income, the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld. CIT(A) directed the Assessing Officer to allow the claim on proper verification. 5. Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal. 6. 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. 7. The Assessing Officer was of the opinion that the interest income so received is not eligible for exemption u/s 80P(2)(d), as the said income was received from non-members of the society. This reasoning of the Assessing Officer as well as the ld. CIT(A) was overruled by the Co-ordinate Bench of this Tribunal in the case of The Ugar Sugar Works Kamgar D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme 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, 55 taxmann.com 447 and the Hon ble Delhi High Court in the case of Mantola Cooperative Thrift Credit Societ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 activity of marketing agricultural produce by its members; accepting deposits from its members and providing cre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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