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TMI Blog2022 (12) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... relating to each Ground of appeal 1 On the facts and in the circumstances of the case, the order passed by the learned Ld.CIT(A) u/s. 250 of the I.T. Act is ab initio void being bad in law. 2 On the facts and in the circumstances of the case, the learned CIT(A) erred in confirming disallwance of deduction u/s 80P(2)(d) of the I T Act, 1961 for Dividend Income earned from another Co-Op Society. Rs. 17,64, 000/- 3 On the facts and in the circumstances of the case, the learned CIT(A) erred in confirming disallwance of deduction u/s 80P(2)(d) of the I T Act, 1961 for Interest Income earned from another Co-Op Society. Rs. 42,22,641/- 4 Your Honour's Assessee pray to produce any other materials on fact in support of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, Ld. CIT(Appeals) dismissed the assessee's appeal with the following observations: "6. Decision Brief facts of the case are that the assessee is a registered Cooperative society engaged in activity of providing pesticides to its members, The assessee has earned interest and dividend income from its investments in the Rajkot District Co-operative Bank Limited out of the surplus. The A.O has held that this income is neither exempt u/s 80P(2)(a)(i) nor u/s 80P(2)(d). The assessing officer has brought out that "as per decision of HonWe Karnataka High Court in the case of Principal CIT, Hubli V/s Tatagars Co-Operative Sale Society 83 tamann.com 140 (dated 16.062017) whrerein it was held that interest earned by assessee, a cooperative soci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) relied upon by assessee has observed that the Gujarat High Court in the State Bank of India vs CIT (2016) 72 taxmann.com 64 (Gujarat) (Supra) and Sabarkantha Districe Cooperative Milk Producers Union Ltd, in tax Appeal No, 473 of 2014 (Supra) have observed, as obiter dicta, that interest earned on fixed deposits held with Co-operative bank can be said to qualify for deduction u/s SOP of the Act. The ITAT has categorically mentioned that such observations appear to be in the nature of and obiter on the context of those cases. As regards the decision of Hon'ble Karnataka High Court in the case of Totagar's Co-operative Sale Society Ltd. vs. ITO [2010] 322 ITR 283/188 Taxman 282 (SC) (Supra), the ITAT has stated that the Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Government Servants Co-Op, vs ITO ITA No.l08/Ahd/2017 dated 31/01/2019 (Supra) the Hon'ble ITAT has relied upon decision of Karnataka High Court (83 taxmann.com 140) and held that the asssessee was not eligible for deduction u/s 80P(2)(d) even if the surplus was invested with the Co-operative bank. In the case of Uttar Gujarat Uma Cooperative Society Ltd, vs ITO ITA No, 1670 & 1671/Ahd/2018 dated 28/02/2019 Hon'ble ITAT, observing that the decision rendered by Hon'ble Karnataka High Court appears to be sub-silentio and that the obiter dicta in cases of State Bank of India and Sabarkantha District Co-operative Milk Producers Union Ltd. in tax Appeal No. 473 of 2014 support their view, the ITAT Ahmedabad has held that the interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 (Guj), to the effect 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 have no binding effect on the jurisdictional Revenue Authorities. The Honourable Gujarat High Court made following observations 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... axmann.com 169 (Gujarat), the Gujarat High Court held assessee-cooperative society was eligible for deduction under section 80P(2)(d) in respect of gross interest received from co-operative bank without adjusting interest paid to said bank. 4.4 In the case of Surendranagar District Co-op. Milk Producers Union Ltd. v Deputy Ld. CIT(A) 111 taxmann.com 69 (Rajkot Bench) the ITAT held that assessee-co-operative society could not claim benefit of section 80P(2)(d) in respect of interest earned by it from deposits made with nationalised/private banks, however, said benefit was available in respect of interest earned on deposits made with co-operative bank. 4.5 In the case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Cooperative Sale ..... X X X X Extracts X X X X X X X X Extracts X X X X
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