TMI Blog2022 (12) TMI 870X X X X Extracts X X X X X X X X Extracts X X X X ..... Sales Society Ltd. [ 2017 (7) TMI 1049 - KARNATAKA HIGH COURT ] and also the decision of State Bank of India [ 2016 (7) TMI 516 - GUJARAT HIGH COURT ] wherein it was observed that the interest income earned by a cooperative 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. The assessee s case is similar to the above mentioned decision of the co-ordinate bench which has distinguished the facts with the decision of Totagars Co-operative Sales Society (supra) case. For the foregoing reasons, we are of the view that the ld. CIT(A) was not justified in confirming the action of the A.O. From the above observation and by respectfully following the above said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f claim u/s. 80P(2)(d) of the Act does not fall within the adjustments allowable u/s. 143(1)(a) of the Act. 3. The brief facts are that the assessee is a co-operative housing society, earning rental income and interest on deposits with co-operative banks and had filed its return of income for A.Y. 2020-21 dated 08.02.2021, declaring total income of Rs.4,21,150/- after claiming deduction u/s.80P, amounting to Rs.10,35,413/-. While processing the returns u/s.143(1), the claim of deduction u/s. 80P amounting to Rs.10,35,413/- was disallowed. The assessee filed a rectification application u/s. 154 before the CPC, Bangalore which had rejected the said application without specifying any reason. 4. Aggrieved by this, the assessee preferred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the co-operative society which is registered under the Co-operative Society s Act or under any other law for the time being enforce. The assessee further states that the assessee is entitled to deduction u/s. 80P(2)(d) in respect of the entire income derived by way of interest or dividends from its investments with another co-operative society which also includes co-operative banks. 8. Per contra, the Revenue contends that the interest derived by way of deposit for investment of surplus funds is of the same nature as income out of interest earned from a scheduled bank and there is no difference between either scheduled bank or a cooperative bank and that section 80P(2) of the Act is not applicable in case of such income. The ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. Hence, the income by way of interest earned by deposit or investment of idle or surplus funds does not change its character irrespective of the fact whether such income of interest is earned from a schedule bank or a co-operative bank and thus, clause (d) of Section 80P(2)/ of the Act would not apply in the facts and circumstances of the present case. The person or body corporate from which such interest income is received will not change its character, viz. interest income not arising from its business operations, which made it ineligible for deduction under Section 80P of the Act, as held by the Hon'ble Supreme Court. 24. In view of the aforesaid, we are of the opinion that the appeals filed by the Revenue deserve to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee on its investments held with a co-operative bank would be eligible for claim of deduction under Sec. 80P(2)(d) of the Act. Still further, we find that the CBDT Circular No. 14, dated 28.12.2006, as had been relied upon by the ld. A.R, also makes it clear beyond any scope of doubt, that the purpose behind enactment of subsection (4) of Sec. 80P was to provide that the co- operative banks which are functioning at par with other banks would no more be entitled for claim of deduction under Sec. 80P(4) of the Act. We are of the considered view that the reliance placed by the CIT(A) on the judgment of the Hon ‟ ble Supreme Court in the case of Totgars Co- operative Sale Society Ltd. (supra) being distinguishable on facts, thus, had wrong ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Hon'ble High Court of Karnataka in the case of Totagars co-operative Sale Society (supra), the High Court had concluded that a co-operative society would not be entitled to claim of deduction under Sec. 80P(2)(d). We however find that as held by the Hon'ble High Court of Bombay in the case of K. Subramanian and Anr. Vs. Siemens India Ltd. and Anr (1985) 156 ITR 11 (Bom), where there is a conflict between the decisions of non-jurisdictional High Court ‟ s, then a view which is in favour of the assessee is to be preferred as against that taken against him. Thus, taking support from the aforesaid judicial pronouncement of the Hon ‟ ble High Court of jurisdiction, we respectfully follow the view taken by the Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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