TMI Blog2023 (4) TMI 37X X X X Extracts X X X X X X X X Extracts X X X X ..... on 80P(2)(d)? - HELD THAT:- The interest income earned by the co-operative society from investments made out of the surplus fund with other co-operative banks qualifies for deduction u/s 80P(2)(a)(i) or section 80P(2)(d) is not free from the debate, as the very fact there is cleavage of judicial opinion amongst various High Courts clearly establishes that the existence of debate cannot be ruled out. Thus, it is a purely legal debateable issue, which is not amenable to jurisdiction u/s 263 of the Act in view of the discussion made by us supra. Therefore, we are of the considered opinion that the ld. PCIT was not justified in exercising the power of revision u/s 263 in the facts of the present case. Accordingly, the appeal filed by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de out of the surplus with other co-operative society or co-operative banks. The ld. PCIT was of the opinion that the said income is liable to tax under head Income from other sources under the provisions of section 68 of the Act and does not qualify for deduction u/s 80P of the act. The ld. PCIT also observed that the Assessing Officer had allowed the claim made by the appellant society u/s 80P without verification of the claim. In view of the above observations, ld. PCIT formed an opinion that the assessment order passed by the Assessing Officer is erroneous and prejudicial to the interests of the Revenue. Accordingly, issued show-cause notice u/s 263 on 23.11.2022 calling upon the appellant to explain as to why the assessment order dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther co-operative banks qualifies for deduction u/s 80P(2)(a)(i) as well as section 80P(2)(d) of the Act placing reliance on the decision of Co-ordinate bench of this Tribunal in the case of Pragati Gramin Bigarsheti Sahakari Patsanstha Maryadit vs. PCIT in ITA No.303/PUN2022 and others dated 20.12.20222 and, therefore, the ld. PCIT ought not to have exercised the power of revision u/s 263 of the Act. 8. On the other hand, ld. CIT-DR submits that the issue of eligibility of interest income earned on the investments made with other co-operative banks does not qualify for deduction u/s 80P of the Act. During the course of assessment proceedings, the Assessing Officer had not examined the same, therefore, the ld. PCIT rightly exercised the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e heard the rival submissions and perused the material on record. Admittedly, the appellant is a Cooperative society formed under the provisions of Maharashtra Cooperative Societies Act,1960 with the objective of accepting deposits and lending money to its members. The money which is not immediately required for the purpose of lending to the members is deposited with Bank of Baroda in the form of Fixed Deposit. The question is whether the interest so earned qualifies for exemption u/s. 80P(2)(a)(i) of the Act. The AO as well as the CIT(A) were of the opinion that the interest earned from third parties or non-members does not quality for exemption u/s.80P. It is an admitted position that the interest so earned should be taxed as income from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Benches in the case of M/s. Ratnatray Gramin Bigar Sheti Sah. Pat Sanstha Maryadit Vs. ITO (ITA Nos.559/560/PUN/2018, dated 11-12- 2018) has taken view in favour of the assessee following the judgment of Hon ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. (supra). Respectfully following the decision of the Coordinate Bench, we hold that the interest income earned on the investment of surplus money with banks is also eligible for exemption u/s.80P(2)(a)(i) of the Act. Thus, the grounds of appeal No. 1 2 stands allowed. 11. Recently, the Hon ble Madras High Court in the case of Chennai Central Co-operative Bank Ltd. vs. ITO, 148 taxmann.com 17 (Mad.) also held that the benefit of provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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