TMI Blog2023 (5) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... pex Bank [ 2001 (8) TMI 9 - SUPREME COURT] the fixed deposit or rather government securities coming out of reserve fund which cannot be easily encashed and which could be utilised only when the contingencies mentioned arose, was taken into account while citing question of law i.e. wherein case of assessee being cooperative society, any income recorded in sub-section 2 there shall be in accordance with and sub-section to the provisions of Section i.e. Section 80P, the same is specified in sub-section 2 in computing the total income of the assessee, therefore, whether the Tribunal was right in law in holding that the interest income arising from the investments made out of reserve fund is exempt under Section 80P(2)(a)(i) of the Act. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Revenue : Shri N.J. Vyas, Sr. DR ORDER This appeal is filed by the Assessee against order dated 28.07.2020 passed by the CIT(A), Gandhinagar for the Assessment Year 2017-18. 2. The Assessee has raised the following grounds of appeal :- 1. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in confirming disallowance of Rs.23,54,135/- being deduction claimed by the appellant under section 80P of the I.T. Act, 1961 without considering the fact that the appellant is a credit cooperative society and cannot be denied of the benefits of deduction under Section 80P of the I.T. Act, 1961. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in not allowing the claim of proportion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om deposits from Mehsana District Central Co-op. Bank. The Assessing Officer also made addition of Rs.13,204/- in respect of Provident Fund SB account of staff and interest income earned from Mehsana District Central Co-op. Bank. The Assessing Officer also made addition of Rs.1,70,222/- in respect of interest certificate from Mehsana District Central Co-op. Bank pertaining to PF FDR of staff. 4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee. 5. As regards ground no.1, the Ld. AR submitted that the CIT(A) as well as the Assessing Officer erred in making disallowance of Rs.23,54,135/- being deduction claimed by the assessee under Section 80P of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Ld. AR of Hon ble Supreme Court in case of Karnataka State Co-operative Apex Bank (supra) the fixed deposit or rather government securities coming out of reserve fund which cannot be easily encashed and which could be utilised only when the contingencies mentioned arose, was taken into account while citing question of law i.e. wherein case of assessee being cooperative society, any income recorded in sub-section 2 there shall be in accordance with and sub-section to the provisions of Section i.e. Section 80P, the same is specified in sub-section 2 in computing the total income of the assessee, therefore, whether the Tribunal was right in law in holding that the interest income arising from the investments made out of reserve fund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t income and the assessee must have incurred expenditure for earning the same interest income. The proximity of earning the interest income is rightly claimed in respect of expenditure spent on earning that interest income. The decision of Hon ble Karnataka high Court in the case of Totagars Co-operative Sale Society Limited (supra) as well as the decision of ITAT Ahmedabad Bench in the case of ITO vs. Upkar Retail Pvt. Ltd. is also applicable and the most favoured view should be taken into account as per the decision of the Hon ble Supreme Court in the case of CIT vs. Vegetable Products Limited (1973) CTR 177 (SC). Therefore, ground no.2 is allowed. 11. In the result, appeal filed by the assessee is partly allowed for statistical purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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