TMI Blog2023 (2) TMI 1141X X X X Extracts X X X X X X X X Extracts X X X X ..... ciety on its investment held with co-operative bank would be eligible for claim of deduction u/s 80P(2)(d) - CIT(A) has erred in upholding the denial of deduction by the AO to the assessee under section 80P(2)(d) - Decided in favour of assessee. - ITA Nos. 3229 & 3230/Mum/2022 - - - Dated:- 23-2-2023 - SHRI PRASHANT MAHARISHI (ACCOUNTANT MEMBER) AND SHRI KULDIP SINGH (JUDICIAL MEMBER) For the Assessee : ShriKumar Kale For the Department : Vrinda U Matkarni SR AR ORDER PER: KULDIP SINGH (JM): Aforesaid appeals bearing common question of law and facts pertaining to Assessment years 2013-14 208-19 are being taken up for disposal by way of composite order in order to avoid repetition of discussion. 2. The Appellant, Jansevak Co-op Credit Society Ltd (hereinafter referred to as the 'assessee') by filing the present appeals, sought to set aside the impugned orders both dated 26/10/2022 passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the 'CIT(A)'] qua the assessment orders for Assessment Years 2013-14 and 2018-19 on the identically worded grounds except difference in figure of addition / disallowanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d earned the interest income of Rs. 16, 76, 460/- and Rs. 87, 93, 570/- for A.Y. 2013-14 and A.Y. 2018-19, respectively, which was disallowed by the CPC / AO being he deduction claimed under section 80P of the Act. We have perused the order passed by the Ld.CIT(A), who has decided the issue against the assessee by relying upon the decision rendered by Hon ble Supreme Court in case of Totgars Co-operative Sale Society Ltd. vs. ITO (2010) 322 ITR 283 (SC). 6. However, now this issue is longer res integra having been decided in favour of the assessee in case of Palm Court M Premises Co-operative Society Ltd. in ITA No.561/M/2021 order dated 09.09.2022 by the coordinate bench of Tribunal by distinguishing the judgement rendered by Hon ble Supreme Court in case of Totgars Co-operative Sale Society Ltd (supra) and by discussing the decision rendered by Hon ble Bombay High Court and Hon ble Gujarat High Court wherein it is held that interest income earned by the Co-operative Society on its investment made with cooperative bank would be eligible for claim of deduction under section 80P(2)(d) of the Act by returning following findings: 8. We have given a thoughtful consideration to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue involved in the present appeal revolves around the adjudication of the scope and gamut of sub-section (4) of Sec. 80P as had been made available on the statute, vide the Finance Act 2006, with effect from 01.04.2007. On a perusal of the order passed by the Pr. CIT under Sec. 263 of the Act, we find, that he was of the view that pursuant to insertion of sub-section (4) of Sec. 80P, the assessee would no more be entitled for claim of deduction under Sec. 80P(2)(d) in respect of the interest income that was earned on the amounts which were parked as investments/deposits with co-operative banks, other than a Primary Agricultural Credit Society or a Primary Co-operative Agricultural and Rural Development Bank. Observing, that the co-operative banks from where the assessee was in receipt of interest income were not co-operative societies, the Pr. CIT was of the view that the interest income earned on such investments/deposits would not be eligible for deduction under Sec. 80P(2)(d) of the Act. 7. After necessary deliberations, we are unable to persuade ourselves to be in agreement with the view taken by the Pr. CIT. Before proceeding any further, we may herein reproduce the rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utory provision, viz. Sec. 80P(2)(d) would be duly available. We find that the term cooperative society‟ had been defined under Sec. 2(19) of the Act, as under:- (19) Co-operative society means a cooperative society registered under the Cooperative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any state for the registration of co-operative societies; We are of the considered view, that though the co-operative banks pursuant to the insertion of subsection (4) to Sec. 80P would no more be entitled for claim of deduction under Sec. 80P of the Act, but as a co-operative bank continues to be a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State for the registration of co-operative societies, therefore, the interest income derived by a co-operative society from its investments held with a co-operative bank would be entitled for claim of deduction under Sec.80P(2)(d) of the Act. 8. We shall now advert to the judicial pronouncements that have been relied upon by the ld. A.R. We find that the issue that a co-operative society would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Pr. Commissioner of Income Tax and Anr. Vs. Totagars Cooperative Sale Society (2017) 392 ITR 74 (Karn) and Hon‟ble High Court of Gujarat in the case of State Bank Of India Vs. CIT (2016) 389 ITR 578 (Guj), had observed, that the interest income earned by a co-operative society on its investments held with a cooperative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act. We 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. Accordingly, taking support from the aforesaid judicial pronouncement of the Hon‟ble High Court of jurisdiction, we respectfully follow the view taken by the Hon'ble High Court of Karnataka in the case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Cooperative Sale Society (2017) 392 ITR 74 (Karn) and Hon‟ble High Court of Gujarat in the case of State Bank Of India Vs. CIT (2016) 389 ITR 578 (Guj), wherein it was observed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gujarat High Court in case of State Bank of India vs. CIT (2016) 389 ITR 578 (Guj.) had also held that interest income earned by a co-operative society on its investment held with co-operative bank would be eligible for claim of deduction under section 80P(2)(d) of the Act. We are of the considered view that the Ld. CIT(A) has erred in upholding the denial of deduction by the AO to the assessee under section 80P(2)(d) of the Act. 8. So following the decision rendered by Hon ble Karnataka High Court (supra) and Hon ble Gujarat High Court (supra) and order passed by the coordinate Bench of the Tribunal discussed in preceding paras, we are of the considered view that assessee society who has earned an amount of Rs. 16, 76, 460 and Rs. 87, 93, 570/- for A.Y. 2013-14 and A.Y. 2018-19 respectively from its investment of surplus fund parked with co-operative banks is entitled for deduction under section 80P(2)(d) of the Act. 9. In view of what has been discussed above, we are of the considered view that the Ld. CIT(A) has erred in upholding the denial of deduction by the AO to the assessee society claimed under section 80P(2)(d) of the Act, hence, AO is directed to allow the same. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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