TMI Blog2023 (7) TMI 741X X X X Extracts X X X X X X X X Extracts X X X X ..... ve Banks, which are Co-operative Societies and also possesses a licence from RBI to do banking business. The limited object of section 80P(4) is to exclude Co-operative Banks that function at par with other commercial banks i.e. which lend money to members of the public. Thus, section 80P(4) of the Act is of relevance only in a case where the assessee, who is a Co-operative Bank, claims a deduction under section 80P of the Act which are not the facts of the present case. No merits in the aforesaid reasoning adopted by the AO in denying deduction under section 80P(2)(d) of the Act to the assessee. Claim of deduction u/s 80P(2)(d) - All Co-operative Banks are Co-operative Societies but vice versa is not true. We find that the coordina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing deduction u/s.80P (2) (d) of the IT Act, 1961 without appreciating legislative intent of the inserted provision of 80(P) which specifically provides that section shall not apply in relation to any cooperative bank other than a primary agricultural credit society or primary cooperative agricultural and rural developer bank. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in allowing deduction u/s 80P(2)(d) of the I.T. Act, 1961, without appreciating the facts that the assessee has erred interest income from investment of idle funds with cooperative bank. 3. On the facts and in circumstances of the case and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings, the assessee submitted that the interest has been received from investments made with The Mumbai District Central Co-operative Bank Ltd, The Saraswat Co-operative Bank Ltd, and The Shamrao Vithal Co-operative Bank Ltd. The assessee claimed that it is entitled to a 100% deduction in respect of interest earned/received from the Co-operative Banks under the provisions of section 80P(2)(d) of the Act. 5. The Assessing Officer ( AO ) vide order dated 17/02/2021, passed under section 143(3) read with sections 143(3A) 143(3B) of the Act did not agree with the submissions of the assessee and held that the deduction under section 80P(2)(d) of the Act cannot be extended to the interest earned from the investment in any Co-operative Bank as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present case. As per the provisions of section 80P(1) of the Act, the income referred to in sub-section (2) to section 80P shall be allowed as a deduction to an assessee being a Co-operative Society. Further, section 80P(2)(d) of the Act, reads as under: 80P. Deduction in respect of income of co-operative societies. (1) ...... (2) The sums referred to in sub-section (1) shall be the following, namely: (a) ..... (b) ..... (c) ..... (d) in respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other co-operative society, the whole of such income; 9. Thus, for the purpose of provisions of section 80P(2)(d) of the Act, two conditions are r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k is covered under the provisions of section 80P(4) of the Act. We find that the Hon‟ble Supreme Court in Mavilayi Service Co-operative Bank Ltd. vs CIT, Calicut, [2021] 431 ITR 1 (SC) while analysing the provisions of section 80P(4) of the Act held that section 80P(4) is a proviso to the main provision contained in section 80P(1) and (2) and excludes only Co-operative Banks, which are Co-operative Societies and also possesses a licence from RBI to do banking business. The Hon‟ble Supreme Court further held that the limited object of section 80P(4) is to exclude Co-operative Banks that function at par with other commercial banks i.e. which lend money to members of the public. Thus, we are of the considered view that section 80P( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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