TMI Blog2023 (9) TMI 592X X X X Extracts X X X X X X X X Extracts X X X X ..... s the interest income from the credit facility provided to the members would be a regular business income of the society eligible for deduction u/s 80P. As per the section 80P(2)(d) the interest received on the deposit with other cooperative society is also eligible for deduction u/s 80P of the Act. If the deposit is made with a Cooperative Bank then the said bank would be considered as a Cooperative Society for the purpose of section 80P(2)(d) so far as the income is eligible for deduction u/s 80P(1) of the Act. AO has made the addition of the entire interest income has shown in profit and loss account without even considering the facts as to how much interest income received by the assessee from its members. The dispute may be regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1,59,22,236/- as against the returned income of Nil. 2. The Ld. Assessing Officer erred in law and facts of the case and made an addition of Rs. 1,59,22,236/- on account of deduction claimed under section 80P under chapter VI-A of the Income Tax Act, 1961 as is admissible deduction to a co-operative society. The addition therefore made by the AO is totally wrong and without considering the facts of the case. 3. That the appellant craves to leave add alter or a mend any of the ground at or before hearing. 2. The assessee is a credit co-operative society engaged in providing credit facilities to its members. The assessee filed its return of income for the year under consideration on 15.09.2020 declaring total income at nil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, the assessee society is required to maintain some liquid funds. That is why, generally, credit societies used to invest in fixed deposits. Furthermore, in many cases, credit societies maintain overdraft facility with nationalized banks to augment its day-to- day business needs. Furthermore, to some extent, the deposits are also required to be kept, out of operational funds, as per extant legislative requirements. The same thing is done by the assessee society as well. Naturally, this entire activity and income arising there from is nothing but attributable to business of banking. 4. He has referred to the audited financial statement of Co-operative society at page 21 of paper book, the Interest earning breakup at Schedule 12 of Financ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed banks and the surplus is just lying with co-operative societies(Indore Premier Co-operatives Societies) whose income is also attributable to Business of Assessee Society as the object of Co-op Society providing credit is the only sole objective and not engaged in any other work. Therefore, Ld. AR submitted that the ultimate net profit of the co- operative society is within the ambit of Act us 80P(2)(a)(i) being primary object of the assessee society to carry on business of banking or providing credit facilities to its members 6. He has relied upon the decision of Karnataka High Court in the case of Tumkur Merchants Souharda Credit Co-operative Society Ltd. (230 Taxman 309) and submitted that the Hon ble High Court has held Coopera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er submitted that ld. CIT(A) has confirmed the order of the Assessing Officer by following the judgment of Hon ble Supreme Court in case of Totagars Co-operative Society vs. ITO (supra). He has relied upon the orders of the authorities below. 10. We have considered the rival submissions as well as relevant material on record. The assessee is a credit cooperative society and claim to have engaged in the providing credit facilities to the members of the society. The assessee claimed deduction u/s 80P of the Act on the entire income of the assessee including interest income. The AO denied this claim under section 80P for want of any explanation. The relevant part of the assessment order as under: 1. Reasons for selection of the case a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igible for deduction u/s 80P of the Act. If the deposit is made with a Cooperative Bank then the said bank would be considered as a Cooperative Society for the purpose of section 80P(2)(d) of the Act so far as the income is eligible for deduction u/s 80P(1) of the Act. The AO has made the addition of the entire interest income has shown in profit and loss account without even considering the facts as to how much interest income received by the assessee from its members. The dispute may be regarding eligibility of deduction u/s 80P in respect of the interest income earned from the deposit made in the Schedule Banks or other than members. Therefore, the interest income received from the members against the credit facility provided by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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