2023 (10) TMI 272

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..... ed for the purpose of providing credit facilities to its members. The Return of Income for the assessment year 2020-21 was filed on 15.02.2021 declaring total income of Rs. Nil after claiming exemption u/s 80P of the Income Tax Act, 1961 ('the Act'). Against the said return of income, the assessment was completed by the Assessing Officer vide order dated 20.09.2022 passed u/s 143(3) r.w.s. 144B of the Act at a total income of Rs. 25,05,488/-. While doing so, the Assessing Officer had brought to tax the interest earned on FDs with the co-operative banks and interest earned from SB Accounts with the co-operative banks by holding that the said interest does not qualify for deduction u/s 80P(2)(a)(i) of the Act. 3. Being aggrieved, an appeal w .....

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..... t Society Ltd., 438 ITR 631 (Bom.). 8. As regards, the issue as to the allowability of exemption under the provisions of section 80P(2)(d) in respect of interest income earned by a cooperative society from the cooperative bank. There is a cleavage of judicial opinion among several High Courts on the issue of eligibility of this kind of income for exemption u/s. 80P(2)(a)(i) of the Act. The Hon'ble Punjab & Haryana High Court in the case of CIT vs. Punjab State Cooperative Federation of Housing Building Societies Ltd. 11 taxmann.com 448, the Hon'ble Gujarat High Court in the case of State Bank of India Vs. CIT 389 ITR 578 (Guj.), the Hon'ble Delhi High Court in the case of Mantola Co-operative Thrift & Credit Society Ltd. Vs. CIT 50 taxmann .....

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..... Tumkur Merchants Souharda Credit Cooperative Ltd. (supra). Respectfully following the decision of the Coordinate Bench of the Tribunal, I am of the considered opinion that the interest income earned on fixed deposits with cooperative bank/scheduled bank partakes character of the business income, which is eligible for deduction u/s 80P(2)(a)(i) of the Act. Therefore, we direct the Assessing Officer to delete the addition of Rs. 25,05,488/- by allowing the exemption u/s 80P(2)(a)(i) and section 80P(2)(d) of the Act. Thus, the grounds of appeal filed by the assessee stand allowed. 9. In the result, the appeal filed by the assessee stands allowed. Order pronounced on this 05th day of October, 2023.
Case laws, Decisions, Judgements, Orders .....

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