TMI Blog2023 (10) TMI 766X X X X Extracts X X X X X X X X Extracts X X X X ..... M): Aforesaid appeals bearing common question of law and facts pertaining to Assessment years 2014-15 and 2015-16 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 27/01/2023 passed by the National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as the 'CIT(A)'] qua the Assessment Years 2015-16 2014-15 on the identically worded grounds except difference in figure of addition/disallowance (grounds of A.Y. 2014-15 are taken for the sake of brevity) inter-alia that:- Being aggrieved by the order dated 27.01.2023 passed by the learned Commissioner of Income Tax (Appeals), Income Tax Department, National Faceless Assessment Centre, Delhi [ Ld. CIT(A) ] u/s 250 of the Income-tax Act, 1961 ( Act ), your appellant prefers this appeal, among others, on the following grounds of appeal, each of which is without prejudice to, and independent of, the other: 1. On the facts and in the circumstances of the case, and also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision rendered by Hon ble Supreme Court in case of Totgars Co-operative Sale Society Ltd. vs. ITO (2010) 322 ITR 283 (SC). 8. 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 the contentions advanced by the ld. Authorized representatives for both the parties in context of the aforesaid issue under consideration. As stated by the ld. A.R, and rightly so, the issue that interest received by a co- operative society on its deposits with co-operative banks would be eligible for deduction u/s 80P(2)(d) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 relevant extract of the aforesaid statutory provision, viz. Sec. 80P(2)(d), as the same would have a strong bearing on the adjudication of the issue before us. 80P(2)(d) (1). Where in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub- section ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 be entitled for claim of deduction under Sec. 80P(2)(d) on the interest income derived from its investments held with a co-operative bank is covered in favour of the assessee in the following cases: (i) Land and Cooperative Housing Society Ltd. Vs. ITO (2017) 46 CCH 52 (M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestments 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 that the interest income earned by a cooperative society on its investments held with a cooperative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act. 9. Be that as it may, in our considered view, as the A.O while framing the assessment had taken a possible view, and therein con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew 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. 10. 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. 11. Identical issue has also been decided by the Coordinate Bench of Tribunal in favour of the assessee in its own case vide order dated 23.02.2023 in ITA No. 3229 and 3230/Mum-2022 for A.Ys. 2013-14 2018-19. 12. 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. 13. Resultantly, appeal filed by the assessee is allowed for statistical purposes. O ..... X X X X Extracts X X X X X X X X Extracts X X X X
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