TMI Blog2023 (9) TMI 1410X X X X Extracts X X X X X X X X Extracts X X X X ..... y the assessee is entitled for the exemption on the interest earned on the deposits. Decided in favour of assesee. - Dr. S. Seethalakshmi, JM Shri Rathod Kamlesh Jayantbhai, AM For the Appellant : Shri Rajendra Jain-Adv. For the Respondent : Shri S.M. Joshi, JCIT-DR ORDER PER: DR. S. SEETHALAKSHMI, JM The Revenue has filed an appeal against the order of the Learned Commissioner of Income Tax, Ajmer [herein after Ld.CIT(A) ] dated 27.02.2019 for the assessment year 2016-17. 2. The Revenue has raised the following grounds of appeal:- On facts and in law, the Ld. CIT(A), Ajmer erred in :- 1. deleting the addition of Rs. 2,23,46,187/- made on account of disallowance of deduction claimed u/s. 80P(2)(d) of the I.T. Act, ACIT vs. M/s Bhilwara Zila Dugdh Utpadak Sahakari Sangh Ltd. 1961, as the Baroda Rajasthan Gramin Bank Ltd. is not registered under the Co-operative Societies Act, 1912 or under any other law for registration of co-operative societies, as provided u/s. 2(19) of the I.T. Act, 1961; 2. not considering relevant part of the Circular No.6/2010 which provides that the Circular No.319 dated 11.01.1982 deeming any Regional Rur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oda Rajasthan Gramin Bank Ltd. And Central Co-op. Bank, is not allowable deduction u/s 80P(2)(d) of the Act as these entities are not the cooperative societies as provided u/s 80P(2)(d) of the I.T. Act, 1961. In view of the above, it is concluded that the interest received from the Baroda Rajasthan Gramin Bank Ltd. Is not the co-operative societies as provided u/s 80P(2)(d) of the I.T. Act, 1961. Therefore, the out of total deduction of Rs. 2,39,77,539/- the deduction to the tune of Rs. 2,23,46,187/- is disallowed and added back to the total income of the assessee for the assessment year 2016-17. 4. Being aggrieved by the order of the AO the assessee preferred an appeal before the ld. CIT(A) and the findings are reproduced as under:- 4.3 I have gone through the assessment order, statement of facts, grounds of appeal and written submission carefully. It is seen that the appellant has contended that the issue is covered in favor of the assessee in assessee's own case by the ITAT Jodhpur's order dated 31.10.2018 (ITA No. 437/Jodh/2017, A.Y. 2014-15). I have gone through the ITATS Jodhpur order dated 31.10.2018 carefully. It is seen that the ITAT has observed as under at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 80P when the section was originally introduced However, as section 22 of the Regional Rural Bank Act provides that a RRB shall be deemed to be cooperative society for the purposes of the Income-tax Act, 1961, in order to make such banks eligible for deduction under section 80P. CBDT issued a beneficial Circular No. 319 dated 11-1-1982, which stated that for the purpose of section 80P, a Regional Rural Bank shall be deemed to be a cooperative society. 3. Section 80P was amended by the Finance Act, 2006, with effect from 1-4-2007 introducing sub-section (4), which laid down specifically that the provisions of section 80P will not apply to any cooperative bank other than a Primary Agricultural Credit Society or a Primary Cooperative Agricultural and Rural Development Bank Accordingly, deduction under section 80P was no more available to any Regional Rural Bank from assessment year 2007-08 onwards. An OM dated 25-8-2006 addressed to RBI was issued by the Board clarifying that Regional Rural Banks would not be eligible for deduction under section 80P of the Income-tax Act, 1961 from the assessment year 2007-08 onwards. 4. It has been bought to the notice of the Board that despi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 2,23,46,187/- made on same ground u/s 80P(2)(d) of the Act, deleted the Coordinate Bench vide its order in ITA 437/Jodh/2017 dated 31.10.2018 has not been accepted by the Revenue and further appeal has been preferred before the Hon ble High Court as also stated in ground No. 3 of the From No. 36. 6. Per contra, the ld. AR for the assessee submitted that the Department has preferred an appeal against the order in ITA No. 437/Jodh/2017 dated 31.10.2018 wherein the Hon ble Rajasthan High court, Jodhpur has decided in Revenue s appeal filed for the assessment year 2014-15 in the case of PCIT, Ajmer vs M/s Bhilwara Zila Dugdh Utpadak Sahakari Sangh Ltd. in BD Income Tax Appeal No. 2/2019 vide its order dated 13.08.2019. 7. We have heard the both parties and perused the materials available on record. The Bench observed that the said appeal was filed on the basis of that addition of Rs. 2,23,46,187/- u/s 80P(2)(d) of the Act. We note that the department has preferred an appeal against the order of ld. CIT(A) for assessment year 2016-17 wherein the disallowance of deduction claimed u/s 80P(2)(d) of the Act amount to Rs. 2,23,46,187/- was deleted. The issue before us is that wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve Societies and all the contingent consequences that flow from it. For the above reasons, this court is of the opinion that there is no substantial question of law involved in the present appeal. The appeal is, therefore, dismissed. Taking into consideration the present facts and circumstances of the case, we observed that the ld. CIT(A) has rightly passed the order as the similar written submission filed by the assessee during the appellate proceeding and the identical issue which is in favour of the assessee s own case of the Coordinate Bench in case by the ITAT, Jodhpur s order dated 31.10.2018 in ITA No. 437/Jodh/2017, A.Y. 2014-15) which have been confirmed by the Hon ble Court. The relevant observation of ITAT is as under:- 5. We have considered the rival submission of the parties and have gone through the assessment proceedings the AO noted that assessee has claimed exemption of interest income on FDR with Central Cooperative Bank Ltd., for Rs.76,43.562/- and interest on FDR with Baroda Rajasthan Kshetriya Gramin Bank of Rs.2,09,91,701 The AO allowed the exemption on interest received from Central Co-operative Bank However, the AO disallowed the exemption on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 80P was amended by the Finance Act, 2006, with effect from 1-4-2007 introducing sub-section (4), which laid down specifically that the provisions of section 80P will not apply to any cooperative bank other than a Primary Agricultural Credit Society or a Primary Cooperative Agricultural and Rural Development Bank Accordingly, deduction under section 80P was no more available to any Regional Rural Bank from assessment year 2007-08 onwards. An OM dated 25-8-2006 addressed to RBI was issued by the Board clarifying that Regional Rural Banks would not be eligible for deduction under section 80P of the Income-tax Act, 1961 from the assessment year 2007-08 onwards. 4. It has been bought to the notice of the Board that despite the amended provisions, some Regional Rural Banks continue to claim deduction under section 80P on the ground that they are cooperative societies covered by section 80P(1) read with Boards Circular No. 319 dated 11-1-1982. 5. It is, therefore, reiterated that Regional Rural Banks are not eligible for deduction under section 80P of the Income-tax Act, 1961 from the assessment year 2007-08 onwards. Furthermore, the Circular No. 319 dated 11-1-1982 deeming any Regio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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