TMI Blog2024 (1) TMI 1034X X X X Extracts X X X X X X X X Extracts X X X X ..... uction only to co-operative banks. The assessee is admittedly not a co-operative bank. AO instead of treating the assessee as credit co-operative society considered the assessee as primary co-operative bank without any basis. In view of the above facts, we hold that interest income earned by the assessee on fixed deposits with the co-operative banks are eligible for deduction under Section 80P(2)(d) of the Act. We also find that in case of Kerala State Co-Operative Agricultural Rural Development Bank Ltd [ 2023 (9) TMI 761 - SUPREME COURT] where in decision of Mavilayi Service Co-operative Bank Ltd [ 2021 (1) TMI 488 - SUPREME COURT] has also allowed the claim of assesses u/s 80P (2) (d) of the Act. Thus, now the issue is squarely covered in favour of the assessee. In view of this on both the grounds of reopening as well as on the merits the orders of the lower authorities are reversed and the learned Assessing Officer is directed to grant assessee s deduction under Section 80P(2)(d) of the Act. Accordingly, the appeal of the assessee is allowed. - Shri Prashant Maharishi, AM And Shri Rahul Chaudhary, JM For the Assessee : Mr. Siddesh Mayekar, AR For the Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dded directive that only interest income from co-operative banks without banking licence will be eligible for such deduction even though there is no such directive or finding in the Order of Hon. Supreme Court. 3.3. The learned CIT (A) erred when he ignored the fact that for a co-operative society to be considered as co-operative bank, it is required to have banking licence issued by Reserve Bank of India and co-operative society without banking licence cannot be considered as bank. 3.4. The learned CIT (A) erred when he failed to follow the principle laid down by the Order of Hon. Supreme Court that co-operative banks are also co- operative societies and income derived by a co-operative society from its investment held with a co-operative bank would be entitled for claim of deduction u/s. 80P(2)(d) of the Act. 3.5. The learned CIT(A) erred when he dismissed the Appellant's contention that precedent set by the Department in the Appellant's own cases in the earlier assessment years has not been followed. 3.6. The learned CIT(A) erred when he passed the Order merely two days after the Appellant made its final submission thereby disposing off appeal injudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 80P (2) (d) of the Act, in view of the decision of Hon'ble Supreme Court in 123 taxmann.com 161 and allowed the deduction. He further directed the learned Assessing Officer to assess the interest earned on the deposits held with schedule bank/ co-operative banks holding license issued by the Reserve Bank of India, Commercial Bank and Financial Institutions under the head income from other sources. Accordingly, the appeal of the assessee is partly allowed. 06. The assessee is aggrieved on the issue of reopening of the assessment holding that the assessment was reopened due to change of opinion and in absence of any tangible material it also challenges the approval granted by the learned Pr. CIT in mechanical manner and without application of mind. 07. The assessee is also aggrieved with the learned Assessing Officer and learned CIT (A) holding that under Section 80P(2)(a) of the Act only the interest income received from the members would be eligible for deduction. The assessee is also aggrieved by the direction of the learned CIT (A) that interest income earned from co-operative bank without banking license only would be eligible for such deduction. It is furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vities is deductible under Section 80P(2)(a) of the Act. Even otherwise, in respect of any income by way of interest or dividend derived by the co-operative society from its investment with any other co-operative society is also allowable as deduction fully under Section 80P(2)(d) of the Act, the facts are clear that assessee is a co-operative society and co-operative banks are also co-operative societies. The provisions of Section 80P (4) of the Act specifically denies deduction only to co-operative banks. The assessee is admittedly not a co-operative bank. The learned Assessing Officer instead of treating the assessee as credit co-operative society considered the assessee as primary co-operative bank without any basis. In view of the above facts, we hold that interest income earned by the assessee on fixed deposits with the co-operative banks are eligible for deduction under Section 80P(2)(d) of the Act. 010. We also find that honourable supreme court in case of Kerala State Co-Operative Agricultural Rural Development Bank Ltd. [2023] 154 taxmann.com 305 (SC) where in decision of Mavilayi Service Co-operative Bank Ltd. v. CIT [2021] 123 taxmann.com 161/279 Taxman 75 has also ..... X X X X Extracts X X X X X X X X Extracts X X X X
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