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TMI Blog2024 (7) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... isallowing the deduction of Rs. 41,65,363/- on account of interest income earned out of fixed deposit with Cooperative/ Nationalised Bank and which is eligible for deduction u/s 80P(2)(d) or 80P(2)(a)(i) of the IT Act. 2. On the facts and in the prevailing circumstances of the case and in law, the learned CIT Appeal, erred in not following the jurisdictional ITAT Pune, decision on the similar issue which is binding on the lower Authorities as per the law laid down by Hon'ble Bombay High Court in the case of Bank of Barada vs H C Srivastava (256 ITR 385) and thus the total deduction of Rs. 41,65,363/- disallowed u/s 80P(2)(a)(i) or 80P(2)(d) of the IT Act was not justified. 3. The Appellate craves the right to add, amend, modify, alt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed the records. It is mentioned in the assessment order that the assessee is a Credit Co-operative Society registered under Maharashtra Co-operative Societies Act. The prime function of the society is accepting deposits and advancing loans to the members. During the A.Y.2020-21, the assessee has earned an interest income of Rs. 41,65,336/- from investments with various co-operative banks/banks as under: Sr No Particulars Amount 1 NDCC Bank FDR 1019080 2 Namco Bank FDR 22581234 3 Dena Bank FDR 2303770 4 Thane Janata Sahakari Bank FDR 10412817 5 Shamrav Vitthal Co-operative Bank FDR 10636209 6 Saraswat Co-operative Bank FDR 11529801 7 NDCC Bank FDR 1790250 5.1 Assessee claimed deduction u/sec. 80P(2)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quired. 6.2 The Hon'ble High Court of Andhra Pradesh and Telangana in the case of Vavveru Co-operative Rural Bank Ltd. [2017] 396 ITR 371 analysed the provisions of Section 80P, succinctly distinguished the decision of the Hon'ble Supreme Court in the case of Totagar Cooperative Sale Society, and held as under : Quote, "8. Therefore, the real controversy arising in these writ petitions is as to whether the income derived by the petitioners by way of interest on the fixed deposits made by them with the banks, is to be treated as profits and gains of business attributable to any one of the activities indicated in sub-clauses (i) to (vii) of clause (a) of subsection (2) of section 80P or not. 9. While the petitioners place strong reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome derived from the investments made by retaining the monies belonging to the members cannot certainly be termed as profits and gains of business. This is why Totgar's struck a different note. 35. But, as rightly contended by the learned senior counsel for the petitioners, the investment made by the petitioners in fixed deposits in nationalised banks, were of their own monies. If the petitioners had invested those amounts in fixed deposits in other co-operative societies or in the construction of godowns and warehouses, the respondents would have granted the benefit of deduction under clause (d) or (e), as the case may be. 36. The original source of the investments made by the petitioners in nationalised banks is admittedly the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e bank qualifies for deduction both under the provisions of section 80P(2)(a)(i) and section 80P(2)(d) of the Act, therefore, the reasoning given by the lower authorities on this issue cannot be accepted. Therefore, I direct the Assessing Officer to allow deduction u/s 80P(2)(a)(i) and 80P(2)(d) in respect of interest income earned from cooperative bank/scheduled bank. Thus, the ground of appeal filed by the assessee stands allowed." Unquote 8. The Hon'ble ITAT Pune Bench in the case of Yashwant Nagari Sahakari Patsanstha Maryadit Vs. ITO in ITA No.644/PUN/2024 dated 04.06.2024 held that the assessee was eligible for deduction u/sec. 80P(2)(a ) of the Act on the Interest earned by assessee. 7.1 Respectfully following the decision of the H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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