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TMI Blog2021 (11) TMI 1198X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn of income for the assessment year 2012-13 was filed on 27.09.2012 declaring total income of Rs.Nil after claiming deduction u/s 80P(2)(d) of the Income Tax Act, 1961 ('the Act') amounting to Rs. 1,80,144/- being interest and dividend earned on Reserve Funds and Shares. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-1(1), Belgaum ('the Assessing Officer') vide order dated 24.10.2014 passed u/s 143(3) of the Act at a total income of Rs. 1,81,360/- after denying the claim of deduction by holding that the provisions of section 80P(2)(d) of the Act are not applicable to the facts of the present case of the assessee. 3. Being aggrieved by the above action of the Assessing Officer, an appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of deduction u/s 80P(2)(d) is that interest income should have been derived from the investment made by the assessee cooperative society with any other cooperative society. In the present case, the reasoning given by the lower authorities for denial of exemption u/s 80P(2)(d) of the Act is that interest was received from cooperative bank has no legs to stand as a cooperative bank is also a cooperative society. This issue was considered by the Hon'ble Karnataka High Court in the case of CIT vs. Totagars Cooperative Sale Society, 392 ITR 74 (Karn) wherein the Hon'ble High Court referring to the Hon'ble Supreme Court in the case of Totgars Co-operative Sales Society Ltd. (supra) held that the ratio of decision of the Hon'ble Supreme Court i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wed similar deduction. In the said case, the Tribunal discussed the contrary views expressed by the Hon'ble Karnataka High Court in Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO (2015) 230 Taxman 309 (Kar.) allowing deduction u/s. 80P on interest income and that of the Hon'ble Delhi High Court in Mantola Cooperative Thrift Credit Society Ltd. Vs. CIT (2014) 110 DTR 89 (Delhi) not allowing deduction u/s. 80P on interest income earned from banks. Both the Hon'ble High Courts took into consideration the ratio laid down in the case of Totgar's Cooperative Sale Society Ltd. (2010) 322 ITR 283 (SC). There being no direct judgment from the Hon'ble jurisdictional High Court on the point, the Tribunal in Shri Laxmi Na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. Pr. CIT was not justified in exercising the revisional power anent to interest income of Rs. 22,34,270/- earned on investments made with co-operative banks." 9. In the light of the above legal position of law and the reasoning adopted by the Assessing Officer as well as the ld. CIT(A) cannot be accepted. However, from material on record it is not clear that whether the entire interest income was received from cooperative bank or other bank?. In the circumstances, we remit the matter to the file of the Assessing Officer for the purpose of verifying whether entire interest income of Rs. 1,80,144/- was received from other cooperative bank, if so, allow the same or otherwise restricted the exemption to the extent of income received from ot ..... X X X X Extracts X X X X X X X X Extracts X X X X
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