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TMI Blog2024 (7) TMI 874X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case and in law, the Id. CIT(A) has erred in allowing deduction u/s. 80P(2)(d) of the I.T. Act of Rs. 9,56,635/-. 2. On the facts and circumstances of the case and in law, the Id. CIT(A) has erred in allowing deduction u/s. 80P(2)(d) of the I.T. Act without appreciating the facts that the deposit in cooperative banks lacks the degree of proximity between the members of the society with that of cooperative bank and thus offends this sacrosanct principle of mutuality. This has been established by CIT vis Bankipur Club Ltd 226 ITR 97(SC) and CIT v/s Adarsh Hsg Coop Sty Ltd 2131 TR677(Guj). 3. On the facts and circumstances of the case and in law, the Id. CIT(A) has erred in ignoring Hon'ble Gujarat High Court's observation i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Rs. 50.00 lacs, however, the case of assessee is reopened on the basis of audit objection, therefore, the appeal filed by the Revenue is covered by exception clause 10(c) of CBDT Circular No.3 of 2018. On merit, the ld. Sr. DR for the revenue submits that he fully supports the order of Assessing Officer in bringing the interest income earned from cooperative bank is not eligible for deduction under section 80P(2)(d) as the cooperative banks are not primarily the cooperative societies. 3. On the other hand, the learned Authorised Representative (ld. AR) of the assessee supported the order of ld. CIT(A). The ld. AR of the assessee submits that the Assessing Officer passed the order under Section 144 of the Act despite the fact that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s furnished evidence that Surat District Cooperative Bank is a cooperative society registered under Gujarat State Cooperative Societies Act. I find that in a series of decisions, the various Benches of the Tribunals held that the cooperative banks are primarily cooperative societies and interest earned on deposits with such cooperative bank is exempt under Section 80P(2)(d) of the Act. The Hon'ble Jurisdictional High court in the case of Surat Vankar Sahakari Sangh Ltd. Vs ACIT (2016) 72 taxmann.com 169 (Guj) also held that the assessee cooperative society was eligible for deduction under section 80P(2)(d) in respect of gross interest received from cooperative bank without adjusting interest paid to said bank. I further find that such d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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