9911796707
TMI Blog2024 (6) TMI 1390X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 21.12.2023 for AY 2020-21. The only issue contended in this appeal is the disallowance of deduction under section 80P(2)(d) of the Income Tax Act, 1961 (the Act). 2. The assessee is a Co-operative Society which maintains industrial / commercial Galas. The details of the return filed and the deduction claimed under section 80P for the AYs under consideration are tabulated below: AY Date of filing of return Income returned Deduction u/s 80P(2)(d) 2020-21 09.01.2021 Rs. 18,18,650/- Rs. 75,51,959/- 2017-18 08.12.2017 Rs. 1,09,89,963/- Rs. 87,58,953/- 2018-19 26.11.2018 Rs. 15,43,820/- Rs. 47,71,651/- 3. During the course of assessment, the AO disallowed the deduction claimed by the assessee under section 80P(2)(d) fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nate bench in a recent decision dated 05.04.2024 in the case of Shivsahyadri Sahakari Patpedhi Maryadit Vs. ITO in ITA No. 3829/Mum/2023. Accordingly the ld AR prayed that the disallowance made towards deduction claimed under section 80P(2)(d) be deleted. 5. The ld. DR on the other hand submitted that the Hon'ble Gujarat High Court in the case of Katlary Kariyana Merchant Sahkari Vs. (ACIT 327 CTR 138) has held that the assessee is not entitled for deduction under section 80P(2)(d) towards the interest income received from deposit with Co-operative Bank. The ld. DR therefore, submitted that the lower authorities have correctly denied the benefit of deduction to the assessee. 6. We have heard the parties and perused the material availa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest or dividends derived by the cooperative society from its investments with any other co-operative society, the whole of such income;" 7. Thus, for the purpose of provisions of section 80P(2)(d) of the Act, two conditions are required to be cumulatively satisfied- (i) income by way of interest or dividend is earned by the Co-operative Society from the investments, and (ii) such investments should be with any other Co-operative Society. Further, the term 'cooperative society' is defined under section 2(19) of the Act as under: "(19) "co-operative society" means a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State for the registration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Co-operative Bank, claims a deduction under section 80P of the Act which is not the facts of the present case. We find that the Hon'ble Supreme Court in Mavilayi Service Co-operative Bank Ltd. vs CIT, Calicut, [2021] 431 ITR 1 (SC) while analysing the provisions of section 80P(4) of the Act held that section 80P(4) is a proviso to the main provision contained in section 80P(1) and (2) and excludes only Co-operative Banks, which are Co-operative Societies and also possesses a licence from RBI to do banking business. The Hon'ble Supreme Court further held that the limited object of section 80P(4) is to exclude Co-operative Banks that function at par with other commercial banks i.e. which lend money to members of the public. Therefore, we f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s investment with any other co-operative society, the whole of such income" 9. A reading of the above said provision makes it clear that in the event if any Co-operative Society derived income by way of interest from investment made in any other Co-operative Society the whole such interest is eligible for deduction. Now the issue is as to whether the Co- operative Bank would fall within the purview of the term 'Co-operative Society'. In the present case, the petitioner produced a document to show that the Cooperative Bank, where they have made investments was registered under the Tamil Nadu Co-operative Societies Act, 1983 on 20.5.2003. In this regard, he also produced a copy of the Certificate of Incorporation of the said Co-ope ..... X X X X Extracts X X X X X X X X Extracts X X X X
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