2025 (5) TMI 1381
X X X X Extracts X X X X
X X X X Extracts X X X X
....143(1) of the Act on 25.11.2021, determining the total income at Rs. 6,75,160/-, after making disallowance of Rs. 3,94,856/- claimed by assessee u/s. 80P(2)(d) of the Act. 4. Aggrieved, assessee preferred first appeal before learned CIT(A), who dismissed assessee's appeal. 5. The appellant assessee has preferred this appeal before the Tribunal on the ground that learned Addl/JCIT(A) erred in confirming the disallowance of Rs. 3,94,856/- contratry to the provisions of section 80P(2)(d) of the Act. 6. In response to the notice issued by the tribunal, learned DR appeared and participated in the hearing. 7. We have perused the material on record and heard learned representatives for both the parties. 8. The main point for determination under appeal is as to whether the appellant Co-operative Housing Society is entitled to its claim of deduction of Rs. 3,94,856/- as interest income derived from its investments in the said co-operative bank? 9. Learned AR has submitted that the appellant co-operative housing society has earned interest income of Rs. 3,94,856/- from interest made in New India Co-operative Bank and NKGSB and is entitled to the benefit of deduction u/s. 80P(2)(d) of t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pe of sub-section (4) of Section 80P. Hon'ble Supreme Court in Kerala State Co- operative Agricultural and Rural Development Bank Ltd. (KSCARDB) V The Assessing Officer Trivendrum and Ors, in Civil Appeal no. 10069 of 2016, vide judgment dated 14.09.2023 has also reiterated the same. 13. It appears that learned CIT(A) has taken support from the Hon'ble Apex Court decision in Totgars co-operative Sale Society Ltd. V. Income Tax Officer [2010] 322ITR283(SC). In this view of the matter, Hon'ble Karnataka High Court in Principal Commissioner of Income Tax and another V Totgars Co-operative Sale Society, [2017] 392 ITR 74 (Karn.), has, after referring Hon'ble Apex Court's Judgement in Totgar (Supra) held in para 7,8,9,10 as under: "7. However, the contention being taken by the learned counsel is untenable. For the issue that was before the Income-tax Appellate Tribunal, was a limited one, namely whether for the purpose of section 80P(2)(d) of the Act, a co-operative bank should be considered as a co-operative society or not? For, if a co-operative bank is considered to be a co-operative society, then any interest earned by the co-operative society from a co-operative bank would neces....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erative Society (Supra), held in Para 5.2, 5.3 and 5.4 as under: "5.2 The provisions of section 80P(2)(d) of the Act reflects "Co-operative Society" but not the "Co-Operative Bank" therefore question emerge "whether income earned by way of interest or dividend from the investments made with any other Cooperative Bank is allowable as deduction under section 80P(2)(d) of the Act, or not. 5.3 The Honble Co-ordinate Benches of the Tribunal in various cases including in Belgaum Coal and Coke Consumer Co-operative Association Ltd. Vs. ITO in ITA No. 102/PAN/2018 decided on 06.04.2022, Nawbharat Darpan Co-operative Credit Society Ltd. Vs. CIT in ITA No. 5288 and 5289/Mum/2018 decided on 25.11.2021, Borivali Jan Kalyan Sahkari Patpedhi Ltd. Vs. ITO in ITA No. 5230/Mum/2019 decided on 30.03.2021 and in the case of Pathare Prabhu Co-operative Housing Society Ltd. Vs. ITO in ITA No. 1346 & 1347/(MUM) of 2023 decided on 27.07.2023 (2023) 153 taxmann.com 714 (Mum. Trib.) dealt with identical issue "as to whether the interest/dividend income earned from Co-operative Bank is allowable as deduction under section 80P(2)(d) of the Act or not" and ultimately allowed the deduction claimed as inter....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Maharashtra Co-operative Societies Act and earned Interest, which was claimed as a deduction under section 80P(2)(d) of the Act. The AO denied the deduction under section 80P(2Xd) of the Act on the basis that the Cooperative Bank is covered under the provisions of section 80P(4) of the Act. We find that the Hon'ble Supreme Court in Mavilayi Service Co-operative Bank Ltd. v. CIT [2021] 123 taxmann.com 161/279 Taxman 75/431 ITR 1 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 Cooperative Banks that function at par with other commercial banks i.e. which lend money to members of the public. Thus, we are of the considered view that section 80P(4) of the Act is of relevance only in a case where the assessee, who is a Co-operative Bank, claims a deduction under section 80P of the Act which is not the facts of the present case. Therefore, we find no m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ld be duly available. We may herein observe that the term 'co-operative society had been defined under sec. 2(19) of the Act, as under:- (19) "Co-operative society" means a cooperative 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 of co-operative societies; We are of the considered view, that though the co-operative bank pursuant to the insertion of Sub-section (4) of sec. 80P would no more be entitled for claim of deduction under sec. 80P of the Act, but however, as a co-operative bank continues to be a co-operative society registered under the Cooperative Societies Act, 1912 (2 of 1912), or under any other law for the time being enforced in any state for the registration of co-operative societies, therefore, the interest income derived by a co-operative society from its investments held with a co- operative bank, would be entitled for claim of deduction under sec.80P(2)(d) of the Act." 13. We find that the learned CIT(A) has placed reliance upon the decision of the Hon'ble Karnataka High Court in Pr. CIT v. Totagars Co-operative Sales Society [2017] 83 t....