TaxTMI 
TaxTMI 
2015 (2) TMI 281
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....redit Co-operative society. This issue arises from Ground Nos. 1 to 3. The briefly stated facts are as under. The assessee society is a Cooperative Credit Society registered under Maharashtra Co-operative Societies Act, 1960. The main object of the assessee society is to provide credit facility to its members. The assessee filed the return of income for the A.Y. 2010-11 which was selected for scrutiny. It was noticed by the Assessing Officer that the assessee has earned interest income on the savings bank account amounting to Rs. 13,10,407/-. The Assessing Officer declined to allow benefit of deduction u/s. Sec. 80P(2)(a)(i) of the Income-tax Act treating the said interest income as a borrowing part of its business activities. The assessee alternatively pleaded for allowing the deduction to the assessee u/s. 80P(2)(d) of the Income-tax Act but the said alternate plea was also rejected. The Assessing Officer relied on the decision of the Hon'ble Supreme Court in the case of Totgar's Cooperative Sale Society Vs. ITO 322 ITR 283 (SC). The assessee challenged the action of the Assessing Officer before the Ld. CIT(A) but without successes. Now, the assessee is in appeal before us. ....
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....(2)(d) of the Act. Accordingly, this issue is decide in favour of the assessee. 5. The next issue is the dividend income of Rs. 11,630/- which is received on the shares of Sindhudurg District Central Co-operative Bank Ltd. Sec. 80P(2)(d) speaks about the interest as well as the dividend. For the reasons giving for allowing the interest income from Sindhudurg District Central Co-operative Bank Ltd., we also allow the dividend income as a deduction u/s. 80P(2)(d) of the Act and this issue is also decided in favour of the assessee. We further find that this issue stands squarely covered in favour of the assessee by the decision of the ITAT, A Bench in the case of Sindhudurg Zilla Madhyamik Adhyapak Sahakari patpedhi Maryadit, Sindhudurg Vs. ITO, Ward-2(4), Kudal ITA No. 1825/PN/2013. The operative part of the said decision is as under: 7. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. The Ist dispute in the grounds of appeal is regarding the allowability of deduction u/s.80P(2)(d) in respect ....
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.... sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in subsection (2), in computing the total income of the assessee. 80P(2): The sums referred to in sub-section (1) shall be the following, namely: (a) ........... (b) ........... (c) 2(d): In respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other co-operative society, the whole of such income; 5. Sub-sec. (4) of Sec. SOP has withdrawn the deduction to the co operative bank other than primary agricultural credit society or a primary co-operative agricultural and rural development bank w.e.f. the A.Y. 2007-08. The said provision is applicable to the Aurangabad District Central Co-operative Bank (ADCCB) in which the assessee society has kept deposit. The withdrawal of deduction by insertion of Subsection (4) of Sec. SOP does not change "status" of Aurangabad District Central Co-operative Bank "as a cooperative society which is contemplated in Sec. 80P(1) of the Act. We, therefore, hold that the interest received on the deposit with the Aurangabad District Central Co-operat....
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..../- and said interest is earned on the deposits and the saving bank account with Sindhudurg District Central Co-operative Bank Ltd. (SDCCL). It is a contention of the assessee that the said interest income is allowable as a deduction u/s. 80P(2)(d) of the Incometax Act. Both the authorities below declined to consider the claim of the assessee. Now, the assessee is in appeal before us. 7. We have heard the parties and perused the record. The identical issue has been decided here-in-above in the case of Veejmandal's Workers Federation Sahakari Patsanstha Maryadit, Sindhudurg being ITA No. 29/PN/2014. Following the reasons in the said case for allowing the claim of the assessee, in this case also we hold that the interest income of Rs. 7,55,687/- (Rs.7,54,826/- + Rs. 803/-) is to be allowed as a deduction u/s. 80P(2)(d) of the Income-tax Act. Accordingly, the relevant grounds taken by the assessee are allowed. 8. The next issue is dividend income of Rs. 1,12,503/- earned on the shares of Sindhudurg District Central Co-operative Bank Ltd. The identical issue has been decided in this batch of appeals in the case of Veejmandal's Workers Federation Sahakari Patsanstha Maryadit, Sindh....