2015 (7) TMI 738

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....the Income Tax Act, 1961 is allowable only on net receipts after deducting the expenses from the gross receipts of interest and that the Assessing Officer has rightly disallowed the deduction u/s.80P(2)(d) on prorata basis. 3. The facts of the case are that the assessee was engaged in banking business and trading in civil supply goods and according a report under section 44AB has been filed. The assessee in computation statement filed during the assessment proceedings has claimed an amount of Rs. 52,50,233/- has deduction u/s.80P(2)(d) of the Act. In the profit and loss account the assessee has credited Rs. 58,90,987/- under the head miscellaneous income. The assessee has claimed the following amount as deduction u/s.80P(2)(d) of the Act. ....

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.... Total interest paid = 1,48,56,731/-  = 8.2% Total deposits          18,12,36,716/- Thus, the cost of the funds invested by the assessee with Salem District Central Co-opratie bank and other co-opeatie society works out to Rs. 4,76,78,582 * 8.2% = Rs. 39,09,644/-. The net income from investment with SDDCB and other co-operative societies is Rs. 52,50,233/- - Rs. 39,09,644/- = Rs. 13,50,589/-. The Assessing Officer computed the qualifying amount eligible for 80P(2)(d) deduction is Rs. 13,40,589/-. Aggrieved the assessee preferred an appeal before the Commissioner of Income Tax (Appeals). 4. On appeal, the Commissioner of Income Tax (Appeals) followed the earlier order of the Tribunal Chennai B....

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....ct, 1983, governing the assessee-society, it is evident from the definition of 'member' u/s 2(16) that the same includes an 'associate member' u/s 2(6) appended therein. In other words, the 'nominal' members also enjoy statutory recognition as per the Act. The net result is that once the 'nominal' members or non-voting members are themselves included in the definition of 'members', they satisfy the relevant condition imposed by the legislature u/s 80P(2)(a)(i). We make it clear that we are dealing with a deduction provision to be interpreted liberally. In our considered opinion, the objections of the Revenue that the 'members' defined in sub-clause(i) of section 80P(2) should only include voting members would amount to a classification with....

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....operative Bank Ltd. [2009] 309 ITR 106 (HP), the Hon'ble Himachal Pradesh High Court has considered section 80P(2)(d) of the Act. The interest earned by the assessee co-operative bank on fixed deposits with Himachal Pradesh State Co-operative Bank in compliance with the provisions of section 57 of the Himachal Pradesh Co-operative Societies Act, 1968, the income derived from banking business is eligible for deduction under section 80P(2)(a)(i) of the Act. Exemption is also available under section 80P(2)(d) of the Act. In the present case, the assessee is an Agricultural Producers Co-operative Marketing Society Ltd., registered under Tamilnadu Cooperative Societies Act and established for the benefit of the agricultural producers and the int....