TaxTMI 
TaxTMI 
2015 (7) TMI 738
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.... the fact that deduction u/s.80P(2)(d) of 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 am....
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....tal funds is 76% 3.1 Thus, out of Rs. 6,27,34,976/- invested in Salem District Central Co-operative bank 76% i.e. Rs. 4,76,78,582/- was the prorate investment made out of interest bearing funds. 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 R....
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.... 'A' class members who have voting rights and dividend claim, and also that the latter members are jointly and severely liable. In this backdrop, when we peruse the relevant provisions of the State Co-operative Societies Act, 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 provisio....
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.... from investment with the Bank is not entitled for deduction under section 80P(2)(d) of the Act. On appeal, the ld. CIT(Appeals confirmed the order passed by the ld. CIT(Appeals). We find that in the case of CIT v. Kangra Co-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. I....