TaxTMI 
TaxTMI 
2016 (1) TMI 1235
X X X X Extracts X X X X
X X X X Extracts X X X X
....d CIT(A) is correct in not following the judgment of the Hon'ble Supreme Court in the assessee's own case in Civil Appeal No.162 of 2010 (reported in 322 ITR 283(SC)/2010 dated 08.02.2010. 4. Any other ground that may be taken during the appeal. 5. The appellant craves leave to add, alter, amend and delete any of the grounds of leave." 3. The assessee is a co-operative credit society providing credit facilities to its members and markets the agricultural products of its members, runs a Kirana section, Rice Mills, Van section, Medical shop, Arecanut trading section, lodging in name of Samrat Hotels in Sirsi and also involved in plying and hiring of goods carriage. The assessee filed its return of income after claiming deduction u/s 80P of Rs. 4,09,34,404/- along with the deduction u/s 10(34) of the Act towards dividends received from mutual funds. The AO, while completing the assessment u/s 143(3) r.w.s 147, has disallowed the claim of deduction u/s 80P(2)(d) to the extent of Rs. 3,34,970/- on the ground that the said amount of income earned by the assessee in the form of interest from deposits in the banks and therefore, it is to be brought to tax under the head 'other sour....
X X X X Extracts X X X X
X X X X Extracts X X X X
....upreme court has decided this issue against the assessee. He has relied upon the order of the AO. 6. On the other hand, learned authorized representative of the assessee has submitted that the issue before the Hon'ble Supreme Court was allowability of deduction under section 80P(2)(a)(i) and not under section 80P(2)(d). He has referred to para.3 of the judgment of Hon'ble Supreme Court and submitted that the substantial question of law which arises for consideration of their lordships was whether such interest income would qualify for deduction as business income under section 80P(2)(a)(i) of the IT Act. Therefore, the issue for the assessment years under consideration in the appeals filed by the revenue is entirely different and pertains to the deduction u/s 80P(2)(d). He has referred the assessment order and submitted that that the AO has not understood the facts as the interest income in question. Thus the learned authorized representative of the assessee has submitted that the issue involved in these appeals of the revenue is quite different from the issue before the Hon'ble Supreme Court in 322 ITR 283. He has further submitted that an identical issue has been considered by t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lowing the decision of the co-ordinate benches of this Tribunal, at page 25 to 27 of the impugned order as under: "The Hon'ble ITAT, Bangalore, Bench 'A' in the case of ITO, W-9(3), Bangalore Vs. M/s. Yeshwanthpur Credit Cooperative Society Ltd. where it is held that "we are of the considered view that the facts, observations and findings of the Tribunal in the case of M/s. Bangalore Commercial Transport Credit Cooperative Society Ltd. (supra) are identical with those of the instant case and that the assessee, being credit cooperative society is entitled to the deduction under section 80P(2)(a)(i) claimed by it." It is pertinent to mention here that the Hon'ble ITAT Bangalore Bench 'B', Bangalore in the case of Shri Marikamba Mahila Cooperative Credit Society Ltd. Vs. Income Tax Officer, W-1, Sirsi for AY 2009-10 vide ITA No. 617/Bang/2014 where it is held that "learned counsel for the assessee, submitted that the Tribunal in the case of Bagalkot District Central Cooperative Bank Vs. JCIT (ITA No. 1572/Bang/2013 dated 30.05.2014) had unequivocally held that it was not possible to exclude a cooperative society engaged in business of banking from being co....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... view taken by the AO that income by way of interest or dividends earned by the assessee society from the cooperative bank namely Kanara District Central Cooperative Bank which has also a cooperative society was eligible for deduction cannot be faulted' In view of the facts explained and discussed above, that assessee is registered under Karnataka Cooperative Societies Act, 1959 and assesses has not applied and obtained permission from Reserve Bank of India as a Bank, therefore, activity of the assessee cannot be equated as defined under the Banking Regulation Act and respectfully following the jurisdictional Hon'ble ITAT, Bangalore Bench 'B' in the case of Shri Marikamba Mahila Cooperative Credit Society Ltd. Vs. Income Tax Officer, W-1, Sirsi mentioned supra, the assessee is entitled to claim the deduction u/s 80P(2)(d) of the IT Act. Hence the disallowance made by the AO is dismissed and assesses this ground of appeal is allowed. 8. Thus, the CIT(A) has allowed the claim of the assessee by holding that the co-operative bank cannot be excluded from the co-operative society engaged in the business of banking for the purpose of sec.80P(2)(d). We find that the co-or....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y including a co-operative society engaged in the business of banking or in other words, a co-operative bank. A similar view has been taken by this tribunal in case of Shri Marikamba Mahila Co-operative Credit Society Ltd. (supra) in para.7 as under: "7. A co-ordinate bench of this Tribunal in the case of Bagalkot District Central Co-operative Bank (supra) had held that a Cooperative bank which is also a Cooperative Society cannot be excluded from the purview of benefits available to a Cooperative Society , unless the provisions of the Act so stipulate. No doubt in the said decision, the Tribunal was considering the application of Section 194A(3)(v) of the Act, wherein it was mandated that a Cooperative Society was not required to deduct tax at source if the interest credit were paid to any Co-operative Society. It had unequivocally held that the said provision applied to all Cooperative Societies including a Cooperative Society engaged in the business of the bank or in other words, a Co-operative Bank. Therefore, the view taken by the AO that income by way of interest or dividends earned by the assessee society from the Cooperative bank namely Kanara Dist. Central Co-operative b....