2018 (7) TMI 1566

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....T, B.K. Circle, Palanpur with the following grounds:- 1. The learned CIT(A) erred in law and on the facts of the case in confirming the order u/s.143(3) the Act of the A.O. who has computed the income at Rs. 23,23,030/- as against NIL income of the assessee. 2. The learned CIT(A) has without considering the merit of the case dismissed the appeal of the appellant and has not given relief on account of addition made by the A.O. in respect of the deduction of Rs. 22,52,868/- and Rs. 4,44,200/- being interest and dividend income respectively received from Banas co.operative bank and which was claimed the appellant up to Gross Total Income i.e. Rs. 22,51,000/- under section 80P(2)(a)(d) of the Income-tax Act, 1961. 3. ....

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....mission made by the assessee. The assessee further submitted before the AO that the payer i.e. Banas Co-operative Bank and the payee being the assessee, both are Co-operative Societies, hence, the deduction of interest and dividend of Rs. 26,97,068/- is deductible u/s.80P(2)(d) of the Act even after the amendment of the provision on 01.04.2007. However, the Assessing Officer was not satisfied with the contention made by the assessee in its reply dated 27.01.2014. Since the Banaskantha Dist.Central Co-operative Bank Ltd. is a Cooperative Bank, the assessee, according to the AO is not entitled to deduction u/s.80P(2)(a)(i) & 80P(2)(d) and added Rs. 23,23,034/- to the total income of the assessee. 4. In appeal, the Ld.CIT(A) confirmed the o....

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....upport of his argument, that the Banaskantha Dist.Central Co-operative Bank Ltd. is a Co-operative Society, the Ld. AR has submitted the Certificate of Registration dated 20.08.1959 before us which is claimed to have been submitted before the Ld. CIT(A). He further added that the case of the assessee is covered by a common decision dated 23.03.2018 passed by the Coordinate Bench of this Tribunal in ITA Nos.1891/Ahd/2014, 2987/Ahd/2015, 1090/Ahd/2015 & 1582/Ahd/2015 where the assessee's interest income derived from the said Banaskantha Dist.Central Co-operative Bank Ltd. has been made eligible for deduction even after the insertion of sub-section 4 in Section 80P upon amendment w.e.f. 01.04.2007. 6. On the other hand, the Ld. DR relies up....

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.... ITR 1 (SC). The Citizen Co-operative Society Ltd. vs. ACIT settling Section 80P deduction issue in respect of ordinary and nominal members. We however find that the above former decision goes contrary to hon'ble jurisdictional high court's judgment in Tax Appeal No. 473 of 2014 CIT vs. Sabarkantha District Cooperative Milk Producers Union Ltd. declining Revenue's identical question of law challenging tribunal's decision allowing Section 80P deduction in respect of interest earned on fixed deposits with a cooperative bank in assessment year 2009-10 i.e. post Section 80P(4) amendment w.e.f. 01.04.2007. Their lordships' reasoning to this effect reads as under: "4.0. Now, so far as proposed question no. B i.e. whether the Appellate Tr....