2017 (12) TMI 1639

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....decision of Ld CIT(A) in holding that the interest received by the assessee from co-operative banks is deductible u/s 80P(2)(d) of the Act. 2. The assessee is a co-operative housing society. It earned interest on deposits kept with Co-operative banks and claimed the interest income as exempt u/s 80P(2)(d) of the Act. Sec. 80P(2)(d) provides that the interest income or dividend derived by a co-operative society from its investments with any other co-operative society is deductible u/s 80P of the Act. The assessee took the view that the co-operative banks are basically co-operative societies and interest received from them qualifies for deduction u/s 80P(2)(d) of the Act. Accordingly it claimed deduction. 3. The AO took the view that th....

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....ith co-operative bank. 6. On the contrary, the Ld A.R submitted that the fact that the cooperative banks are basically co-operative societies only cannot be denied. He submitted that the Hon'ble High Court of Himachal Pradesh has taken the view in the case of CIT Vs. Kangra Co-operative bank Ltd (2009)(309 ITR 106) that co- operative banks are cooperative societies and hence the interest income from investments made in any co-operative society would be entitled for deduction u/s 80P(2)(d) of the Act. He submitted identical claim made in respect of interest income earned from co-operative banks has been allowed by the SMC bench in the case of Murude Sahakari Parsanstha Maryadid (ITA No.1058/Mum/2017 dated 21-08-2017) and by the division b....

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.... Court in the case of Kangra co-operative bank Ltd (supra), wherein the High Court has observed as under:- "....Furthermore, the investments have been made in H.P. State Cooperative Bank which is also a co-operative society and therefore even under sec. 80P(2)(d) of the Act, interest income from investments made in any co-operative society would also be entitled for deduction." 10. Thus, I notice that there are divergent views on this matter. The Hon'ble Karnataka High Court has expressed the view that the deduction u/s 80P(2)(d) would not be available in respect of interest income received from co-operative bank, whereas the Hon'ble Himachal Pradesh High Court has held that the said deduction would be available. The Hon'ble Sup....