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TaxTMI 
TaxTMI 
TaxTMI 
2020 (9) TMI 964
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....to its members. A return was filed declaring Nil income. Assessment u/s 143(3) of the Act was completed determining total income at Rs. 89,700/-. The ld. Pr CIT observed from the records that the assessee society earned a sum of Rs. 22,34,270/- as interest on investments made with co-operative banks and claimed deduction u/s.80P(2) of the Act on the same. It was opined that such deduction was not available in respect of interest received from investments made with co-operative banks. In addition, the ld. Pr.CIT also noted that the assessee received a sum of Rs. 2,334/- as interest on income-tax refund u/s.244A of the Act, which was not disclosed in the return. When confronted, the assessee submitted on the first issue that it had claimed ....
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....erative banks also does not qualify for deduction. This evidences that the availability of deduction u/s 80P(2) on the remaining amount of interest earned from the members etc., has also been accepted by the ld. Pr.CIT. 4. The short point of view of the ld. Pr.CIT is that interest earned from co-operative banks cannot be covered under clause (d) of sub-clause (2) of section 80P. Section 80P(1) provides that: `Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee.' Sub-section (2) op....
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....duction. The assessee is admittedly a co-operative society engaged in carrying on the business of providing credit facilities to its members. In such a situation, the whole of the amount of profits and gains of business attributable to providing credit facilities to its members becomes deductible u/s 80P(2) of the Act. 6. The term "profits and gains of business attributable to" providing credit facilities has a wider connotation. It encompasses not only the income derived strictly from providing credit facilities to its members but also any other income which is attributable to such business. So long as there exists a live link, not necessarily direct, between the income and carrying on of the business of providing credit facilities, the r....
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....note that we are dealing with a case in which the ld. Pr. CIT has invoked his power u/s.263 of the Act. It is trite that the exercise of such a power is ousted in case of a debatable issue. An assessment order can be termed as erroneous and prejudicial to the interest of the Revenue if the AO has taken a view which is not legally sustainable. Per contra, if two views are available on a particular issue and the AO adopts one of such possible views, the case goes outside the purview of revisional power to be exercised by the Pr.CIT u/s.263 of the Act. 9. The Pune Benches of the Tribunal in Sureshdada Jain Nagari Sahakari Patsanstha Maryadit Vs. The Pr.CIT (ITA No.713/PUN/2016) decided the question of availability of deduction u/s 80P on inte....
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.... activity of marketing agricultural produce by its members; accepting deposits from its members and providing credit facility to its members; running stores, rice mills, live stocks, van section, medical shops, lodging, plying and hiring of goods and carriage etc. It was in that background of the facts that the Hon'ble High Court held that the assessee could not claim deduction u/s.80P(2)(d) of the Act. When we consider the impact of this decision, it turns out that the same is not germane to case under consideration in view of the position that the claim of the instant assessee is directly about the eligibility of deduction u/s.80P(2)(a)(i) of the Act and not u/s.80P(2)(d). Moreover, so many decisions relied on by the ld. AR amply go to pr....