TaxTMI 
TaxTMI 
2021 (4) TMI 372
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.... of Income Tax(A) erred in confirming the same by rejecting written submissions and several judgments cited before him. 3. The A.O has wrongly charged interest u/s 234A, B & C and wrongly initiated penalty u/s 271(1) (c)." 2. Briefly stated, the assessee a co-operative housing society had filed its return of income for A.Y. 2015-16 on 28.09.2015, declaring an income of Rs. 25,42,220/-. The return of income filed by the assessee was processed as such under Sec. 143(1) of the Act. Subsequently, the case of the assessee was selected for scrutiny assessment under Sec. 143(2) of the Act. 3. During the course of the assessment proceedings it was observed by the A.O that the assessee had claimed deduction under Sec. 80P of Rs. 19,36,997/-. As per the details furnished by the assessee, it was noticed by the A.O that the aforesaid claim of deduction was raised by the assessee w.r.t the interest income that was earned by it from its investments held with cooperative banks. Observing that the deduction under Sec. 80P(2)(d) was only as regards the interest and dividend income earned by a co-operative society from its investments with another co-operative society, the A.O was of ....
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....e investments held with the co-operative bank was liable to be drawn. 6. Per contra, the ld. Departmental Representative (for short 'D.R') relied on the order of the lower authorities. 7. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. As observed by us hereinabove, the solitary issue for which our indulgence has been sought by the assessee by preferring the present appeal is as to whether or not the interest income earned by a co-operative housing society on its investments lying with a cooperative bank would be eligible for deduction under Sec. 80P(2)(d) of the Act. As pointed out by the ld. A.R, and rightly so, the issue herein involved is squarely covered by the orders of the various benches of the Tribunal. We find, that the ITAT, Mumbai, in the case of Kaliandas Udyog Bhavan Premises Co-operative Society Ltd. Vs. ITO-21(2)(1), Mumbai, ITA No.6547/Mum/2017, dated 25.04.2018 had concluded that a co-operative society would duly be entitled for claim....
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....f the assessee. (2). The sums referred to in sub-section (1) shall be the following, namely :- (a)............................................................................................ (b)............................................................................................ (c)............................................................................................ (d) in respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other co-operative society, the whole of such income;" Thus, from a perusal of the aforesaid Sec. 80P(2)(d) it can safely be gathered that income by way of interest income derived by an assessee co-operative society from its investments held with any other cooperative society, shall be deducted in computing the total income of the assessee. We may herein observe, that what is relevant for claim of deduction under Sec. 80P(2)(d) is that the interest income should have been derived from the investments made by the assessee co-operative society with any other cooperative society. We though are in agreement with the observations of ....
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.... (i) Land and Cooperative Housing Society Ltd. Vs. ITO (2017) 46 CCH 52 (Mum) (ii) M/s C. Green Cooperative Housing and Society Ltd. Vs. ITO-21(3)(2), Mumbai (ITA No. 1343/Mum/2017, dated 31.03.2017 (iii) Marvwanjee Cama Park Cooperative Housing Society Ltd. Vs. ITO-Range-20(2)(2), Mumbai (ITA No. 6139/Mum/2014, dated 27.09.2017. We further find that the Hon'ble High Court of Karnataka in the case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Cooperative Sale Society (2017) 392 ITR 74 (Karn) and Hon'ble High Court of Gujarat in the case of State Bank Of India Vs. CIT (2016) 389 ITR 578 (Guj), had also held that the interest income earned by the assessee on its investments held with a co-operative bank would be eligible for claim of deduction under Sec. 80P(2)(d) of the Act. Still further, we find that the CBDT Circular No. 14, dated 28.12.2006, as had been relied upon by the ld. A.R, also makes it clear beyond any scope of doubt, that the purpose behind enactment of sub-section (4) of Sec. 80P was to provide that the co-operative banks which are functioning at par with other banks would no more be entitled for claim of deduction under Sec. 8....