TaxTMI 
TaxTMI 
2021 (5) TMI 511
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.... assessee submitted that the assessee is a Co-operative Credit Society. During the period relevant to the assessment year under appeal the assessee inter-alia earned interest income of Rs. 2,82,923/- from Co-operative Banks and claimed the same as deduction under section 80P(2)(d) of the Income Tax Act, 1961 (in short 'the Act'). Admittedly, the assessee in its return of income had not disclosed the aforesaid amount of interest income. However, the said income was duly reflected in the accounts of assessee. The assessee filed revised computation of income claiming deduction u/s. 80P(2)(d) of the Act. The Assessing Officer in assessment proceedings denied the benefit of Section 80P(2)(d) of the Act and added back interest received from Co-operative Banks. Aggrieved by the assessment order dated 29/02/2016 the assessee filed appeal before the CIT(A). The CIT(A) without appreciating the facts on record rejected the contentions of the assessee and confirmed the addition, hence, the present appeal by the assessee. The ld. Authorized Representative of the assessee submitted that the assessee had invested surplus funds with Maharashtra District Credit cooperative Bank and Jan Kalyan Sah....
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....efit of deduction u/s. 80P(2)(d) of the Act. The coordinate Bench of the Tribunal in the case of Kaliandas Udyog Bhavan Premises Co-op Society Ltd. Vs. ITO, 94 taxmann.com 15 (Mumbai) after considering various decisions by Hon'ble High Courts and the Tribunal and the provisions of the Act, has held that interest income derived by a cooperative society from investments with a co-operative bank, would be entitled for deduction under section 80P(2)(d) of the Act. The relevant extract of the order reads as under: - "7. We have deliberated at length on the issue under consideration and are unable to persuade ourselves to be in agreement with the view taken by the lower authorities. Before proceeding further, we may herein reproduce the relevant extract of the said statutory provision, viz. Sec. 80P(2)(d), as the same would have a strong bearing on the adjudication of the issue before us: "80P(2)(d) (1) 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 computin....
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....of the Act, but however, as a co-operative bank continues to be a cooperative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being enforced in any state for the registration of co-operative societies, therefore, the interest income derived by a cooperative society from its investments held with a co-operative bank, would be entitled for claim of deduction under Sec.80P(2)(d) of the Act." [Emphasised by us] 7. The Pune Bench of Tribunal in the case of Majalgaon Sahakari Sakhar Karkhana Ltd. vs. ACIT [2019] 105 taxmann.com 100 (Pune - Trib.) has taken a similar view in respect of interest and dividend income derived from investment with cooperative bank. The relevant extract of the findings of the Tribunal are as under: - "24. In some of the appeals the issue of deduction under section 80P of the Act on interest and dividend income is also involved. The assessee claimed deduction u/s.80P(2)(d) of the Act on interest and dividend received from Co-operative Society on Savings Bank accounts. The AO did not allow such deduction. The ld. CIT(A) overturned the assessment order on this point and granted deduction. The Reve....
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....ujarat High court in the case of Surat Vankar Sahakari Sangh Ltd. vs. ACIT, 421 ITR 134. 9. However, on the same issue Hon'ble Karnataka High court in the case of PCIT vs. Totagars, Co-operative Sale Society 395 ITR 611 (Karnataka) has taken a contrary view holding that interest income earned from deposit with the cooperative bank does not qualify for deduction under section 80P(2)(d) of the Act. It would be relevant to mention here that the Hon'ble High Court while rendering the later judgement has not considered the earlier decision rendered in the case of Totagars, Co-operative Sale Society (supra). 10. No judgement by the Hon'ble Jurisdictional High Court on this issue was brought to our notice. The Hon'ble Bombay High Court in the case of K. Subramanian vs. Siemens India Ltd. 156 ITR 11 has held that when two conflicting decisions of non-jurisdictional High Courts are available, the view that favours the assessee is to be preferred. Accordingly, following the decision of Hon'ble Karnataka High Court in the case of Totagars Co-operative Sale Society (supra) and the decision in the case of Hon'ble Gujarat High Court in the case of Vankar Sahakari Sangh (sup....