TaxTMI 
TaxTMI 
2021 (10) TMI 566
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....ies, facts and circumstances of the case. 2. The learned CIT[A] is not justified in upholding the denial of deduction claimed u/s.8OP[2][a][i] of the Act amounting to Rs. 32,32,522/- in respect of the profits earned by the appellant from the business of providing credit facilities to its members under the facts and in the circumstances of the appellant's case. 3. The learned CIT[A] erred in holding that the business of providing credit facilities to the members carried on by the appellant cannot be regarded as a business carried on by a co-operative society complying with the principles of mutuality since the appellant had admitted nominal and associate members, who could neither vote nor were entitled to a share in th....
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....;s case. 6. The learned CIT[A] ought not to have upheld the assessment of income earned by the appellant from investments made in South Canara District Co-op. Bank to the extent of Rs. 34,72,751/ - under the head "Other Sources" as against the claim of the appellant that the said interest income formed part of the income from business of providing credit facilities to the members and thus, was entitled to deduction u/s. 80P [2][a][i] of the Act following the judgement of the Hon'ble Karnataka High Court in the case of TUMKUR MERCHANTS SOUHARDA CREDIT CO-OPERATIVE LTD reported in [2015] 230 Taxman 309 [Kar] under the facts and in the circumstances of the appellant's case. 7. The learned CIT[A] ought to have apprecia....
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....d also order for the refund of the institution fees as part of the costs." 3. The brief facts of the case are as follows: The assessee is a primary agricultural credit society registered under the Karnataka Co-operative Societies Act, 1959. It is engaged in the business of providing credit facilities to its members. For the assessment year 2016-2017, the return of income was filed on 13.10.2016 declaring total income of Rs. 97,720, after claiming deduction of Rs. 31,32,522 u/s 80P(2) of the I.T.Act. The assessment was selected for scrutiny. The Assessing Officer disallowed the claim of deduction u/s 80P(2) of the I.T.Act. The Assessing Officer held that the assessee has violated the principles of mutuality by placing reliance on the j....
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....on identical issue, the Bangalore Bench of the Tribunal in the case of M/s.Ravindra Multipurpose Co-operative Society Ltd. v. ITO in ITA No.1262/Bang/2019 (order dated 31.08.2021) by following the judgment of the Hon'ble Apex Court in the case of M/s.Mavilayi Service Co-operative Bank Ltd. v. CIT reported in 431 ITR 1 (SC) restored the claim of deduction u/s 80P(2)( of the I.T.Act to the files of the A.O. for fresh consideration. 6. The learned Standing Counsel strongly supported the orders of the Income Tax Authorities. 7. I have heard rival submissions and perused the material on record. The Division Bench of the Tribunal in the case of M/s.Ravindra Multipurpose Co-operative Society Limited v. ITO (supra) had remanded the identical ....
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....egards the claim of deduction u/s 80P(2)(d) of the I.T.Act, the CIT(A) has not adjudicated the same for the reason that the assessee has violated the principle of mutuality. If the assessee receives / earns interest / dividend income out of investments with co-operative society, the same is entitled to deduction u/s 80P(2)(d) of the I.T.Act. With these observations, we direct the A.O. to examine the claim of deduction u/s 80P(2)(d) of the I.T.Act, afresh. 7.3 Insofar as ground No.8 is concerned, I find an identical issue was considered by the Hon'ble jurisdictional High Court in the case of Totgars Co-operative Sales Society Ltd. v. ITO reported in [2015] 58 Taxmann.com 35 (Karnataka) (judgment dated 25.03.2015). The relevant findings of....
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....cost and expenditure incurred and administrative expenses incurred by the assessee. 13. Accordingly, we answer the question of law and hold that the Tribunal was not right in coming to the conclusion that the interest earned by the appellant is an income from other sources without allowing deduction in respect of the proportionate costs, administrative expenses incurred in respect of such deposits." 7.4 The assessee has not raised the plea before the Income Tax Authorities that it has to be given deduction u/s 57 of the I.T.Act, in respect of expenditure for earning the interest income. However, inspite of such plea not being raised before the lower authorities, I am of the view that since the fundamental principle under Income-....