2021 (10) TMI 778

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.... 27.11.2017 under section 143(3) of the Income-tax Act, 1961 (hereinafter 'the Act'). 2. The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of the Assessing Officer in disallowing the claim of deduction under section 80P(2)(d) of the Act for interest income received from co-operative bank. For this assessee has raised the following ground NO.1:- "1. Learned CIT Appeals erred in rejecting the appeal filed for deleting the addition of Rs.2,27,290/- under Income from other sources, being interest received from Co-op. Banks made by assessing officer which is not taxable under section 80P(2)(d) of the income tax Act, 1961." 3. None appeared on behalf of the assessee. I have heard the lea....

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....of the case. I noted that this issue is covered by the decision of ITAT, Mumbai in the case Sea Grean Co-operative Housing Society Ltd. Vs. ITO dated 31.03.2017 in ITA No.1343/MUM/2017 for AY. 2013-14, wherein it is held as under:- "5. We have carefully considered the rival submissions. The facts lie in a narrow compass, inasmuch as, the appellant is a Co-operative society, whose income , inter-alia, included interest earned on deposits with another Cooperative bank. Accordingly, such income was claimed as exempt under section 80P(2)(d) of the Act. The claim has been denied primarily on account of the fact that section 80P(2)(d) of the Act relates to the income earned from a Co-operative society. In this context, the decision of th....

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....e with other Cooperative society. For the purposes of better proper understanding of these two provisions the relevant extract of the section are reproduced below: 80P: Deduction in respect of income of co-operative Societies. 1. Where, in the case of an assesssee 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. 2. The sums referred to in sub-section (1) shall be the following, namely:- (a)In the case of a co-operative society engaged in- (i) Carrying on the business of bank....

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....tion. Now will evaluate the assessee's case in the light of the decision of the Hon'ble Supreme court. The Hon'ble Supreme Court in the case of Totagar's Co-operative Sale Society Ltd.(Supra) held that a society has surplus funds which are invested in short term deposits where the society is engaged in the business of banking or providing credit facilities to its members in that case the said income from short term deposits shall be treated and assessed as income from other sources and deduction u/s 80(P)(2)(a)(i) would not be available meaning thereby that deduction u/s 80(P)(2)(a)(i) is available only in respect of income which is assessable as business income and not as income from other sources. Whereas in distinction to this , the prov....