2021 (12) TMI 405

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.... addition of Rs. 16,80,845/-. 3. The brief facts of the case are that the assessee is a Co-operative Society and engaged in the business of providing credit facilities to its Members. It has filed its return of income on 12.10.2016 declaring total income of Rs. Nil, after claiming deduction under Section 80P of the Act of Rs. 20,76,367/-. The case of the assessee was selected for scrutiny assessment and a notice under Section 143(2) of the Act was issued and served upon the assessee. On scrutiny of the accounts, it revealed to the Assessing Officer that the assessee has interest income of Rs. 23,48,749/-. The Assessing Officer was of the view that the interest income earned from deposits with the banks does not qualify for the grant of d....

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....ank of India Vs. CIT is not applicable as the appellant has claimed the deduction u/s. 80P(2)(a)(i) of the I.T. Act and not u/s. 80P(2)(d) of the I.T. Act, 1961. 2.5. I do not agree with the submission made by the appellant, as appellant in the computation of income has itself stated that deduction has been claimed u/s. 80P(2)(a)(i) and 80P(2)(d) of the I.T. Act, 1961. Further, the jurisdictional High Court in the case of State Bank of India Vs. CIT after considering all the decisions including the case of CIT Vs. Jafari Momin Vikas Co.op. Credit Society relied by appellant has held that interest income earned from nationalized banks is not eligible for deduction u/s. 80P. The Honorable High Court has discussed the provision of sec....

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....assessee is entitled for deduction even on the interest income earned from the nationalized bank. 7. I have duly considered the rival contentions and gone through the record carefully. Perusal of the order of learned CIT(A) would indicate that it is in consonance with the proposition laid down by the Hon'ble Gujarat High Court in the case of State Bank of India Vs. CIT (supra). Now coming to the case law cited by the learned Counsel for the assessee, in the case of Mavilayi Service Co-operative Bank Ltd. v. CIT (123 taxmann.com 161) by the Hon'ble Supreme Court of India wherein, the primary agricultural credit societies were held to be entitled to the benefit of the deduction contained in Section 80P(2)(a)(i) of the Act, notwithstand....