TaxTMI 
TaxTMI 
2022 (1) TMI 1090
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.... of the Act. 2. On the facts and circumstances of the case as well as law on the subject, the learned Pr. Commissioner of Income-tax has erred in holding that assessee is not eligible to claim deduction under section 80(P)(2)(d) of .I.T Act on interest income of Rs. 48,01,477/- from cooperative bank. 3. On the facts and circumstances of the case as well as law on the subject, even otherwise also revisionary order u/s 263 of the act cannot be passed as the assessment order is subject matter of appeal before ld.Commissioner of Income tax (Appeals)." 2. Brief facts of the case are that the assessee is a Co-operative Society, engaged in the business of providing credit facility to its members. The assessment for the Assessment Year 2014-15 was completed under section 143(3) of the Act on 1306.2016. The AO while passing the assessment order examined the various issues and made addition of Rs. 66,72,837/- on account of interest earned from Nationalised Bank. The assessment order was revised by the learned Principal Commissioner of Income Tax (PCIT) by exercising his power under section 263 of Income Tax Act (Act). Before revising assessment order, the ld PCIT issued show cause notic....
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....Hon'ble Karnataka High Court in CIT vs. Totagars Co-operative sale society (supra) ld PCIT held that Cooperative Bank and Cooperative Society are two different entities. So, interest earned by society by investment of the surplus with any institution other than Co-operative Society is required to be disallowed and added. The interest income earned on deposit with Surat Cooperative Bank and DGVCL was liable to be added back to the head income from other sources. The ld. PCIT held that the assessment order passed by the AO on 30.06.2016 is erroneous in so far as prejudicial to the interest of the revenue. The assessment order was set-aside by ld PCIT and the AO was directed to pass the assessment order afresh after giving adequate opportunity to the assessee. Aggrieved by the order of ld. PCIT, the assessee has filed present appeal before this Tribunal. 5. We have heard the submission of the ld. Authorised Representative (ld.AR) of the assessee and ld. Commissioner of Income -Tax (CIT-DR) for the Revenue and have gone through the orders of authorities below. At the outset of hearing, the ld.AR of the assessee submits that the grounds of appeal raised by the assessee is squarely cove....
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.... the parties and estimated the order of Lower Authorities carefully. We notice that in the show cause notice, the ld. PCIT identified interest income; (i) interest income earned on deposit with DGVCL and (ii) interest earned from Surat Cooperative Bank. During the hearing of submission, the ld.AR of the assessee fairly conceded that the interest earned on such deposit with DGVCL may not be eligible for deduction under section 80P(2)(d) of the Act. Therefore, the order of ld PCIT is upheld to that extent. 10. So far as other interest of Rs. 48,01,477/- earned on deposit with Surat District Co-operative bank, is concerned, we find that deduction claimed qua this interest income is eligible for deduction under section 80P(2)(d) of the Act in view of the decision of this Bench in Bardoli Vibhag Gram Vikas Co.Op. Credit Society Ltd., wherein this combination has passed the following order: "11. We have considered the rival submission of both the parties. We have also deliberated on the written submission filed by learned AR of the assessee and various case laws relied by him during his submission. We have also gone through the various documentary evidences filed in the form of paper ....
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....n'ble Jurisdictional High Court in Surat Vankar Sahakari Sangh Ltd., vs. ACIT [2016] 72 taxmann.com 169 (Guj) held that assessee co-operative society is eligible for deduction under section 80P(2)(d) in respect of gross interest received from co-operative bank without adjusting interest paid to said bank. 16. The Co-ordinate Bench of Rajkot Tribunal in Surendarnagar District Cooperative Milk Producer Union Ltd., vs. DCIT [2019] 111 taxmann.com 69 (Rajkot Tribunal) also held the assessee co-operative society could not claim benefit under section 80P(2)(d) in respect of interest earned by it from deposits made with nationalized/private banks, however, the said benefit was available in respect of interest earned and on deposits made with co-operative bank. Thus, in view of the aforesaid legal discussion we are of the considered view that order passed by Assessing Officer is not erroneous, though it may be prejudicial to the interest of the Revenue. Therefore, the twin conditions that orders is erroneous and so far as prejudicial to the interest of revenue, as prescribed under section 263 is not fulfilled in the present case. 17. Moreover, we have seen that in assessee's own ca....