TaxTMI 
TaxTMI 
2022 (4) TMI 339
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....nand Halbhavi, CA For the Respondent : Smt. Rijula Uniyal, Sr. DR ORDER PER BENCH: The instant appeals are filed by the different assessees before the ITAT against the order of the Ld. Commissioner of Income Tax, passed u/s 250(6). 2. The following ITA Nos. are time barred appeals as ITA No. 184/PAN/2018 is delay in 26 days, ITA No. 181/PAN/2018 is delay in 32 days and 180 is delay in 31 days. The assessees prayed for condonation of delay. In all the three appeals delay are condoned and accepting for appeal hearing. 3. First we will consider the appeal No. 184/PAN/2018 for AY 2018-2019 as lead case. 4. Brief fact is that all the cooperative societies invested their surplus funds in Cooperative Bank and accordingly the interest was earned. The assessee claimed the interest as deduction u/s 80P but the Ld. AO disallowed the deduction for violation of Section 80P(2)(d) of the Income Tax Act (in brevity the Act). In relation to restriction u/s 80P(4) of the Act. The interest was added back with the total income as income amount of Rs. 857,533/- as income from other sources. The Revenue authorities had relied on the order of Hon'ble Supreme Court in the case of Totg....
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.... Definition 1 Co-operative Bank Clause (cci) of Section 5 Co-operative Bank means a State Co-operative Bank, a Central Co-operative Bank and a 2 Primary Co-operative Bank Clause (ccv) of Section 5 Primary Co-operative Bank means a Co-operative Society other than a Primary Agricultural Credit Society- (1) the primary object or principal business of which is the transaction of banking business; (2) the paid up share capital and reserves of which are not less than one lakhs of rupees; (3) the bye-laws of which do not permit admission of any other co-operative society as a members. 3 Primary Credit Society Clause (ccvi) of Section 5 Primary Co-operative Society means a Co-operative society other than a primary agricultural credit society - (1) the primary object or principal business of which is the transaction of banking business; (2) the paid up share capital and reserves of which are not less than one lakh of rupees; and (3) the bye laws of which do ....
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.... Hence, we pass the following order" b) In the case of The Commissioner of Income tax vs Gulshan Mercantile Urban Co-Operative Bank Ltd [2013] 29 taxmann.com 8 (All.) "10. The question as to whether the business is derived from or attributable to SLR or non-SLR funds would not make any difference for the purposes of qualifying the interest earned by the cooperative bank under Section 80P(2)(a)(i) as the deposits of surplus idle money available from working capital, including reserves, excess collection of interest tax and other incomes are all attributable to the business of banking. The interest from such deposits cannot be said to be beyond the legitimate business activities of the bank. 11.For the aforesaid reasons, we do not find that the Income Tax Appellate Tribunal committed any error in arriving at findings that the interest are not deposits of non-SLR funds and the cooperative bank will qualify for exemption under Section 80P(2)(a)(i) of the Act." c) In the case of Kaliandas Udyog Bhavan Memises Co-op Society Ltd. v. Income-tax Officer-21(2)(1), 6547/MUM/2017, AY 14-15 (ITAT-Mumbai), Date of Order-25/04/2018. "9. We thus in the backdrop ....
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....n his investment with a co-operative society. So the Revenue is not required to look another of investment whether it was formed as required within time or otherwise. 10.4. We have heard the considered of the case of Totagars Co-operative Sales Society Ltd. Supra which was relied by the Ld. DR and find that the Hon'ble Apex Court has dilapidated on the issue of deduction u/s 80P(2)(a)(i) but not on section 80P(2)(d). We also observed that in the case of Totagars Cooperative Sales Society Ltd, [2017] 78 taxmann.com 169 (Karnataka) itself the Hon'ble High Court of Karnataka has allowed the claim of deduction u/s 80P(2)(d) vide order dated 05.01.2017. 10.5. Considering all the judgments of the different High Courts & Tribunals we hereby hold that the investment of assessee in cooperative bank is eligible investment u/s 80P(2)(d) of the Act. The interest of the said investment related to Cooperative Society, assessee is eligible for deduction u/s 80P(2)(a)(i) of the Act. Accordingly the appeals of the assessee are allowed. 11. In the result, all the grounds of appeal of the assessee related ITA Nos. 170 & 171/PAN/2018, ITA Nos. 181, 182, 183, 184/PAN/2018, ITA Nos. 141, 115, 1....