TaxTMI 
TaxTMI 
2022 (4) TMI 395
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....e Bank and Belgaum District central Co-operative Bank as cooperative societies. 3. The learned AO has wrongly interpreted the definition of cooperative society vide section 2(19) of the Income Tax Act, 1961 by treating those entities which are registered under the Co-operative Societies Act, 1912 ( 2 of 1912) or under any other law for the time being in force in any State for the registration of Co-operative societies, are not being cooperative societies. 4. The learned AO has erred in not allowing deduction u/s.80P(2)(e) of the Income Tax Act, 1961 without properly verifying the lease deeds and without properly interpreting the purpose for which the godowns and sheds have been let out. 5. Any other grounds which may be raised during the appeal hearing." 2. Succinctly stated, the assessee which is a co-operative society engaged in the business of trading of coke and foundry raw materials had e-filed its return of income for the assessment year 2010-11 on 23.10.2010, declaring an income of Rs. 92,520/-. Original assessment was framed by the AO vide his order passed u/s. 143(3) of the Act, dated 29.10.2012 wherein the returned income of the assessee was ....
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....ociety from cooperative banks would not be eligible for deduction u/s. 80P(2)(d) of the Act, the Assessing Officer had declined the assessee's claim for deduction on the said count. 8. On appeal the CIT(A) sustained the disallowance of the assessee's claim for deduction qua both the aforesaid two fold issues, viz. (i). claim for deduction of interest on investments with co-operative banks u/s 80P(2)(d : Rs. 3,83,047/- ; and (ii.) claim for deduction u/s 80P(2)(e) on rent that was claimed by the assessee to have been derived from the activity of letting out of industrial sheds :Rs. 7,60,350/-. 9. After having given a thoughtful consideration to the aforesaid issues in hand, we are unable to concur with the view taken by the lower authorities in so far the declining of the assessee's society claim for deduction u/s 80P(2)(d) qua the interest received on its investments with co-operative banks. In our considered view as a Cooperative bank falls within the realm of the definition of a "Co-operative Society" as contemplated in Section 2(19) of the Act, therefore, the view taken by the lower authorities that interest income received by the assessee from, viz. (i). Belgaum Industria....
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....e in the case of an assessee 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)............................................................................................ (b)............................................................................................ (c)............................................................................................ (d) in respect of any income by way of interest or dividends derived by the cooperative society from its investments with any other co-operative society, the whole of such income;" On a perusal of Sec. 80P(2)(d), it can safely be gathered that interest income derived by an assessee co-operative society from its investments held with any other co-operative society shall be deducted in computing its total income. We may herein observe, that what is relevant for clai....
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....th a co-operative bank is covered in favour of the assessee in the following cases: (i) Land and Cooperative Housing Society Ltd. Vs. ITO (2017) 46 CCH 52 (Mum) (ii) M/s C. Green Cooperative Housing and Society Ltd. Vs. ITO-21(3)(2), Mumbai (ITA No. 1343/Mum/2017, dated 31.03.2017 (iii) MarvwanjeeCama Park Cooperative Housing Society Ltd. Vs. ITO-Range- 20(2)(2), Mumbai (ITA No. 6139/Mum/2014, dated 27.09.2017. (iv). KaliandasUdyog Bhavan Pemises Co-op. Society Ltd. Vs. ITO, 21(2)(1), Mumbai We further find that the Hon'ble High Court of Karnataka in the case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Cooperative Sale Society (2017) 392 ITR 74 (Karn) and Hon'ble High Court of Gujarat in the case of State Bank Of India Vs. CIT (2016) 389 ITR 578 (Guj), had held, that the interest income earned by the assessee on its investments with a co-operative bank would be eligible for claim of deduction under Sec. 80P(2)(d) of the Act. Still further, we find that the CBDT Circular No. 14, dated 28.12.2006, also makes it clear beyond any scope of doubt that the purpose behind enactment of sub-section (4) of Sec. 80P was that the co-o....
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....ould be eligible for claim of deduction under Sec.80P(2)(d) of the Act. 9. Be that as it may, in our considered view, as the A.O while framing the assessment had taken a possible view, and therein concluded that the assessee would be entitled for claim of deduction under Sec. 80P(2)(d) on the interest income earned on its investments/deposits with co-operative banks, therefore, the Pr. CIT was in error in exercising his revisional jurisdiction u/s 263 for dislodging the same. In fact, as observed by us hereinabove, the aforesaid view taken by the A.O at the time of framing of the assessment was clearly supported by the order of the jurisdictional Tribunal in the case of Land and Cooperative Housing Society Ltd. Vs. ITO (2017) 46 CCH 52 (Mum). Accordingly, finding no justification on the part of the Pr. CIT, who in exercise of his powers under Sec. 263, had dislodged the view that was taken by the A.O as regards the eligibility of the assessee towards claim of deduction under Sec. 80P(2)(d), we "set aside‟ his order and restore the order passed by the A.O under Sec. 143(3), date 14.09.2016. 10. Resultantly, the appeal filed by the assessee is allowed." Bac....
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....rkshops and not for storage purpose etc., thus, declined its claim of deduction u/s 80P(2)(e) qua the rent received therefrom. 13. Before us the assesee has assailed the declining of its claim for deduction u/s. 80P(2)(e) of the Act. It was submitted by the Ld. Authorized Representative (for short 'AR') that the assessee's claim for deduction u/s. 80P(2)(e) of the Act had been declined by the Assessing Officer in the course of set-aside proceedings, for the reason, that the assessee could not prove on the basis of supporting documentary evidence that the letting out of industrial sheds was for the purpose of using the same as godowns or warehouses for storage or processing and facilitating the marketing of commodities as envisaged u/s. 80P(2)(e) of the Act. Rebutting the aforesaid observations of the Assessing Officer, it was submitted by the Ld. AR that the assessee had placed on record confirmations of all the tenants wherein they had categorically stated that the respective properties had been taken on rent by them as godowns for storing and stocking of raw materials. In order to buttress his aforesaid claim the Ld. AR had drawn our attention to the respective confirmations o....