2022 (4) TMI 494

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....return of income for the assessment year 2012-13 was filed on 15.09.2013 declaring Rs.Nil income. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward- 1(3), Belgaum ('the Assessing Officer') vide order dated 31.07.2014 passed u/s 143(3) of the Income Tax Act, 1961 ('the Act') at a total income of Rs. 9,19,389/-. While doing so, the Assessing Officer denied the claim for deduction of exemption of income of Rs. 8,19,601/- being the amount of interest received from other cooperative society i.e. Belgaum District Central Co-op. (BDCC) Bank Ltd. on the ground that income of the cooperative bank is not exempt from the tax u/s 80P(4) of the act. 3. Being aggrieved by the order of assessment, an appeal w....

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..../s 80P(2)(d) of the Act is that interest was received from cooperative bank has no legs to stand as a cooperative bank is also a cooperative society. This issue was considered by the Hon'ble Karnataka High Court in the case of CIT vs. Totagars Cooperative Sale Society, 392 ITR 74 (Karn) wherein the Hon'ble High Court referring to the Hon'ble Supreme Court in the case of Totgars Co-operative Sales Society Ltd. (supra) held that the ratio of decision of the Hon'ble Supreme Court in the aforesaid case (supra) not to be applicable in respect of interest income on investment as same falls under the provisions of section 80P(2)(d) and not u/s 80P(2)(a)(i) of the Act. 8. Even the decision of Pune Bench of the Tribunal in the case of Sant Motiram ....

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.... and that of the Hon'ble Delhi High Court in Mantola Cooperative Thrift Credit Society Ltd. Vs. CIT (2014) 110 DTR 89 (Delhi) not allowing deduction u/s.80P on interest income earned from banks. Both the Hon'ble High Courts took into consideration the ratio laid down in the case of Totgar's Cooperative Sale Society Ltd. (2010) 322 ITR 283 (SC). There being no direct judgment from the Hon'ble jurisdictional High Court on the point, the Tribunal in Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit (supra) preferred to go with the view in favour of the assessee by the Hon'ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. (supra). 10. Insofar as the reliance of the ld. DR on th....