TaxTMI 
TaxTMI 
2022 (5) TMI 367
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....ppeals is not justified in holding that the Income earned by the appellant credit Co-operative Society amounting to Rs. 4,68,333/- on Fixed Deposits required to be assessed under the head 'Income from Other Sources' u/s 56 of the Income Tax Act and not as part of business of providing credit facility and thereby also holding that the Income of the appellant Society is not entitled for deduction Under provisions of section 80-P of the Act as claimed by the Appellant Society in the Return of Income on the totality of facts and circumstances of the case. 2. That the Learned CIT- Appeals has also erred in Law and on t he facts of the case in confirming the action of the Learned Assessing Officer holding that the Appellant society that....
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....68,333/-earned by the assessee from the fixed deposit with Bhavnagar District Cooperative Bank and charged the same u/s 56 of the Act as income of the assessee. 4. In appeal before Ld. CIT(A), he disallowed the assessee's appeal. While passing the order, Ld. CIT(A) made the following observations: "The AO has also relied upon the following case laws:- * judgement of ITAT, Ahmedabad delivered on 31 January, 2019 in the case of The Government Servants Co-operative Society vs The ITO Ward -3(1 )(1), Vadodara which further elaborated on the other judgement. * CIT vs Adarsh Housing Co-op Society 2131 TR 677(Guj.) * Totagars Co-operative sale society Ltd. vs Pr. CIT, Hubbali (2017) 83 taxmann.com 140 (Karnataka) * ITAT, Ahmedabad in th....
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....39;ble Supreme Court in the matter of Citizen Cooperative Society v. ACIT [397 ITR 1], wherein at para 24, it was held as under: "24) Undoubtedly, if one has to go by the aforesaid definition of 'co-operative bank', the appellant does not get covered thereby. It is also a matter of common knowledge that in order to do the business of a co-operative bank, it is imperative to have a licence from the Reserve Bank of India, which the appellant does not possess. Not only this, as noticed above, the Reserve Bank of India has itself clarified that the business of the appellant does not amount to that of a co-operative bank. The appellant, therefore, would not come within the mischief of subsection (4) of Section 80P." 6.9 In view of th....
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....ttributable to the business carried on by the appellant, cannot be deducted under section 80P(2)(a) (i) of the Act. If the appellant wants to avail of the benefit of deduction of such interest income, it is always open for it to deposit the surplus funds with a co-operative bank and avail of deduction under section 80P(2)(d) of the Act. 6.1 In the case of Surat Vankar Sahakari Sangh Ltd. v Assistant Commissioner of Income-tax[2016] 72 taxmann.com 169 (Gujarat), the Gujarat High Court held that assessee-co-operative society was eligible for deduction under section 80P(2)(d) of the Act in respect of gross interest received from co-operative bank without adjusting interest paid to said bank. 6.2 In the case of Surendranagar District Co-op. M....