TaxTMI 
TaxTMI 
2022 (8) TMI 89
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.... 2. The assessee's sole substantive ground raised in the instant appeal challenges correctness of learned PCIT's revision directions holding the corresponding regular assessment dated 04.07.2016 as an erroneous one causing prejudice to the interest of Revenue for the reason that the Assessing Officer had wrongly accepted its section 80P(2)(a) deduction claim regarding interest income of Rs.13,51,359/- derived from deposits made in the co-operative banks. 3. Learned CIT-DR vehemently supported the PCIT's revision directions under challenge read as under: "05. Adverting to the facts of impugned case, the assessee is a cooperative society engaged in the activity of providing credit facilities to its members. The assertion of the Addl. CIT ....
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....rporate from which such interest income is received will not change its character, viz. Interest income not arising from its business operations, which made it ineligible. I find that the issues are squarely covered by the Hon'ble Supreme Court of India and Hon'ble Karnataka High Court in the case of The Totagars Co-Operative Sale Society. 06. In view of the foregoing discussion, it is clear that the assessee society was not entitled to claim deduction under chapter VIA of the Act and its claim was allowed by the Assessing Officer. In view of the forgoing wrong claim u/s 80P(2)(a)(i), the assessment completed under section 143(3) of the Income Tax Act, 1961, by the Income Tax Officer, Ward - 9(4), Pune, on 04.07.2016, for Assessme....
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....en made available on the statute, vide the Finance Act 2006, with effect from 01.04.2007. On a perusal of the order passed by the Pr. CIT under Sec. 263 of the Act, we find, that he was of the view that pursuant to insertion of sub-section (4) of Sec. 80P, the assessee would no more be entitled for claim of deduction under Sec. 80P(2)(d) in respect of the interest income that was earned on the amounts which were parked as investments/deposits with the co-operative bank, other than a Primary Agricultural Credit Society or a Primary Co-operative Agricultural and Rural Development Bank. Observing, that the co-operative banks from where the assessee was in receipt of interest income were not cooperative societies, the Pr. CIT was of the view th....
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.... held with any other co-operative society shall be deducted in computing its total income. We may herein observe, that what is relevant for claim of deduction under Sec. 80P(2)(d) is that the interest income should have been derived from the investments made by the assessee co-operative society with any other co-operative society. We are in agreement with the view taken by the Pr. CIT, that with the insertion of sub-section (4) to Sec. 80P of the Act, vide the Finance Act, 2006 with effect from 01.04.2007, the provisions of Sec. 80P would no more be applicable in relation to any co-operative bank, other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. However, at the same time, we....
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....e Act. 9. In so far the judicial pronouncements that have been relied upon by the ld. A.R are concerned, we find that the issue that a co-operative society would be entitled for claim of deduction under Sec. 80P(2)(d) on the interest income derived from its investments held with a co-operative bank is covered in favour of the assessee in the following cases: (i) M/s Solitaire CHS Ltd. vs. Pr. CIT, ITA No. 3155/Mum/2019; dated 29.11.2019 ( ITAT "G" Bench, Mumbai); (ii) Majalgaon Sahakari SAkhar Karkhana Ltd. Vs. ACIT, Circle-3, Aurangabad, ITA No, 308/Pun/2018 (ITAT Pune) (iii) Kaliandas Udyog 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.....
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....Act. Backed by the aforesaid conflicting judicial pronouncements, we may herein observe, that as held by the Hon'ble High Court of Bombay in the case of K. Subramanian and Anr. Vs. Siemens India Ltd. and Anr (1985) 156 ITR 11 (Bom), where there is a conflict between the decisions of non-jurisdictional High Court's, then a view which is in favour of the assessee is to be preferred as against that taken against him. Accordingly, taking support from the aforesaid judicial pronouncement of the Hon"ble High Court of jurisdiction, we respectfully follow the view taken by 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 that of the ....