TaxTMI 
TaxTMI 
2022 (8) TMI 800
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.... 80P(2)(a)(i) of the Income-tax Act, 1961 (hereinafter referred to as "the Act") even though the assessee qualifies for deduction being a registered co-operative society vis-à-vis in providing credit facilities to its members. There are several decisions of the co-ordinate Bench Pune, where deduction u/s 80P(2)(a)(i) has been allowed to a registered co-operative society engaged in providing credit facilities to its members. In ITA No. 826/PUN/2019 for A.Y. 2014-15, order dated 23-09-2020, it was held as follows: "3. We have heard the rival submissions through virtual court and gone through the relevant material on record. The assessee is admittedly a credit cooperative society providing credit facility to its members. The as....
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.... other co-operative society, the whole of such income.' It is axiomatic that only interest derived by a co-operative society from its investments with any other co-operative society is eligible for deduction under clause (d). Conversely, if the payer of the interest is not a co-operative society, its payee, a co-operative society cannot claim deduction thereon under this clause. Admittedly, the assessee received interest from a co-operative bank and not a co-operative society. A fortiori, such an amount is not eligible for deduction u/s 80P(2)(d) of the Act. 5. However, the case of the assessee before the authorities below ab initio has been that it was eligible for deduction on such interest u/s.80P(2)(a)(i) of the Act inasmuch as....
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....as loan, if utilised elsewhere, will nonetheless lead to generation of profits and gains of business of providing credit facilities to its members. The thread of link between income and business of providing credit facilities to the members will be broken if despite there being the members wanting to avail credit facilities, the co-operative society chooses to prefer making deposits with banks etc. rather than advancing sums to its members. 7. Right now we are confronted with a situation in which the assessee cooperative society has made deposits with co-operative banks and earned interest income, which is exactly the bone of contention. The stand of the assessee is that these are short term deposits of the money not required for t....
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....y the Hon'ble Karnataka High Court in Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO (2015) 230 Taxman 309 (Kar.) allowing deduction u/s. 80P on interest income 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 H....
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....vestments made with co-operative banks. 11. Now we advert to the second issue espoused by the ld. Pr. CIT about the interest income of Rs.2,334/- received by the assessee on refunds u/s.244A of the Act. We find that this issue is fully and directly covered by the Special Bench order passed by the Mumbai benches of the Tribunal in the case of Maharashtra State Cooperative Bank Ltd. Vs. ACIT (2010) 129 TTJ 521 (SB) (Mumbai) holding that interest on income-tax refund u/s.244A is covered within the expression "profits and gains of business" occurring in section 80P(2)(a) and ergo eligible for deduction u/s.80P(2)(a)(i) of the Act. Albeit interest amounting to Rs.2,334/- received u/s.244A of the Act is chargeable to tax but at the same ....