2022 (9) TMI 970

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..... 97/SRT/2022 is treated as "lead" case. The assessee has raised the following grounds of appeal: "1. The learned CIT(A) has erred in holding that the interest of Rs.13,91,842 received from Co.op.Bank is not eligible for deduction under Section 80P(2)(d) following the judgment of Gujarat High Court in the case of State Bank of India V/s CIT (2016) 72 Taxmann.com 64 (Gujarat) and the Hon'ble Karnataka High Court in the case of PCIT V/s. Totgar's Co-operative Sale Society 83 taxmann.com 140 inasmuch as the learned CIT(A) should have followed Suprem Court decision in the case of Mavilayi Service Co-Operative Bank Ltd. and Others V/s CIT 431 ITR 1 (SFC) and that the entire income of a Credit Co.op.Society is eligible for deduction under Section 80P(2)(a)(i) including interest from the Surat Dist. Co.op. Bank Ltd. As per SC decision. 2. The appellant says and submits that the assessee is a Co.op.Society." 2. Brief facts of the case are that assessee is Credit Co-operative Society, engaged in providing credit facilities to its members. The assessee filed its return of income for the year under consideration for the year 2016-17 on 28.03.2018 declaring nil income. In the computat....

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....#39;ble Apex Court in the case of Mavilayi Service Co- Operative Bank Ltd. and Others vs. CIT 431 ITR 1 (SC). As the assessee has filed its written submission, therefore, I have no option except to hear the submission of learned Senior Departmental Representative (Sr. DR) for the Revenue and to decide the appeals on the basis of submission of ld DR for the revenue and the material available on record. 4. The Ld. Sr-DR for the Revenue supported the order of lower authorities and submits that Bench may decide both the appeals on merits considering the order of lower authorities. 5. I have considered the written submission filed by assessee and the submission made by ld. Sr DR for the Revenue. I have also have gone through the orders of lower authorities. I have also deliberated on the case law relied by assessee in its written submission, which is primarily on the deduction under section 80P(2)(a)(i) of the Act, however, the issue raised in the present appeal relates to deduction under section 80P(2)(d). 6. I find that the Assessing Officer made the disallowances under 80P(2)(d) by taking view that Co-Operative Banks are different than the Co-Operative Society. The assessee has ea....

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....under:- "8. Section 80P(2)(d) of the Act allows whole deduction of an income by way of interest or dividends derived by the cooperative society from its investment with any other cooperative society. This provision does not make any distinction in regard to source of the investment because this Section envisages deduction in respect of any income derived by the co-operative society from any investment with a co-operative society. It is immaterial whether any interest paid to the co-operative society exceeds the interest received from the bank on investments. The Revenue is not required to look to the nature of the investment whether it was from its surplus funds or otherwise. The Act does not speak of any adjustment as sought to be made out by learned counsel for the Revenue. The provision does not indicate any such adjustment in regard to interest derived from the cooperative society from its investment in any other cooperative society. Therefore, we do not agree with the argument advanced by learned counsel for the Revenue. In our opinion, the learned Tribunal was right in law in allowing deduction under Section 80P(2)(d) of the Income-tax Act, 1961. in respect of interest of R....

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.... is not erroneous. The assessee also explained that similar disallowances/issues was subject matter in the appeal filed by the revenue before Tribunal in A.Y. 2009-10, 2010-11 and 2012-13 and the assessee was allowed similar deductions. 13. The Hon'ble Jurisdictional High Court in Aryan Arcade Ltd. v. Pr. CIT [2019] 412 ITR 277 (Gujarat) held that merely because Commissioner held a different belief that would not permit him to take the order in revision, it if further held that when Assessing Officer made full enquiry, he made up his mind, the notice of revision is not valid. (emphasis added by us). Further, Hon'ble Madras High Court in CIT v. Mepco Industries Ltd. [2007] 163 Taxman 648/294 ITR 121 (Madras) held that when two views are possible on an issue and it is not the case of the Commissioner that the view taken by Assessing Officer is not permissible in law, Commissioner cannot invoke his jurisdiction under section 263 of the Act. (emphasis added by us) 14. As we have noted above the assessing officer has made enquiries on the allowability of deduction under section 80(P)(2)(d) and passed the assessment order, thus, the Assessing Officer has taken a reasonable an....