TaxTMI 
TaxTMI 
TaxTMI 
2022 (10) TMI 834
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.... appeal by the assessee for the assessment year 2014-15 is taken up as a lead case and the decision rendered therein would apply mutatis mutandis to the appeals for the assessment year 2016-17, 2017-18 and 2018-19 as well, except with variance in figures. ITA no.1057/Mum./2022 Assessee's Appeal - A.Y. 2014-15 3. In this appeal, the assessee has raised following grounds:- "1) On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax erred in confirming the denial of the deduction in respect of interest from Co-operative banks amounting to Rs. 1,01,30,360/ SOP(2)(d) and in dismissing the appeal. Your appellant states that justice be done by granting deduction allowable us 80P(2)(d) denied by the learned A.O. to the appellant. 2) The learned CIT(A) erred in holding that interest from co-operative banks is includible in total income under the head Income from other sources and not eligible for deduction u/s 80P(2)(d)." 4. Only grievance of the assessee in present appeal is against denial of deduction in respect of interest received from co-operative banks under section 80P(2)(d) of the Act. 5. The brief facts of the case, as emanatin....
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....ailable on record and various case laws referred on the above matter. It is seen that the Assessing Officer has disallowed deduction u/s 80P on interest income earned from Co-operative Bank. Assessing Officer has disallowed the deduction u/s 80P on interest income of Rs. 1,01,80,360/- because it was not earned out of business operation. 7.1 During the course of assessment proceedings the assessee has stated that it has derived income by way of interest from a) Sharmrao Vithal Co-operative Bank Ltd, b) Abhyudaga Co-operative Bank Ltd, c) Saraswat Co operative Bank Ltd being the investment with any other Co-operative Society, the whole of the amount is deductible u/s 80P(2)(d) of the Income Tax Act. 1961". However, the appellant, neither during the course of assessment proceedings nor during the course of appeal, has submitted any evidence to prove that the above co-operative Bank are Co-operative society. Moreover, it is seen that the action of the Assessing Officer is in accordance with the decision of the Hon. Gujarat High Court in the case of State Bank of India (SBI) Vs. Commissioner of Income-tax [2016] 72 taxmann.com 64 (Gujarat HC). In the said decision Hon'ble Gujrat H....
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....erative banks from which interest income was earned by the assessee are registered as co-operative society. The learned AR further submitted that under section 80P(2)(a)(i) emphasis is on carrying on of the business and therefore Hon‟ble Supreme Court in Totgar‟s Co-operative Sale Society Ltd (supra) dealt with the issue whether income is business income or income for other sources. While, for the purpose of section 80P(2)(d), interest or dividend are always be income from other sources and there is no requirement that the assessee be carrying on business and income is received from that business. 8. On the other hand, learned Departmental Representative ("learned DR‟) vehemently relied upon the orders passed by the lower authorities. 9. We have considered the rival submissions and perused the material available on record. In the present case, assessee is maintaining the procures of the society members and it collects contribution from the members for maintenance and managing the buildings of the society. Before proceeding further, it is pertinent to analyse few provisions of the Act, which are relevant for the purpose of this appeal. As per the provisions of se....
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.... the co-operative banks in which assessee had invested are registered as co-operative societies and therefore we are of the considered view that these banks are co-operative society as per the provisions of section 2(19) of the Act. 13. Further, as regards the reliance placed by the AO as well as the learned CIT(A) upon the decision of Hon‟ble Supreme Court in Totgar‟s Co-operative Sale Society Ltd (supra), we find that in the said case the issue was whether taxpayer would be entitled to deduction under section 80P(2)(a)(i) of the Act. Therefore, the provisions of section 80P(2)(d) of the Act were not under consideration before the Hon‟ble Supreme Court. Thus, we are of the considered opinion that the reliance upon the aforesaid decision by the lower authorities is completely misplaced. In this regard, following observations of Hon‟ble Supreme Court in CIT vs Sun Engineering Private Limited, [1992] 198 ITR 297 (SC), becomes relevant: "It is neither desirable nor permissible to pick out a word or a sentence from the judgment of the Court, divorced from the context of the question under consideration and treat it to be the complete 'law' declared by....