TaxTMI 
TaxTMI 
2022 (12) TMI 870
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....ng grounds of appeal: 1) The learned Commissioner of Income Tax (Appeals) erred in not allowing deduction u/s. 80P of the Income Tax Act, 1961 ("the Act') of Rs.10,35,413/- 2) The learned Commissioner of lncome Tax (Appeals) erred in not allowing deduction u/s. 80P(2)(d) of the Act of Rs. 10,35,413/-, in respect of interest on Savings and Fixed Deposits with Co-operative Bank. 3) The learned Commissioner of Income (Appeals) erred in holding that benefit of section 80P is admissible to the extent of business activities with members and not available on interest income earned from investment. 4) The learned Commissioner of Income Tax (Appeals) erred in not considering that disallowance of claim u/s. 80P(2)(d) of the Act does not f....
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....relied on a plethora of judgments supporting the claim of the assessee. 6. The ld. Departmental Representative (ld. DR for short), on the other hand, relied on the proposition laid down by the Hon'ble Apex Court in the case of Totagars Cooperative Sales Society Ltd. (supra). 7. Having heard the rival submissions and perused the materials available on record. It is observed that the assessee has earned rental income and interest on deposits made with co-operative bank. The moot question here is "whether the assessee is eligible for deduction u/s.80P(2)(d) where the deposits were made in the co-operative banks". The assessee contends that the co-operative bank is akin to that of the co-operative society which is registered under the Co-....
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....cter of income depends upon the nature of the activity for earning of that income. The relevant extract is cited as under: "23. Thus, the aforesaid judgments supports the view taken by this Court that character of income depends upon the nature of activity for earning that income and though on the face of it, the same may appear to be falling in any of the specified Clauses of Section 80P(2) of the Act, but on a deeper analysis of the facts, it may become ineligible for deduction under Section 80P(2) of the Act. The case in Udaipur Sahakari Upbhokta Thok Bhandar Ltd. (supra) was that of Section 80P(2)(e) of the Act, whereas in the present case, it is under Section 80P(2)(d) of the Act. Hence, the income by way of interest earned by deposi....
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....e of Kaliandas Udyog Bhavan Premises Cooperative Soceity vs. ITO [2018] 94 taxmann.com 15 (Mum-Trib), which has considered the decision of the Totgars Co-operative Sales Society Ltd. (supra) and also the decision of the Hon'ble High Court of Gujarat in the case of State Bank of India [2016] 72 taxmann.com 64 (Guj). The relevant extract of the cited decision is hereunder for the ease of reference: We further find that the Hon'ble High Court of Karnataka in the case of Totagars Cooperative Sale Society (supra) and Hon‟ble High Court of Gujarat in the case of State Bank Of India (supra), had also held that the interest income earned by the assessee on its investments held with a co-operative bank would be eligible for claim of ....
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....ec. 80P(4) had adjudicated the issue before them. We are afraid that the reliance placed by the ld. D.R on the aforesaid order of the Tribunal being distinguishable on facts, thus, would be of no assistance for adjudication of the issue before us. Still further, the reliance placed by the Ld. D.R on the order of the ITAT "SMC‟ Bench, Mumbai in the case of Shri Sai Datta Co-operative Credit Society Ltd. (supra), would also not be of any assistance, for the reason that in the said matter the Tribunal had set aside the issue to the file of the assessing officer for fresh examination. That as regards the reliance placed by the ld. D.R on the judgment of the Hon'ble High Court of Karnataka in the case of Totagars co-operative Sale Soci....