TaxTMI 
TaxTMI 
2023 (4) TMI 796
X X X X Extracts X X X X
X X X X Extracts X X X X
....issue to be decided in this appeal is as to whether the assessee would be eligible for deduction u/s.80P(2)(d) of the Act in respect of interest received from Co-operative banks in the facts and circumstances of the instant case. 3. We have heard rival submissions and perused the materials available on record. It is not in dispute that assessee is a co-operative housing society and eligible for deduction u/s.80P of the Act. It is not in dispute that assessee during the A.Y. 2020-21 had received interest income from Maharashtra State Co-operative bank amounting to Rs.1,04,981/- and Saraswat Co-operative Bank amounting to Rs.7,21,808/-, both totalling to Rs.8,26,789/-. The assessee in the return of income claimed deduction u/s.80P(2)(d) of the Act in respect of this sum of interest of Rs.8,26,789/- The ld. CPC while processing the return u/s.143(1)of the Act denied deduction u/s.80P(2)(d) of the Act in respect of interest income derived from co-operative bank amounting to Rs.8,26,789/-. The assessee preferred an appeal before the ld. CIT(A). The ld. CIT(A) by placing reliance on the decision of the Hon'ble Supreme Court in the case of Totgars Co-operative Society Ltd vs ITO report....
X X X X Extracts X X X X
X X X X Extracts X X X X
....TR 0074 (Kar) 9. Citizen Co-operative society Ltd Vs. ACIT, (2017) 397 ITR 0001 (SC) 10. The Totgars Co-operative Sale Society Ltd VS ITO, (2010) 322 ITR 0283(SC). 3. We consider it appropriate to refer to the observations of the Coordinate Bench of the Hon'ble Tribunal in M/s Petit Towers Co-operative Housing Society Ltd Vs. ITO in ITA No.549/Mum/2021 dated 1-09-2021 at page 6 Para 8 of the order, which is read as under: 8. We have given a thoughtful consideration to the contentions advanced by the ld. Authorized representatives for both the parties in context of the aforesaid issue under consideration. As stated by the ld. A.R, and rightly so, the issue that interest received by a co-operative society on its deposits with co-operative banks would be eligible for deduction u/s 80P(2)(d) of the Act is covered in assessee‟s favour by orders of the various coordinate benches of the Tribunal in the following cases : (i). M/s Solitaire CHS Ltd. Vs. Pr.CIT-26, Mumbai, ITA No. 3155/Mum/2019, dated 29.11.2019 (ii). Land and Cooperative Housing Society Ltd. Vs. ITO (2017) 46 CCH 52 (Mum.) (iii). M/s C. Green Cooperative H....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ltural 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 co- operative societies, the Pr. CIT was of the view that the interest income earned on such investments/deposits would not be eligible for deduction under Sec. 80P(2)(d) of the Act. 7. After necessary deliberations, we are unable to persuade ourselves to be in agreement with the view taken by the Pr. CIT. Before proceeding any further, we may herein reproduce the relevant extract of the aforesaid statutory provision, viz. Sec. 80P(2)(d), as the same would have a strong bearing on the adjudication of the issue before us. "80P(2)(d) (1). Where in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in subsection (2), in computing the total income of the assessee. (2). The sums referred to in sub-section (1) shall be the following, namely :- (a)........................
X X X X Extracts X X X X
X X X X Extracts X X X X
.... be a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State for the registration of co-operative societies, therefore, the interest income derived by a co-operative society from its investments held with a co-operative bank would be entitled for claim of deduction under Sec.80P(2)(d) of the Act. 8. We shall now advert to the judicial pronouncements that have been relied upon by the ld. A.R. 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) Land and Cooperative Housing Society Ltd. Vs. ITO (2017) 46 CCH 52 (Mum) (ii)M/s C. Green Cooperative Housing and Society Ltd. Vs. ITO-21(3)(2), Mumbai (ITA No. 1343/Mum/2017, dated 31.03.2017 (iii) Marvwanjee Cama Park Cooperative Housing Society Ltd. Vs. ITO-Range- 20(2)(2), Mumbai (ITA No. 6139/Mum/2014, dated 27.09.2017. (iv). Kaliandas Udyog Bhavan Pemises Co-op. Society Ltd. Vs. ITO, 21(2)(1), Mumbai. We further find tha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....23;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 Hon‟ble High Court of Gujarat in the case of State Bank Of India Vs. CIT (2016) 389 ITR 578 (Guj), wherein it was observed that the interest income earned by a cooperative society on its investments held with a cooperative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act. 9. Be that as it may, in our considered view, as the A.O while framing the assessment had taken a possible view, and therein concluded that the assessee would be entitled for claim of deduction under Sec. 80P(2)(d) on the interest income earned on its investments/deposits with co- operative banks, therefore, the Pr. CIT was in error in exercising his revisional jurisdiction u/s 263 for dislodging the same. In fact, as observed by us hereinabove, the a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the Act on the interest income received /earned from the co-operative banks and allow the appeal filed by the assessee. ITA No. 2459/Mum/2021 (A.Y 2017-18) ITA No. 2460/Mum/2021 (A.Y 2016-17) ITA No. 2461/Mum/2021 (A.Y 2015-16) 10. As the facts and circumstances in these appeals are identical to ITA No.2462/Mum/2021, for the A.Y 2014-15 and the decision rendered in above paragraphs would apply mutatis mutandis for these cases also. Accordingly, grounds of appeal of the assessee are allowed. 11. In the result, the four appeals filed by the assessee are allowed. 4.1. When this was put to the ld. DR, the ld. DR said that the assessee's case falls under the aforesaid two decisions of the Hon'ble Supreme Court relied upon by the ld.CIT(A) in his order. We have gone through the said decisions of the Hon'ble Supreme Court referred to supra. Firstly, the decision in the case of Totgars Cooperative Housing Society was rendered in the context of eligibility to claim deduction u/s.80P(2)(d) of the Act. Hence, reliance placed on the said decision would not advance the case of the Revenue. Moreover the said decision has already been considered in ....