TaxTMI 
TaxTMI 
2023 (5) TMI 1177
X X X X Extracts X X X X
X X X X Extracts X X X X
....llowing ground:- "Being aggrieved by the order dated 27.01.2023 passed by the learned Commissioner of Income Tax (Appeals), Income Tax Department, National Faceless Appeal Centre, Delhi ["Ld. CIT(A)" u/s 250 of the Income-tax Act, 1961 ("Act"), your appellant prefers this appeal, among others, on the following grounds of appeal, each of which is without prejudice to, and independent of, the other: 1. On the facts and in the circumstances of the case, and also in law, the Ld. CIT(A) erred in confirming the addition of Rs.75,00,740/- made by the Ld. AO being disallowance of deduction u/s. 80P claimed by the appellant. Your appellant, therefore, prays that deduction u/s. 80P of Rs.75,00,740/- be allowed to it. Your appellant craves leave....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2) of the Act and therefore is entitled to deduction under the said section. The Assessing Officer ("AO") vide order dated 07/12/2019 passed under section 143(3) of the Act did not agree with the submissions of the assessee and held that section 80P(4) of the Act applies to co-operative societies carrying on the business of banking including providing of credit facilities to its members. Accordingly, the AO denied the deduction of Rs.75,00,739 claimed by the assessee under section 80P of the Act. 4. The learned CIT(A) vide impugned order dismissed the appeal filed by the assessee and held that the assessee has deposited money with MDCC Bank Ltd., which is a bank, and thus section 80P(4) of the Act is applicable to it. Accordingly, the lear....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ety. Further, section 80P(2)(d) of the Act, reads as under: "80P. Deduction in respect of income of co-operative societies. (1) ...... (2) The sums referred to in sub-section (1) shall be the following, namely:- (a) ..... (b) ..... (c) ..... (d) in respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other co-operative society, the whole of such income;" 6. Thus, for the purpose of provisions of section 80P(2)(d) of the Act, two conditions are required to be cumulatively satisfied- (i) income by way of interest or dividend is earned by the co-operative society from the investments, and (ii) such investments should be with any other co-operative society. Furthe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ysing the provisions of section 80P(4) of the Act held that section 80P(4) is a proviso to the main provision contained in section 80P(1) and (2) and excludes only co-operative banks, which are co-operative societies and also possesses a licence from RBI to do banking business. The Hon‟ble Supreme Court further held that the limited object of section 80P(4) is to exclude co-operative banks that function at par with other commercial banks i.e. which lend money to members of the public. Thus, we are of the considered view that section 80P(4) of the Act is of relevance only in a case where the assessee, who is a co-operative bank, claims a deduction under section 80P of the Act. Therefore, we find no merits in the aforesaid reasoning ado....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed the deduction claimed by the assessee under section 80P(2)(d) of the Act, by observing as under:- "7. Hon'ble High Court of Karnataka in case of Pr. CIT & Anr. Vs. Totgar's Co-operative Sale Society Ltd. (2017) 292 ITR 74 (Kar.) and Hon'ble Gujarat High Court in case of State Bank of India vs. CIT (2016) 389 ITR 578 (Guj.) had also held that interest income earned by a co-operative society on its investment held with co-operative bank would be eligible for claim of deduction under section 80P(2)(d) of the Act. We are of the considered view that the Ld. CIT(A) has erred in upholding the denial of deduction by the AO to the assessee under section 80P(2)(d) of the Act. 8. So following the decision rendered by Hon'ble Karnataka High Cour....