TaxTMI 
TaxTMI 
2023 (6) TMI 560
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....gned delay of 151 days in filing of the instant appeal stands condoned therefore. 4. Next comes assessee's sole substantive grounds on merits that both the lower authorities have erred in law and on facts in rejecting its section 80P(2)(d) deduction claim of Rs. 9,35,731/- representing interest income derived from fixed deposits made with M/s. Belgavi District Cooperative Credit Bank, Belagavi for the reason that such receipts from cooperative societies is not eligible for the foregoing relief. 5. I have given my thoughtful consideration to vehement rival contentions and find no merit in the Revenue's stand in the light of this Tribunal's recent coordinate bench common order in ITA.Nos.170 & 171/Pune/2018 dated 04.04.2022 in The Belagavi Manufacturers cooperative Industrial Estate Ltd., Udyambag - Belagavi and others vs., ITO, Ward-1(1), Belagavi as follows : "4. Brief fact is that all the cooperative societies invested their surplus funds in Cooperative Bank and accordingly the interest was earned. The assessee claimed the interest as deduction u/s 80P but the Ld. AO disallowed the deduction for violation of Section 80P(2)(d) of the Income Tax Act (in brevity the Ac....
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....meanings respectively assigned to them in Part-V of the Banking Regulation Act, 1949. The following definitions under Banking Regulation Act, 1949 will help in determining whether any particular Co-operative Society can be treated as Co-operative Bank/ Primary Co-operative Bank or not. SI. No Category Clause/section of Banking Regulation Act, 1949 Definition 1 Co-operative Bank Clause (cci) of Section 5 Co-operative Bank means a State Cooperative Bank, a Central Co-operative Bank and a 2 Primary Co-operative Bank Clause (ccv) of Section 5 Primary Co-operative Bank means a Cooperative Society other than a Primary Agricultural Credit Society- (1) the primary object or principal business of which is the transaction of banking business; (2) the paid up share capital and reserves of which are not less than one lakhs of rupees; (3) the bye-laws of which do not permit admission of any other co-operative society as a members. 3 Primary Credit Society Clause (ccvi) of Section 5 Primary Co-operative Society means a Cooperative society other than a primary agricultural credit society - (1) the primary object or principal business of ....
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....f deduction of the aforesaid amount is unsustainable in law. Accordingly it is hereby set aside. The substantial question of law is answered in favour of the assessee and against the revenue. Hence, we pass the following order" b) In the case of The Commissioner of Income tax vs Gulshan Mercantile Urban Co-Operative Bank Ltd [2013] 29 taxmann.com 8 (All.) "10. The question as to whether the business is derived from or attributable to SLR or non-SLR funds would not make any difference for the purposes of qualifying the interest earned by the cooperative bank under Section 80P(2)(a)(i) as the deposits of surplus idle money available from working capital, including reserves, excess collection of interest tax and other incomes are all attributable to the business of banking. The interest from such deposits cannot be said to be beyond the legitimate business activities of the bank. 11. For the aforesaid reasons, we do not find that the Income Tax Appellate Tribunal committed any error in arriving at findings that the interest are not deposits of non-SLR funds and the cooperative bank will qualify for exemption under Section 80P(2)(a)(i) of the Act." c....
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.... co-operative society. This provision does not make any distinction with regard to the source of investment because this section envisages deduction in respect of any income derived by cooperative society from in his investment with a cooperative society. So the Revenue is not required to look another of investment whether it was formed as required within time or otherwise. 10.4. We have heard the considered of the case of Totagars Co-operative Sales Society Ltd. Supra which was relied by the Ld. DR and find that the Hon'ble Apex Court has dilapidated on the issue of deduction u/s 80P(2)(a)(i) but not on section 80P(2)(d). We also observed that in the case of Totagars Cooperative Sales Society Ltd, [2017] 78 taxmann.com 169 (Karnataka) itself the Hon'ble High Court of Karnataka has allowed the claim of deduction u/s 80P(2)(d) vide order dated 05.01.2017. 10.5. Considering all the judgments of the different High Courts & Tribunals we hereby hold that the investment of assessee in cooperative bank is eligible investment u/s 80P(2)(d) of the Act. The interest of the said investment related to Cooperative Society, assessee is eligible for deduction u/s 80P(2)(a)(i) of....