TaxTMI 
TaxTMI 
2023 (8) TMI 1110
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....entre, Delhi (NFAC) for the AYs 2017-18 & 2018-19. 2. Since the grounds and issues involved in these appeals are similar, these appeals were heard together and disposed of by this common order for the sake of convenience and brevity. The grounds raised in AY 2017-18 as follows:- "1.0 The assessment order passed u/s. 143(3) of the Income Tax Act, 1961 dated 19/11/2019 by the Income Tax Officer, Ward-1 (7), Hubli is erroneous to the facts and law and the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi has erred in confirming the assessment order. 2.0 The learned Income Tax Officer, Ward-1(7), Hubli has erred in disallowance of Rs. 9,93,255/- 80P(2)(a)(i)of the Income Tax Act, 1961 and the lear....
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.... also engaged in purchase and supply of daily needs products like grains, edible oils and other daily needs exclusively for its members and maintained separate trading account for consumer business. The AO noted that deduction u/s 80P(2)(a)(i) of the Act is provided to a co-operative society and in the absence of registration under Karnataka Co-op. Societies Act, 1959, the AO disallowed the claim of deduction amounting to Rs. 63,48,443. Further the AO noted that the assessee has received interest income of Rs. 9,93,255 on account of interest on investment with KCC Bank in FD/RFD and disallowed the same u/s. 80P(2)(a)(i). The CIT(Appeals) confirmed the disallowance of Rs. 9,93,255 made by the AO. Aggrieved, the assessee is in appeal before t....
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....galore in the case of M/s. The Jayanagar Co-operative Society Ltd in ITA No. 3254/Bang/2018, Date of decision 23 July 2019. ....... As per the provisions of Section 80P(1) of the Income Tax Act, 1961, the income of a Co-operative Society specified in Section 80P(2) of the Act is eligible for deduction in computing total income of the assessee. .......... The jurisdictional High Court of Karnataka in the case of CIT Vs. M/s. Sri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha Bagalkot reported in [2015] 56 Taxmann.com 280 (Karnataka) has held as under: "Assessee, a credit co-operative society, engaged in providing credit facilities to its members only, was entitled to claim deduction under sec....
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....g credits to its members and earned interest on deposits in bank which were out of deposits received from members, interest earned was exempt under section 80P and, accordingly, assessee was entitled to section 80P(2)(a)(i)." In view of the above, it is- submitted that the interest and dividend income earned by the assessee from Co-operative banks is also eligible for deduction u/s. 80P(2)(i) of the Income Tax Act, 1961 and therefore it is requested to delete the additions of Rs. 9,93,255/- confirmed by the learned CIT(A). ......... It is also submitted that the Hon'ble ITAT, Bangalore in appellant's own case for A.Y. 2010-11 in ITA No. 638/Bang/2015, Date of decision 14/08/2015 has considered and allowed ....
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....assessee has received interest of Rs. 9,93,255 from investments in FD/RFD from DCCB. The issue raised by assessee that it is eligible for deduction u/s. 80P(2)(a)(i) of the Act. The assessee has received interest on deposits from DCCB but not the interest from credit facilities provided to members during the ordinary course of business. However the ld. AR submitted that the assessee is required to maintain certain funds as per the relevant Act/Rules but he has not shown under which Act/rules and how much funds are required to deposited. Since the assessee is registered under the Karnataka Souharda Sahakari Act, 1997 therefore the issue is remitted back to the file of the AO and assessee is directed to demonstrate the mandatory requirement f....
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....he next immediate question that follows is as to whether the entire fund i.e., in deposit with the Bank is taxable or the proportionate expenditure incurred by the appellant requires deduction. It is logical that when the Revenue is permitted to assess and recover taxes from assessee under Section 56 by treating the income earned by interest as income from "other sources", the appellant shall be entitled for proportionate expenditure cost incurred in mobilizing the deposit placed in the Bank/s. What can be taxed is only the net income which the appellant earns after deducting cost and expenditure incurred and administrative expenses incurred by the assessee." 9. Respectfully following the above judgment of the Hon'ble High Court of Karna....