TaxTMI 
TaxTMI 
2023 (11) TMI 28
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....d by the Income Tax Officer, Ward 1(5), Tirupur for the assessment year 2016-17 u/s. 143(3) of the Income Tax Act, 1961 (hereinafter the 'Act'), vide order dated 24.12.2018. 2. The only issue in this appeal of assessee is as regards to the order of CIT(A) confirming the action of the AO in disallowing the claim of deduction u/s. 80P(2)(d) of the Act of interest income from investment in Co-operative bank. For this, the assessee has raised the following ground No.2:- 2. The Assessing Officer as well as the learned CIT(A) erred in not considering the submissions filed by the appellant in proper perspective, more particularly the factum of interest income from the investments in co-operative banks, which are also co-operative socie....
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....0P(2)(d) of the Act on interest earned from Erode District Central Co-operative Bank by observing in para 4.3.11 as under:- "4.3.11 The appellant's reliance on the Honourble HC court judgement sin case of Totgars (quoted supra) and SBI is not found correct. Further, other decisions that have been quoted are prior to the Honourable Supreme Court decision in case of Mavilayi wherein the Apex Court made out a distinction between cooperative bank and cooperative society. Thus, while the appellant is not a cooperative bank hit by the provisions of section 80P(2)(d) and is eligible for deduction u/s. 80P(2)(a)(iv) of the IT Act, the specific income of interest from Erode District Central Co-Operative Bank is not income from its business ....
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.... Mavilayi Service Co-opertive Bank Ltd., 123 Taxmann.com 161 (SC) decided an exactly identical issue in favour of assessee by observing in para 6 & 7 as under:- 6. We noted that there are interest income from Chennai Central Cooperative Bank, gratuity interest from Chennai Central Co-operative Bank, dividend from shares of CC Cooperative Bank, BDR interest from Chennai Co-operative Bank, RF interest from CC Co-operative Bank , SRF interest from Cooperative Bank and BF interest from CC Co-operative Bank in aggregate amounting to Rs. 29,68,672/-. Admittedly, Chennai Central Cooperative Bank is a co-operative society and registered under Co-operative Society's Act of Tamil Nadu. This issue has been settled by the Hon'ble Supreme C....
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....nking Regulation Act, 1949, the Assessee cannot be considered as a Primary Cooperative Bank but it is a Primary Agricultural Credit Society because Co-operative Bank must be engaged in the business of Banking as defined in the Section 5(b) of the Banking Regulation Act, which means accepting, for the purpose of lending or investment of deposits of money from the public. Similarly, u/s. 22(1)(b) of the Banking Regulation Act, as applicable to Cooperative Societies, no Co-operative Society shall carry on in banking business in India, unless it is a Co-operative Bank and holds license issued on this behalf by the Reserve Bank of India. In the present case also, there is no banking activity and it is not registered as a Bank and it does not hol....
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....ing the Hon'ble Supreme Court decision in the case of Mavilayi Service Co-operative Bank Limited, supra,Hon'ble Madras High Court decision in the assessee's own case & S-1308, Ammapet Primary Agricultural Co-operative Bank Ltd., and the Co-ordinate Bench decision in the case of Tamilnadu Co-operative State Agriculture and Rural Development Bank Limited, supra, we dismiss the appeal of Revenue. Consequently, all the three appeals of Revenue are dismissed. 7. The facts being identical, respectfully taking this issue as covered, we direct the Assessing Officer to allow the claim of deduction u/s. 80P of the Act and allow both the appeals of assessee accordingly. 6. On the other hand, the ld.Senior DR, Shri P. Sajit Kumar, argued th....