TaxTMI 
TaxTMI 
2024 (4) TMI 597
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.... u/s 80P(2)(d), particularly when there was a binding precedent emerging from the facts. (2) Alternatively, the CIT(A) ought to have granted relief u/s 80P(2)(a)(i) of the Act. (3) The learned CIT(A) grossly erred by narrating the entire facts of AY. 2018-19, in the appeal he was dealing for the AY.2017-18. (4) All of the above grounds are prejudice to one another. (5) The appellant craves leave to add, alter or vary any of the grounds of appeal." 3. The appeal filed by the assessee in ITA No.115/SRT/2024, for AY. 2017-18, is barred by limitation by 386 days. The assessee moved a petition for condonation of delay, requesting the Bench to condone the delay. The contents of the petition for condonation of delay are reproduced below: "I, Jatin bhai Hasmukh bhai Topiwala aged 73 years of 7, Ganesh krupa Co. op. Housing Society, Ichhanath Road, Athwalines, Surat-395007 state on solemn affirmation as under: (1) I hold PAN of AARPT2526M with the Income Tax Department Surat. (2) I am the President of Begumpura Nagrik Dhiran Sahakari Mandali Ltd (Co. op Society). (3) For A.Y. 2017-18, appeal of the Co. op Society bef....
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....itted that it is a covered case and this Tribunal has allowed in many cases the deduction under section 80P(2)(d) of the Act in respect of interest received from Co-operative Bank. Therefore, deduction claimed by the assessee u/s 80P(2) (d) of the Act, in respect of interest received from Co-operative Bank should be allowed. 8. On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. 9. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. We note that issue under consideration is no longer res judicata and the interest received from Co-operative Bank is allowable deduction under section 80P(2)(d) of the Act, for that reliance is placed on the decision of the Hon`ble Jurisdictional High Court of Gujarat in the case of Surat VankarSahakari Sangh Ltd,....
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....he bank on the fixed deposits. The assessees were therefore right in the submissions which they made before the Commissioner of Income-tax in the revision petitions which they filed. This aspect of the matter has been overlooked by the Commissioner in passing the order, exhibit P-5.' 8.1 Similarly, in the case of Doaba Co-operative Sugar Mills Ltd (supra), the Punjab & Haryana High Court has held as under: '5. The contention of Mr. Gupta, learned counsel appearing for the Revenue, is that the Tribunal was wrong in allowing deduction under Section 80P(2) (d) of the Act because it is not established that the assessee had derived the interest by investing all the amount of surplus funds. It is further contended by Mr. Gupta that the assessee has paid interest to Jalandhar Central Cooperative Bank and has also received interest from the said co- operative bank, thereby showing that the assessee has on the aggregate paid interest to the bank and, therefore, no deduction under Section 80P(2)(d) can be allowed. To appreciate this argument, we have to look to the provisions of Section 80P(2)(d) of the Act, For facility of reference, it is reproduced as under : ....
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.... of the assessee.' 8.2 Moreover, the Bombay High Court in the case of Bai BhuribenLallubhai (supra) has held that the purpose for which the assessee borrowed money had no connection whether direct or indirect with the income which she earned from the fixed deposit and that she was not entitled to the deduction claimed under Section 12(2). The High Court held that if an assessee had no option except to incur an expenditure in order to make the earning of an income possible, then undoubtedly the exercise of that option is compulsory and any expenditure incurred by reason of the exercise of that option would come within the ambit of section 12(2) of the Indian Income-Tax Act but where the option has no connection with the carrying on of the business or the earning of the income and the option depends upon personal considerations or upon motives of the assessee, that expenditure cannot possibly come within the ambit of Section 12(2). In the present case, the loan was taken for business purpose more particularly purchase of yarn and not for fixed deposits. 9. In view of the above, the questions raised in the present appeals are answered in favour of the assessee an....