2023 (12) TMI 1315

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....2/2019 passed by the ITO, Ward-7(2)(4) u/s 143(3) of the Act for assessment year 2017-18 wherein and where under the deduction u/s 80P(2)(a)(i) of the Act claimed by the assessee has been allowed. 2. The assessee before us is a cooperative society engaged in the business of extending credit facility and accepting deposits from its members, registered under Karnataka Cooperative Societies Act and has been assessed to Income-tax from year to year and also was allowed deduction u/s 80P(2)(a)(i) of the Act. In this particular year under consideration, the assessee kept various fixed deposits in credit State Cooperative Apex Ltd., and also other banks out of its surplus fund and earned interest to the extent of Rs.2,78,23,521/-. 3. However....

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....from the investment with the other co-operative societies which is exempt u/s. 80P(2)(a)(i) of the Act. The assessee relied upon the judgement passed by the Hon'ble jurisdictional High Court in case of M/s. Guttigedarara Credit Cooperative Ltd. in ITA No. 29 of 2015 on this aspect. The case further made out by the assessee is that the fixed deposits were made out of the money not required by the society immediately for lending. Further that this was also not out of the money due to the members. In that view of the matter, the interest earned from such investment was attributable to the carrying out of the business of the appellant society and the judgment mentioned hereinabove in case of M/s. Guttigedarara Credit Co-operative Ltd. (supr....