TaxTMI 
TaxTMI 
2024 (7) TMI 34
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....se and in law, the learned CIT Appeal, erred in disallowing the deduction of Rs. 41,65,363/- on account of interest income earned out of fixed deposit with Cooperative/ Nationalised Bank and which is eligible for deduction u/s 80P(2)(d) or 80P(2)(a)(i) of the IT Act. 2. On the facts and in the prevailing circumstances of the case and in law, the learned CIT Appeal, erred in not following the jurisdictional ITAT Pune, decision on the similar issue which is binding on the lower Authorities as per the law laid down by Hon'ble Bombay High Court in the case of Bank of Barada vs H C Srivastava (256 ITR 385) and thus the total deduction of Rs. 41,65,363/- disallowed u/s 80P(2)(a)(i) or 80P(2)(d) of the IT Act was not justified. ....
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....e have heard ld.Departmental Representative(ld.DR) for the Revenue and perused the records. It is mentioned in the assessment order that the assessee is a Credit Co-operative Society registered under Maharashtra Co-operative Societies Act. The prime function of the society is accepting deposits and advancing loans to the members. During the A.Y.2020-21, the assessee has earned an interest income of Rs. 41,65,336/- from investments with various co-operative banks/banks as under: Sr No Particulars Amount 1 NDCC Bank FDR 1019080 2 Namco Bank FDR 22581234 3 Dena Bank FDR 2303770 4 Thane Janata Sahakari Bank FDR 10412817 5 Shamrav Vitthal Co-operative Bank FDR 10636209 6 Saraswat Co-ope....
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....t facility to its members. Assessee had earned interest by depositing surplus funds which were not immediately required. 6.2 The Hon'ble High Court of Andhra Pradesh and Telangana in the case of Vavveru Co-operative Rural Bank Ltd. [2017] 396 ITR 371 analysed the provisions of Section 80P, succinctly distinguished the decision of the Hon'ble Supreme Court in the case of Totagar Cooperative Sale Society, and held as under : Quote, "8. Therefore, the real controversy arising in these writ petitions is as to whether the income derived by the petitioners by way of interest on the fixed deposits made by them with the banks, is to be treated as profits and gains of business attributable to any one of the activities indicated in sub-cl....
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....d the same in banks. As a consequence, the investments were shown as liabilities, as they represented the money belonging to the members. The income derived from the investments made by retaining the monies belonging to the members cannot certainly be termed as profits and gains of business. This is why Totgar's struck a different note. 35. But, as rightly contended by the learned senior counsel for the petitioners, the investment made by the petitioners in fixed deposits in nationalised banks, were of their own monies. If the petitioners had invested those amounts in fixed deposits in other co-operative societies or in the construction of godowns and warehouses, the respondents would have granted the benefit of deduction under....