2024 (8) TMI 164

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.... the assessment year (AY) 2017- 18. 2. The grounds of appeal raised by the assessee are as under: "1. On the facts and in the circumstances of the case as well as law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in indirectly restoring the case to the AO with direction. 2. On the facts and in the circumstances of the case as well as the law on the subject, the learned Commissioner of the Income Tax (Appeals) has erred in directing to the AO that to ensure that no deduction u/s 80P(2)(d) is allowed on interest/dividend income earned from a Schedule bank. 3. On the facts and in the circumstances of the case as well as the law on the subject, the Ld. AO has erred in making additio....

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....ted for limited scrutiny to examine the issue of deduction under Chapter VI-A. The assessee in its computation of income claimed deduction of Rs. 29,86,311/- on account of interest earned on fixed deposit and Rs. 15/- from dividend income received from Surat District Co-operative Bank Ltd. The assessee also claimed deduction of income of Rs. 25,97,535/- earned on account of business of banking by providing credit facilities to its member, under section 80P(2)(a)(i) of the Act. A show-cause notice was issued on 16.09.2019 to the assessee for seeking explanation to substantiate such deduction. In response to the show-cause notice, the assessee filed its reply. The contents of reply filed by the assessee are recorded in para-4 of assessment or....

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....sessee is Co-operative Credit Society and funds are invested only in fixed deposit and interest income earned from the fixed deposit with Surat District Co-Operative Bank, is eligible for deduction u/ 80P(2)(d) of the Act. The assessee further submitted that as per section 80P(2)(d) of the Act interest income earned from the investment with the Co-operative Society is eligible for deduction u/s 80P(2)(d) of the Act and direction of Ld. CIT(A) is wrong and interest received from Surat District Cooperative Bank is eligible for deduction u/s 80P(2)(d) of the Act. To support his contention, the Ld. AR relied upon the following case laws: i. Surat Vankar Sahakari Sangh Ltd. vs. ACIT, (2016) 72 taxmann.com 169 (Guj. HC) ii. PCIT....

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..... vs. ACIT ( supra) as well as by decisions of this Tribunal in favour of assessee including in the case of Vishal Co-operative Housing Services Society Limited vs. ITO, in ITA No.886/SRT/2023, dated 22.02.2024 (Surat - Trib.), wherein it was held that Co-operative Banks are primarily the Cooperative Society and the interest earned on deposit with Co-operative banks are eligible for deduction under section 80P(2)(d) of the Act. Similar, view was taken in assesses own case for AY 2014-15 in ITA No.151/SRT/2019, dated 31.03.2022. Having gone through the order of Co-ordinate Bench (supra), we see no reason to take a different view from the view taken by the Co-ordinate Bench (supra). 8. So far as direction of ld CIT(A) in para 3.8.1 is conc....