2018 (4) TMI 1990

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....nks? 2. The assessee is a housing co-operative society. It earned interest income of Rs. 30.91 lakhs from deposits kept with co-operative banks. The assessee claimed it as deductible u/s 80P(2)(d) of the Act. The AO rejected the claim on the ground that interest received from other co-operative societies alone is deductible u/s 80P(2)(d) of the Act and since the word "Bank" is not there in the above said section, the assessee is not eligible for deduction u/s 80P(2)(d) of the Act. The Ld CIT(A) also upheld the same. 3. We heard the parties on this issue and perused the record. We notice that an identical issue was considered by the co-ordinate bench in the case of Lands End Co-operative Housing society Ltd Vs. ITO (ITA No. 3566/Mum/20....

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....poses of better proper understanding of these two provisions the relevant extract of the section are reproduced below: 80P: Deduction in respect of income of co-operative Societies. 1. Where, in the case of an assessee being a co-operative society, the gross total income, includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee. 2. The sums referred to in sub-section (1) shall be the following, namely:- (a)In the case of a co-operative society engaged in- (i) Carrying on the business of banking or providing credit facilities to ....

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....assessee's case in the light of the decision of the Hon'ble Supreme court. The Hon'ble Supreme Court in the case of Totagar's Co- operative Sale Society Ltd.(Supra) held that a society has surplus funds which are invested in short term deposits where the society is engaged in the business of banking or providing credit facilities to its members in that case the said income from short term deposits shall be treated and assessed as income from other sources and deduction u/s 80(P)(2)(a)(i) would not be available meaning thereby that deduction u/s 80(P)(2)(a)(i) is available only in respect of income which is assessable as business income and not as income from other sources. Whereas in distinction to this , the provisions of s....