TaxTMI 
TaxTMI 
2025 (2) TMI 447
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.... Assessee has raised the following grounds of appeal : "1. On the facts and the circumstances of the case and in law, the Learned CPC and NFAC, erred in taxing the amount of Rs. 4,36,926/- by treating the same as income from other sources and, hence not eligible for deduction u/s 80P(2)(a)(i) or even under section 80P(2)(d) without properly appreciating the submissions filed and the provisions of the I.T. Act, 1961 and in defiance of the case of law cited of high courts and jurisdictional ITAT benches on identical facts. 2. The reasons assigned for taxing the amount of Rs. 4,36,926/- as income from other sources are wrong, insufficient and contrary to the provisions of law and facts on record and, hence, the addition made ....
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....ration certificate, bye laws, copy of balance sheet, P&L along with computation of income for the AY 2021-22, bank statement, form 26AS, details of Fixed deposits made by the assessee and other details. It is noticed from the details / information submitted by the assessee that during the previous year under consideration, the assessee has earned an interest income from loan to its members of Rs. 62,00,608/- and also earned interest income from its deposits with banks viz., M/s. Sangli District Central Co-operative Bank of Rs. 4,36,926/-. The assessee has claimed the entire interest income as deduction u/s 80P(2)(a)(i)/80P(2)(d) of the Income-tax Act, 1961. On verification, it is further noticed that the aforesaid deposits/investme....
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....or the year under consideration, out of that Assessing Officer has disallowed an amount of Rs. 4,36,926/- which is the interest earned from Sangli District Central Cooperative Bank. Thus, according to the Assessing Officer, Assessee is eligible for deduction under section 80P of the Act, except the interest earned on deposits kept with Sangli District Central Co-operative Bank. Thus, the only issue for consideration is whether interest of Rs. 4,36,926/- earned from Sangli District Central Co-operative Bank is eligible for deduction under section 80P(2)(a)(i) of the Act or not! 4.4 Thus, the issue before us is whether assessee is eligible for deduction under section 80P(2)(a) of the Act, on the interest earned from Co-operative Banks or n....
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....igh Court in Totgars, from out of which the decision of the Supreme Court arose, the assessee was carrying on the business of marketing agricultural produce of the members of the society. It is also found from paragraph-3 of the decision of the Karnataka High Court in Totgar's Co-operative Sale Society Ltd.'s case (supra) that the business activity other than marketing of the agricultural produce actually resulted in net loss to the society. Therefore, it appears that the assessee in Totgars was carrying on some of the activities listed in clause (a) along with other activities. This is perhaps the reason that the assessee did not pay to its members the proceeds of the sale of their produce, but invested the same in banks. As a cons....
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....de." Unquote. 5.1 Thus, the Hon'ble High Court of AP & TS held that Interest Income earned by investing Income derived from Business and Profession by a Co-Operative Society was eligible for deduction u/sec.80P(2)(a) of the Act. 5.2 No contrary decision of the Hon'ble jurisdictional High Court has been brought to our notice. Therefore, as per rule of precedence, the proposition of law laid down by the Hon'ble High Court of AP & TS (supra) is binding precedents for us. 6. The Hon'ble ITAT Pune Bench in the case of Kolhapur District Central Co-op. Bank Kanista Sevakanchi Sahakar Pat Sanstha Ltd. Vs. Income-tax Officer 158 taxmann.com 322 (Pune Tribunal) has held as under : Quote "7.............................I am of the con....