TaxTMI 
TaxTMI 
2024 (11) TMI 1536
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..... 2.1 On verification of the case records and the assessment order, the ld. Pr. CIT found the assessee had net interest income of Rs. 1,54,34,804/- which was earned from investment in co-operative banks. Further, the assessee had also received dividend and interest on gratuity fund of Rs. 2,14,057/- from co-operative banks. After netting interest income, deduction of Rs. 1,56,48,861/- was claimed u/s. 80P(2)(d) of the Act. Further, it is found that assessee society has earned FD interest from cooperative bank, same was not shown as income from other sources. Such interest income is not eligible for deduction u/s. 80P(2)(d) of the Act. Thus, the assessment order passed by the Assessing Officer is found to be erroneous and prejudicial to the interest of revenue, thereby a show cause notice dated 27-12-2023 issued to the assessee as to why not denying the deduction claimed u/s. 80P(2)(d) of the Act. 2.2 In response, the assessee filed its reply dated 03-01-2024 as follows:- "i) The return was filed on 28/10/2018 declaring total income of Rs. NIL. IT has received co-operative bank interest of Rs 1,54,34,804/- & co-operative society dividend of Rs 33,907/- and Gratuity fu....
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....sment order dated 30-04-2021 and directed the Assessing Officer to pass fresh assessment order after treating the bank FD interest, interest on gratuity fund, dividend income as income from other sources denying deduction u/s. 80P(2)(d) on such interest income and dividend income. 3. Aggrieved against the revision order, the assessee is in appeal before us raising following grounds of appeal:- "(1) That on facts, and in law, the learned PCIT has grievously erred in exercising jurisdiction u/s 263 of the Act. (2) That the learned PCIT has grievously erred in law, and on facts, in holding that dividend/ interest received from Co-operative Bank is to be taxed as Income from Other Sources, and in further directing the AO to deny the claim of deduction made u/s 80P(2) (d) of the Act of Rs. 1,56,48,861/- in respect of such dividend/ interest received from Cooperative Bank. (3) That on facts and in law, the entire claim ought to be allowed as prayed for. (4) The appellant craves leave to add, alter, amend any ground of appeal." 4. Today is the 8th time of the hearing of the appeal, none appeared on both sides but sought for adjournment on account ....
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....8/- The AO has denied the deduction u/s 80P(2)(d) to the assessee by following the decision of Hon'ble Karnataka High Court in the case of PCIT v. Totgar Co-operative Sale Society(supra), while ld. CIT(A) had allowed the deduction by following the decision of ITAT, Ahmedabad Bench in the assessee's own case for assessment year 2016-17. The tribunal while allowing the claim of the assessee for assessment year 2016- 17(immediately preceding assessment year) has followed the decision(s) of Hon'ble Gujarat High Court in the case of State Bank of India v. CIT, reported in (2016) 389 ITR 578(Guj.) and Surat Vankar Sahakari Sangh Limited v. ACIT, reported in (2016) 72 taxmann.com 169(Guj). The Tribunal in ITA No 1404/Ahd/2019 in assessee's own case for assessment year 2016-17 allowed the relief to the assessee, by holding as under: "5.1 The issue for consideration before us is whether the assessee is eligible to claim deduction on interest earned from Co-Operative Banks u/s 80P(2)(d) of the Act. The Hon'ble Gujarat High Court in the case of State Bank of India Vs. CIT (2016) 389 ITR 578 (Guj), held that that the interest income earned by a co- operati....
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....ecision of jurisdictional High Court), in assessee's own case for assessment year 2016-17 which is immediately preceding year, and in order to maintain consistency we allow the claim of the assessee for deduction u/s 80P(2)(d) with respect to interest income earned from Co-operative Banks However none of the authorities below have given a finding that these four entities from whom the interest income is earned by the assessee are Co-operative Banks which are co-operative societies duly registered under the Co-operative Societies Act or under the State Act and to this limited extent we are directing AO to verify the facts before granting relief to the assessee While allowing the claim of the assessee, we note that principles of res judicate are not applicable to the income tax proceedings, but principles of consistency is to be maintained. Reference is drawn to the decision of Hon'ble Supreme Court in the case of Radhasoami Satsang v. CIT reported in (1992) 193 ITR 321(SC). The assessee succeeds on this issue in the manner as indicated above. We order accordingly" The Hon'ble Gujarat High Court in the case of Katlary Kariyana Merchant Sahkarı Sarafi Mandali Ltd....
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....ccordingly claimed deduction u/s 80P(2)(d)on interest/dividends received from other Co. Operative Societies as under :- ⮚Interest Received From Co-Operative Societies:- a) Sr.no Particular Amount Page i) a) BDCC Bank- Cash Certificate Interest (The Banaskantha District Central Co. Operative Bank) Regi. No. Se.24947 Date:20/08/59 32,09,488 12 ii) BDCC FDR Deposit Interest 47,48,883 12 iii) The Mehsana Urban CO. Operative Bank FDR Int. Regi No. Se-20052 Date:20/06/1983 69,26,908 13 iv) Sarvoday Commercial CO. Op. Bank Ltd Regi No.Se-20052 Date:10/04/1974 06,09,956 14 Total 1,54,95,235 All the above three Co Op. Bank are Co. Op. Societies and are registered under the Gujarat Co. Op. Societies Act. The Proof Regarding registration number and date of registration is submitted as above. Interest received from Co. Op. Societies as above 1,54,95,235 Less :- Int. Paid above Co. Op. Societies :- BDCC Bank FD/OD 030....
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....ppeals) to decide it a fresh after seeking remand report from A.O. But till date assessee has not received any information from the office of the (IT Appeal) [ Page 34 to 41] v) A.Y.2011-12 The Hon'ble ITAT, "B", Bench, Ahmedabad bearing I.T.A no 2100/AHd/2014 vide order dated 10/09/2018 has dismissed the appeal of the assessee [Page 42 to 54] But being mistake apparent on record within the meaning of Section 254(2) of the Act, the advocate has filed the Misc. Application 38/2019 dated 31/01/2019. But till date the matter is pending before Hon'ble ITAT. [Page 55 to 60]. vi) A.Y. 2017-18 The claim of the assessee u/s 80P(2)(d) of Rs.1341775/- is disallowed by the A.O. The Assessee has preferred appeal on 06/07/2019 before the CIT(A) and matter is still pending before Honourable CIT (Appeals). vii) In support of our claim for deduction u/s 80P(2)(a)(i) and 80P(2)(d) of the Act, the assessee begs to rely upon the following judicial decisions. There are judgements of Hon'ble Gujarat High Court which being judgements of Jurisdictional High Court are binding in nature. vii) Similar addition was made in ca....