TaxTMI 
TaxTMI 
TaxTMI 
2025 (12) TMI 692
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....leted u/s.147 r.w.s.144 r.w.s.144B of the Act for the assessment years 2013-14, 2014-15, 2016-17 to 2018-19 by denying the benefit of deduction claimed u/s.80P(2)(d) of the Act for the interest income received from investments made with Villupuram District Central Co-operative Bank [hereinafter "VDCC"]. The reason for denying the benefit of deduction was that VDCC is not a co-operative society and only the interest income received by a co-operative society from another co-operative society alone is entitled for deduction u/s.80P(2)(d) of the Act. 4. Aggrieved by the assessment orders completed for the aforementioned assessment years, assessee filed appeals before the FAA. The FAA taking note of the Tribunal order in assessee's own case for assessment years 2011-12, 2012-13 and 2015-16 in ITA Nos.369/CHNY/2019 and ITA Nos. 409 & 410/CHNY/2020 [order dated 25.04.2022] and the judgment of the Hon'ble Jurisdictional High Court in the case of Thorapadi Urban Co-op Credit Society Ltd., Virupachipuram Urban Co-op Credit Society Ltd., vs. ITO reported in [2023] 156 taxmann.com 419 (Madras) held that assessee is entitled to deduction u/s.80P(2)(d) of the Act in respect of interest income....
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....squarely covered by the judgments of the Hon'ble Jurisdictional High Court in the case of Thorapadi Urban Co-op Credit Society Ltd., Virupachipuram Urban Co-op Credit Society Ltd., supra and CIT vs. Salem Agricultural Producers' Cooperative Marketing Society in TCA No.5/2015 dated 10.8.2016. In assessee's own case after considering the judicial pronouncements on the subject for assessment years 2011-12, 2012-13 & 2015-16 (supra), the issue in question has been decided by the Tribunal in favour of the assessee. The relevant finding of the Tribunal reads as follows: "8. We have heard both the parties, perused the materials available on record and gone through orders of the authorities below. The provisions of Sec.80P(2)(d) deals with interest or dividend income earned by Cooperative Society from its investment with any other Co-operative Society. As per the said Section, interest or dividend income earned by Co-operative Society from its deposits with any other Co-operative Society, then whole amount of such interest income is deductible u/s.80P(2)(d) of the Act. The provisions of Sec.2(19) of the Act, defines the Co-operative Society and as per the said Section, Co-operativ....
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....rial and find merit in the submission of the Ld. AR. The fact remains that the assessee is a co-operative society. It has earned the impugned interest from Dharmapuri District Co-operative Bank Ltd., which is also a co-operative society engaged in banking business. The relevant portion of the order of the Jurisdictional High Court in the case of CIT vs Salem Agricultural Producers' Cooperative Marketing Society in TCA No. 5/2015 dated 10.08.2016 is extracted as under: "6. Addressing the said issue, at paragraph No.8, in I.T.A.No.732/MDS/2014 dated 30/6/2014, the Tribunal has ordered as hereunder:- "The case of the assessee is that the income by way of interest and dividend earned by the assessee Society are from investments made in Salem District Central Co-operative Bank, which is also admittedly, a cooperative society and are allowable deduction. The Assessing Officer has held that the assessee has made only with Salem District Central Cooperative Bank and therefore, the income from investment with the Bank is not entitled for deduction under Section 80 P (2) (d) of the Act. On appeal, the ld.CIT (Appeals confirmed the order passed by the ld.CIT (Appeals). We fi....
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.... Co-operative Societies Act, the co-operative bank is statutorily required to place part of its funds in approved securities, the income attributable thereto is not taxable under Section 80 P (2) (a) (i) of the Income-tax Act, 1961. In the present case, we have noted above that under Section 57, every co-operative Society including the assessee is required by law to keep a percentage of its profits in reserve funds. These reserve funds can only be invested or deposited in a certain manner. Applying the ration of the judgment in Nawanshahar Central Co-operative Bank Ltd's case [2007] 289 ITR 6, it is apparent that any interest on such investments is required to be deducted under Section 80 P (2) (a) (i) of the Act. At para 12 of the judgment, further reiterated that .... Furthermore, the investments have been made in the H.P.State Co-operative Bank which is also a cooperative Society and, therefore, even under Section 80 P (2) (d) of the Act, interest income from investments made in any cooperative Society would also be entitled for deduction." 9. Though Mr.J.Narayanasamy, learned Senior Standing Counsel for Income Tax Department submitted that the Tribunal was....