TaxTMI 
TaxTMI 
2025 (6) TMI 2088
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....22. The Assessee has raised the following grounds of appeal : "1. On the facts and in the circumstances of the case and in law the learned Assessing Officer erred in rejecting deduction under section 80P (2)(a)(1) for a sum of Rs. Rs. 41,85,956/- being Gross total income of appellant society without appreciating the fact that earning of interest is an integral part of society's business and appellant prays for allowing such deduction. 2. On the facts and in the circumstances of the case and in law the learned Assessing Officer erred in treating the interest received from investment as income from other sources by rejecting appellant's contention that said interest income is integral part of business activity and yo....
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....4. We have heard both the parties and perused the material placed before us. 4.1 There is a delay of 229 days in filing appeal before this Tribunal. We have perused the Affidavit filed by the assessee and are convinced that there is sufficient and reasonable cause for Delay. Accordingly, the Delay is condoned. 4.2 Admittedly, Assessee is a Co-operative Credit Society duly registered under Maharashtra Co-operative Societies Act. The copy of the Registration Certificate is at page no.1 of the paper book. During the year, Assessee had filed Return of Income on 30.12.2020 declaring total income at Rs. NIL and claiming deduction u/s.80P of the Act. Assessing Officer(AO) noted that Assessee has earned interest income from Co-operative Banks....
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....essment order itself. 4.4 Be it as it may be, 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 not 4.5 The Hon'ble High Court of Andhra Pradesh and Telangana in the case of Vavveru Co-operative Rural Bank Ltd. [2017] 396 ITR 371 analysed the provisions of Section 80P, succinctly distinguished the decision of Hon'ble Supreme Court in the case of Totagars Cooperative Sale Society, and held as under : Quote,"8. Therefore, the real controversy arising in these writ petitions is as to whether the income derived by the petitioners by way of interest on the fixed deposits made by them with the banks, is to be treated as profits and....
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....did not pay to its members the proceeds of the sale of their produce, but invested the same in banks. As a consequence, the investments were shown as liabilities, as they represented the money belonging to the members. The income derived from the investments made by retaining the monies belonging to the members cannot certainly be termed as profits and gains of business. This is why Totgar's struck a different note. 35. But, as rightly contended by the learned senior counsel for the petitioners, the investment made by the petitioners in fixed deposits in nationalised banks, were of their own monies. If the petitioners had invested those amounts in fixed deposits in other co-operative societies or in the construction of godowns ....