TaxTMI 
TaxTMI 
2025 (5) TMI 2224
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....ted 21.09.2022. The Assessee has raised the following grounds of appeal : "1. The Ld. CIT(A)-NFAC has erred in confirming the income assessed u/s 143(3) by the Ld. Assessing Officer (A.O.) NFAC, Delhi at Rs. 21,85,217/-. 2. The Ld. CIT(A)-NFAC erred in denying the deduction u/s 80P(2)(d) at Rs. 21,51,477/- for the reason that the Co-operative Banks are not the Co-operative Societies and thereby interest income earned on Deposits kept with them are not eligible for deduction u/s 80P(2)(d). 3. The Ld. CIT(A)-NFAC and Ld. AO erred in not allowing proportionate deduction of expenses incurred to earn interest income from Co-operative Banks. 4. The Ld. CIT(A)-NFAC erred by wrongly applying the provisions of Sec....
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.... ld. CIT(A), Assessee filed appeal before this Tribunal. 4.2 Admittedly, Assessee is a Co-operative Credit Society engaged in the activity of providing credit facility to its members. 4.3 Thus, the issue before us is whether assessee is eligible for deduction under section 80P(2)(a) of the Act or not! 4.4 This issue has been dealt in various decisions of ITAT Pune in favour of assessee. 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 controv....
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....ociety. 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 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 f....
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....upra) are 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 considered opinion that even the interest income earned by cooperative society on deposits made out of surplus funds with cooperative banks as well as schedule bank qualifies for deduction both under the provisions of section 80P(2)(a)(i) and section 80P(2)(d) of the Act, therefore, the reasoning given by the lower authorities on this issue cannot be accepted. Therefore, I direct the Assessing Officer to allow deduction u/s 80P(2)(a)(i) and ....
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....ety were to avail of several heads of deduction, and if it fell within any one head of deduction, it would be free from tax notwithstanding that the conditions of another head of deduction are not satisfied;(IV) This is for the reason that when the legislature wanted to restrict the deduction to a particular type of co-operative society, such as is evident from section 80P(2)(b) qua milk co-operative societies, the legislature expressly says so - which is not the case with section 80P(2)(a)(i);(V) That section 80P(4) is in the nature of a proviso to the main provision contained in section 80P(1)and (2). This proviso specifically excludes only co-operative banks, which are cooperative societies who must possess a licence from the RBI to do b....
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....fined in Section 2(19) of the IT Act, as being a co-operative society registered either under the Co-operative Societies Act, 1912 or under any other law for the time being in force in any State for the registration of co-operative societies. This, therefore, refers only to the factum of a co-operative society being registered under the 1912 Act or under the State law. For purposes of eligibility, it is unnecessary to probe any further as to whether the co-operative society is classified as X or Y. 29. Thirdly, the gross total income must include income that is referred to in sub-section (2). 30. Fourthly, sub-clause (2)(a)(i) with which we are directly concerned, then speaks of a co-operative society being "engaged in" ca....