2026 (3) TMI 335

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.... and bad in law as the same is opposed to the facts of the case and provisions of law. 2. The CIT(A) erred in confirming the disallowance of deduction u/s. 80P of Rs. 5,28,284/-, without appreciating that the appellant is a registered weavers' co-operative society engaged in cottage industry. 3. The CIT(A) failed to appreciate that the deposits with the Erode District Central Co-operative Bank were statutory and business linked, and the interest therefrom qualifies for deduction under Section 80P 4 The CIT(A) erred in denying deduction under Section 80P on interest from the Erode District Central Co-operative Bank, overlooking that the said bank is a co-operative society within the meaning of Section 2(19) of ....

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....ng Officer denied the deduction u/s 80P(2)(d) of the Act in respect of interest income of Rs. 5,27,087/- from Co-operative Bank on deposits made out of surplus funds by holding that such interest income does not qualify for deduction u/s 80P(2)(d) of the Act and is hit by provisions of sub-section (4) of section 80P of the Act. 4. Being aggrieved by the above assessment order and, an appeal was preferred before ld. CIT(A) who vide impugned order confirmed the action of the Assessing Officer placing reliance on the decision of Hon'ble Supreme Court in the case of Totgars Co-operative Sale Society Ltd. Vs. ITO (2010) 188 Taxmann 282 (SC). 5. Being Aggrieved by the above appeal, the appellant is in appeal before us in the present appeal,....

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....9. It would be appropriate to extract hereunder the relevant portion of section 80P(2)(d). "80 P. Deduction in respect of income of co-operative societies: (1) (2) The sums referred to in sub-section (1) shall be the following, namely:- (a) to (c)** (d) "in respect of any income by way of interest or dividends derived by the cooperative society from its investment with any other co-operative society, the whole of such income" 9.1 A reading of the above said provision makes it clear that in the event if any Co-operative Society derived income by way of interest from investment made in any other Co-operative Society the whole such interest is eligible for deduction. Now the issue is as to ....

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.... (supra), wherein the issue came up for consideration as to whether the interest income received by a Co-operative Bank from its members by way of providing the credit facilities to its members is eligible for deduction or not. Ultimately the Hon'ble Surpeme Court found that under section 80P(2)(4)(1), the same is eligible for deduction. Therefore, the law laid down by the Hon'ble Supreme Court is not applicable for in the present case as the eligibility of deduction of interest has to be decided under section 80P(2)(d) and not under section 80P(2)(a)(i). The learned counsel has also relied upon other judgments which are not applicable for the present facts of the present case. 12. At this juncture, it would be appropriate ....