TaxTMI 
TaxTMI 
2026 (5) TMI 1342
X X X X Extracts X X X X
X X X X Extracts X X X X
....Delhi [ the Ld. CIT (A) ] dated 20.06.2025 by separate orders for all these assessment years wherein the Appeals of the Assessee were dismissed. 2. Assessee is aggrieved and the only issue involved is the allowability of deduction u/s. 80P as well as the confirmation of disallowance of various expenses. 3. The brief facts of the case show that Assessee is a primary agricultural cooperative society registered under the Karnataka Cooperative Societies Act, 1959 with the primary object of providing credit facilities to its members by lending loans and accommodating deposits. 4. For AY 2017-18 The Assessee filed its return of income on 27.10.2017 at a gross total income of Rs. 53,19,074/- and returned income of Rs. 1,46,620/- after cla....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n of Rs. 78,87,620/-. Further, the Ld. Assessing Officer noted that that there are certain provisions of agricultural fund etc., of Rs. 16,00,308/-. The Ld. Assessing Officer further asked the Assessee to give proportionate working of interest income earned by the Assessee for the purpose of giving deduction u/s. 80. On that basis, he found that a sum of Rs. 5,08,766/- is the cost of fund of interest income of Rs. 48,33,774/- and taxed the balance sum of Rs. 43,25,008/- under the head income from other sources and consequently denied the deduction u/s. 80P of the Act. With respect to the provision of excess interest and provision of expenses was also denied holding that Assessee is maintaining books of accounts on accrual basis. However, th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....017-18, the Assessee pleaded that its claim is deduction u/s. 80P(2)(a)(i) of the Act, the issue is covered by the decision of the Hon'ble Karnataka High Court in favor of the Assessee. However, the Ld. CIT(A) dismissed the Appeal of the Assessee. Further, the disallowance of excess interest expenditure and disallowance of provision for expenses was also sustained. 12. Similarly, for other Assessment Years also, Assessments of the Assessee were confirmed. 13. The Assessee aggrieved in all these 3 Appeals has submitted a paper book containing 59 pages. The submission of the Assessee with respect to the Assessment Year 2017-18 is that the Assessee is a credit cooperative society and is eligible for deduction u/s. 80P(2)(a)(i) of the Act....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rs Co-operative Sale Society [2017] 83 taxmann.com 140 (Karnataka)/[2017] 395 ITR 611 (Karnataka)/[2017] 297 CTR 158 (Karnataka)[16-06-2017] on the issue of section 80P(2)(d)of the Act squarely covers the issue against the Assessee. 17. We have carefully considered the rival contentions and perused the orders of the Ld. lower authorities and decision relied upon by the parties. 18. We find that Assessee is a credit member's cooperative society. It deals with only its members; the amount of funds deposited in the bank account is also part of the reserve funds of the Assessee and further the interest income earned on the bank is also part of the business income of the Assessee. There is no evidence placed by the Ld. lower authorities th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tributable to the activity of carrying on the business of banking or providing credit facilities to its members by a co-operative society and is liable to be deducted from the gross total income under section 80P. As the interest income the amount which was invested in banks to earn interest was not an amount due to any members. It was not the liability. It was not shown as liability in their account. In fact, this amount, which is in the nature of profits and gains, was not immediately required by the assessee for lending money to the members, as there were no takers. Therefore, they had deposited the money in a bank so as to earn interest. The said interest income is attributable to carrying on the business of banking and therefore it is ....