TaxTMI 
TaxTMI 
2025 (3) TMI 1734
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....ive Society ("the assessee") for the assessment year 2017-18, assessee preferred this appeal. 2. Assessee is an employee cooperative society. While processing return of income filed by the assessee for the assessment year 2017-18, claim for deduction under section 80P(2)(a)(i) of the Income Tax Act, 1961 ('the Act') in respect of the interest derived by the assessee on deposits with banks/institutions was denied by the learned Assessing Officer on the ground that the scheduled bank from which the assessee derived such interest is not a co-operative bank. 3. Learned CIT(A) also was of the opinion that any interest income from investment with nationalized bank/scheduled bank which is not attributable to the activities specified in secti....
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....employee's cooperative society. It earned some interest income by depositing certain amounts in a scheduled bank. Though the assessee places claim before the learned CIT(A) on cooperative rural Bank (supra), learned CIT(A) did not refer to the facts of this decision not to comment on the applicability of this decision to the facts of the case. Issue relating to the interest accrued from investment with a scheduled/commercial bank whether or not attributable to the activities specified in section 80P(2)(a) of the Act, is concerned, this issue is no longer res integra. Hon'ble jurisdictional High Court considered the same in extenso in The Vavveru Co-operative Rural Bank Ltd. (supra). On a threadbare analysis of the provisions under section 8....
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.... ... ... ... ... ... ... ... ... 30. Therefore, what follows is that when a co-operative society engaged in any one of the activities stipulated in sub-clauses (i....
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....ot attributable to any one or more of the activities listed in sub-clauses (i) to (vii) of clause (a), the same may go out of the purview of clause (a), but still, the co-operative society may claim the benefit of clause (d) or (e) either by investing the income in another cooperative society or investing the income in the construction of a godown or warehouse and letting out the same. 33. In other words, the benefit conferred by clause (d) upon all types of co-operative societies is restricted only to the investments made in other co-operative societies. Such a restriction cannot be read into clause (a), as the temporary parking of the profits and gains of business in nationalised banks and the earning of interest income therefrom....
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.... of the Karnataka High Court in Totgar's Co-operative Sale Society Ltd.'s case (supra) that the business activity other than marketing of the agricultural produce actually resulted in net loss to the society. 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 profi....