TaxTMI 
TaxTMI 
2026 (6) TMI 1397
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.... Order u/s 144 r.w.s. 144B of the Act, dated 21.12.2022. Submission of Ld. AR: 2. None appeared on behalf of the assessee. We proceed ex-parte qua the assessee. Submission of Ld. DR: 3. The Ld. DR relied on the order of the Assessing Officer (AO). On specific query raised by the Bench regarding the grounds of appeal raised by the Revenue, Ld. DR could not make any submission. Findings and analysis: 4. We have heard both the parties and perused the record. In this case, admittedly, the assessee is a Co-operative Credit Society filed return of income for AY 2021-22 on 29.03.2022 declaring Nil income and claiming deduction u/s 80P of the Act. During the assessment proceedings, the Assessing Officer observed that assessee had ....
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....see was fulfilled. If AO had any doubts, the AO was free to verify submission of the assessee or was free to conduct further enquiries. In this case, AO had not conducted any enquiry and not doubted submission of the assessee. Revenue has not brought on record any documents to prove that submission of the assessee was factually incorrect. In these facts and circumstances of the case, we uphold the order of the Ld. CIT(A) deleting the addition u/s 68 of the Act. 5. Admittedly, the assessee is in the business of providing credit facilities to its members. Therefore, the assessee had claimed deduction u/s 80P(2)(a)(i) of the Act. 6. The Hon'ble Supreme Court in the case of CIT vs Karnataka State Co-operative Apex bank [2001] 251 ITR 194 ....
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.... Telangana in the case of Vavveru Co-operative Rural Bank Ltd. [2017] 396 ITR 371. 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 Totagar"s 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 gains of business attributable to any one of the activities indicated in sub-clauses (i) to (vii) of clause (a) of sub-section....
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....vestments 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 and warehouses, the respondents would have granted the benefit of deduction under clause (d) or (e), as the case may be. ....
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....law that arises for consideration before us must be answered against the Revenue and in favour of the assessee. The permissible deduction that is envisaged under Section 80P(2) of the I.T. Act for a Co-operative Society that is assessed to tax under the head of 'Profits and Gains of Business or Profession' is of the whole of the amount of profits and gains of business attributable to any one or more of its activities. Thus, all amounts as can be attributable to the conduct of the specified businesses by a Co-operative Society will be eligible for the deduction envisaged under the statutory provision. The question that arises therefore is whether, merely because the assessee chooses to deposit its surplus profit in a permitted bank o....