TaxTMI 
TaxTMI 
2025 (4) TMI 1836
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessee during the AY under consideration, had earned interest income of Rs. 22,12,321/- from MDCC Bank, Saraswat Bank and TGSP Bank and claimed the same as deduction u/s 80P(2)(d) of the Act which was disallowed by the assessing officer while relying on certain decisions such as Totgar's Co-operative Sale Society Ltd. Vs. ITO [2010] 322 ITR 283 (SC) etc. and by holding that the Assessee is neither entitled to get deduction u/s 80C (2) nor u/s 80P(2)(a)(i). The assessing officer ultimately added the said amount in the total income of the assessee. 3. The Assessee being aggrieved, challenged the said addition before the Ld. Commissioner, however, of no avail and the Ld. Commissioner on similar reasoning given by the assessing officer,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion to an Assessee being a Co-operative Society. Further, section 80P(2)(d) of the Act, reads as under: "80P. 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) ..... (b) ..... (c) ..... (d) in respect of any income by way of interest or dividends derived by the cooperative society from its investments with any other co-operative society, the whole of such income;" 10. Thus, for the purpose of provisions of section 80P(2)(d) of the Act, two conditions are required to be cumulatively satisfied- (i) income by way of interest or dividend is earned by the Co-operative Society ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rvice Cooperative Bank Ltd. vs CIT, Calicut, [2021] 431 ITR 1 (SC) while analyzing the provisions of section 80P(4) of the Act held that section 80P(4) is a proviso to the main provision contained in section 80P(1) and (2) and excludes only Cooperative Banks, which are Co-operative Societies and also possesses a licence from RBI to do banking business. The Hon'ble Supreme Court further held that the limited object of section 80P(4) is to exclude Co-operative Banks that function at par with other commercial banks i.e. which lend money to members of the public. Thus, we are of the considered view that section 80P(4) of the Act is of relevance only in a case where the Assessee, who is a Co-operative Bank, claims a deduction under section 80P o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in agreement with the observations of the lower authorities that with the insertion of Sub-section (4) of Sec. 80P, vide the Finance Act, 2006, with effect from 01.04.2007, the provisions of Sec. 80P would no more be applicable in relation to any co-operative bank, other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank, but however, are unable to subscribe to their view that the same shall also jeopardize the claim of deduction of a cooperative society under Sec. 80P(2)(d) in respect of the interest income on their investments parked with a co-operative bank. We have given a thoughtful consideration to the issue before us and are of the considered view that as long as it is proved ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rned by the Assessee, a Co operative Society, from surplus deposits kept with a Cooperative Bank, was not eligible for deduction under section 80P(2)(d) of the Act. We find that in an earlier decision the Hon'ble Karnataka High Court in Pr. CIT v/s Totagars Co-operative Sales Society, [2017] 392 ITR 74 (Karn.) held that according to section 80P(2)(d) of the Act, the amount of interest earned from a Co-operative Society Bank would be deductible from the gross income of the Co-operative Society in order to assess its total income. Thus, there are divergent views of the same Hon'ble High Court on the issue of eligibility of deduction under section 80P(2)(d) of the Act in respect of interest earned from Co-operative Bank. No decision of the Hon....