TaxTMI 
TaxTMI 
2024 (6) TMI 1594
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Co-Operative Sale Society, wherein Hon'ble Court has clearly distinguished Co-operative Bank from Cooperative Societies. 4. CIT(A)failed to appreciate that in judgment pronounced by the Supreme Court's decision in case of Mavilayi Service Cooperative Bank Ltd V. CIT, Calicut, wherein the cooperative banks are excluded from ambit of section 80P. 2. (b) On the facts and circumstances of the case and in law, the Hon'ble CIT(A) NFAC failed to appreciate the provisions of section 80P(4) which are quoted hereunder: "(4) The provisions of this section shall not apply in relation to any cooperative bank other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. Even the definition, as contained in section 2(19) of the Income tax Act, 1961, speaks only of "Co-operative Society" and not a "Co-operative Bank." Further, as per Banking Regulation Act, 1949. Co-operative Bank means a State Co-operative Bank, a Central Co-operative Bank and a Primary Co operative Bank, in case of which: i. The primary object or principal business of which is the transaction of banking business 3. The Appellant craves leave to add....
X X X X Extracts X X X X
X X X X Extracts X X X X
....)[NFAC]. Ld. CIT(A) partly allowed appeal of the assessee. Aggrieved by the order of the Ld. CIT(A), assessee has filed appeal before the ITAT. 5. The assessee had claimed deduction u/sec. 80P(2) for the interest earned from various Co-operative Banks & Bandhan Bank, ICICI Bank. In this case, the AO has ignored most important submission of the assessee that the Assessee is a Co-Operative Society registered under Maharashtra State Co-Operative Society Act and it is under the control of Registrar of Co-Operative Society Maharashtra State. The Assessee also submitted that surplus funds were invested to earn interest and such interest income is linked to business of the assessee and hence it is part of the Profit which is eligible for deduction u/sec. 80P(2)(a)(i) of the Act. Thus, it is clear from the submission of the assessee that the assessee had claimed deduction u/sec.80P(2)(a)(i) of the Act. However, the assessee without prejudice had also claimed deduction u/s 80P(2)(d) of the Act. In these facts, we have to understand the case of the assessee. Thus, the issue before us is whether the impugned interest earned by the Assessee is eligible for deduction u/s 80P(2)(a)(i) of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er : 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 (2) of section 80P or not. 9. While the petitioners place strong reliance upon a decision of the Division Bench of this court in CIT v. Andhra Pradesh State Co-operative Bank Ltd. [2011] 12 taxmann.com 66/200 Taxman 200/336 ITR 516, the Revenue places strong reliance upon the decision of the Supreme Court in Totgar's Co-operative Sale Society Ltd. v. ITO [2010] 188 Taxman 282/322 ITR 283. ........................ 34. The case before the Supreme Court in Totgar's Co-operative Sale Society Ltd.'s case (supra) was in respect of a co operative credit society, which was also marketing the agricultural produce of its members. As seen from the facts disclosed in the decision of the Karnataka High Court in Totgars, from out of which the decision of the Supreme Court arose, the assessee....
X X X X Extracts X X X X
X X X X Extracts X X X X
....)(a) of the Act. 5.7 Bigar The ITAT Pune Bench in the decision of Ajayshree Gramin Sheti Sahakari Patasanstha Maryadit No.1427/PUN/2023 order dated 08.03.2024 held as under : "3.1 We observed that the issue is covered by ITAT Pune Bench's order in the case of Sumitra Gramin Bigar Sheti Sahakari Pat Sanstha Maryadit Mahaveer Path for A.Y. 2008-09 which has decided the same issue in favour of assessee in ITA No. 2476/PUN/2016. In that case assessee had received interest income from fixed deposits kept with Nationalized Banks. The ITAT Pune Bench in para 5 has held as under : "5. With regard to this issue, the Ld. AR of the assessee at the time of hearing submitted that ground No.1 is already decided in favour of the assessee by the decision of the Co-ordinate Bench of the Tribunal, Pune in ITA No. 589/PUN/2016 for the assessment year 2012-13 in the case of ITO Vs. Sureshdada Jain Nagri Sahakari Patsanstha, therein, in Para 2 of the order, the issue is as under: "2. The only grievance projected by the Revenue in its appeal is against the allowing of deduction u/s.80P of the Income Tax Act, 1961 (hereinafter also called as 'the Act') in respect of in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s is identical to the issue decided by ITAT Pune Bench in Sumitra Gramin Bigar Sheti Sahakari Pat Sanstha Maryadit Mahaveer Path(supra) in ITA No. 2476/PUN/2016 for A.Y. 2008-09 (supra) i.e. interest income earned on fixed deposits. The Hon'ble Madras High Court in the case of Thorapadi Urban Co-operative Credit Society Ltd., Vs. ITO 296 Taxman 250 (Madras) vide order dated 10.10.2023 held that the assessee was eligible for deduction under section 80P(2)(d) of the Act on the Interest Received from Co-operative Banks. No direct decision of the Hon'ble Jurisdictional High Court has been brought to our notice. Therefore, respectfully following the above precedent and adopting the detailed reasoning above, we direct the Assessing Officer to allow deduction under section 80P(2) of the Act for the impugned income discussed in earlier para. Accordingly, grounds of appeal raised by the assessee are allowed." 6. Ld. DR has not brought to our notice any direct decision of the Hon'ble Jurisdictional High Court. Therefore, respectfully applying the proposition of law laid down by Hon'ble High Court of Andra Pradesh and Telangana (supra) and ITAT Pune (supra) to the facts of th....