TaxTMI 
TaxTMI 
2025 (6) TMI 2146
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....19 and 2020-21 respectively. For the sake of convenience, these two appeals were heard together and are being disposed of by this common order. We treat appeal in ITA No. 679/PUN/2025 as "lead case". The Assessee has raised following grounds of appeal : "1. On the facts and circumstances of the case, the Ld CIT(A) erred in not allowing claim of deduction u/s 80P(2)(a)(i) of the Income tax act 1961 to the extent of Rs. 22,09,794/- 2. On the facts and circumstances of the case and in law, the Ld CIIT(A) erred in not allowing claim of deduction u/s 80P(2)(d) of the Income tax act 1961 so far as it relates to interest earned on deposits with cooperative banks. 3. On the facts and circumstances of the case and in law, ....
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....he ld. CIT(A), Assessee filed appeal before this Tribunal. 4.2 The issue before us is whether assessee is eligible for deduction under section 80P(2)(a) of the Act, on the interest earned from Co-operative Banks or not. 4.3 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 Totagars 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 t....
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....is 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 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 s....
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....301 Taxman 36 (Kerala) vide order dated 04.09.2024 has held as under : Quote "7. On a consideration of the rival submissions, we are of the view that for the reasons stated hereinafter, the question of 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....
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....ade from its principal activity of providing credit facilities to its members. The nature and character of the principal income [profits earned by the assessee from its lending activity] does not change merely because the assessee acted in a prudent manner by depositing that income in a bank, instead of keeping it in hand. The provisions of the I.T. Act cannot be seen as intended to discourage prudent financial conduct on the part of an assessee." Unquote 5.1 Thus, even Hon'ble Kerala High Court has held that the character of income does not change. The Hon'ble Kerala High Court held that interest earned from deposits in permitted banks will be eligible for deduction u/s.80P of the Act. The Hon'ble Kerala High Court's dec....
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....#39;ble High Court of Judicature at Bombay in ITA No.933/2017, by which the High Court has dismissed the said appeal preferred by the Revenue. 7. The Hon'ble Bombay High Court's order in ITA No.933/2017 dated 14.10.2019 in the case of Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Ltd., emanates from the ITAT order in ITA No. 2515/MUM/2014 dated 20.05.2016. The facts recorded in the ITAT order in ITA No.2515/MUM/2014 are that Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Ltd., is a Co-operative Credit Society registered under the Maharashtra Co-operative Society Act, had claimed deduction under section 80P(2)(d) of the Income Tax Act, 1961 as well as Rs.5,85,57,676/- claimed under section 80P(2)(a)(i) of the Act. The Assessi....