TaxTMI 
TaxTMI 
2025 (3) TMI 2084
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.... of interest receipt from Cooperative Bank under section 80P(2)(d) of the Act and with the consent of both the parties, the appeal in ITA No. 271/Chny/2025 for assessment year 2016-17 is taken as lead case for adjudication. 3. Brief facts of the case are as follows: 4. The assessee, a cooperative society registered under the Multi State Cooperative Act, 2002, filed its return of income for the assessment year 2016-17 admitting taxable income of Rs. 6,24,860/-. The assessee is engaged in the business of extending credit facility to its members and had earned a gross total income of Rs. 5,03,66,025/- and claimed deduction under section 80P of the Act to an extent of Rs. 4,97,41,161/- and the balance of Rs. 6,24,860/- was offered to tax. The Assessing Officer noted that the said income offered to tax relates to income earned by way of interest on deposits held in Nationalized Banks which are ineligible for deduction under section 80P(2)(d) of the Act. The business income of the assessee of Rs. 4,97,41,161/- was claimed as deductible under section 80P(a)(i) of the Act. Thus, the case was selected for 'limited scrutiny' to examine the correctness of claim of deduction under sectio....
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....een referred and contended that the assessee is eligible to claim deduction of interest earned out of deposits from CCCB under section 80P(2)(d) of the Act. Thus, the assessee has conclusively submitted before the ld. CIT(A) that the decision in the case of Citizen Cooperative Society Ltd. reported in 88 Taxmann.com 114 SC is not applicable and the assessee society has not violated the law laid down in the case of The Mavilayi Services Cooperative Bank Ltd. & Ors v. CIT in Civil Appeal Nos. 7343-7350 of 2019 and prayed to follow the decision of the Coordinate Benches of the Tribunal in the case of ACIT v. DAEE Cooperative T & C Society to delete the addition made by the Assessing Officer. 6. After considering the submissions of the assessee and relying upon the decision of the Hon'ble Supreme Court in the case of The Mavilayi Services Cooperative Bank Ltd. & Ors v. CIT (supra), the ld. CIT(A) held that the assessee is entitled to the benefit of section 80P(2)(a)(i) of the Act. So far as, eligibility of claim of deduction under section 80P(2)(d) of the Act, the ld. CIT(A) has observed that the interest income earned from any Cooperative Society having a banking license or from an....
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....amuthur Primary Agricultural Cooperative Credit Society v. ITO in ITA Nos. 1040 & 1041/Chny/2024 dated 18.09.2024 v) M/s. Kangayam primary Agricultural Cooperative Credit Society v. ITO in ITA No. 869/Chny/2023 dated 11.10.2023 10. Per contra, the ld. DR supported the order passed by the ld. CIT(A). 11. We have heard both the parties, perused the material available on record and gone through the orders of authorities below. The assessee has claimed deduction under section 80P(2)(d) of the Act. However, the ld. CIT(A) and the Assessing Officer denied the claim of deduction under section 80P(2)(d) of the Act for the reason that the interest earned out of fixed deposit is an income from other than a co-operative society having no banking license irrespective of its predominant activities of providing credit facilities or banking whatsoever. The main contention of the assessee is that the fixed deposits received from the Members (liability) are the source for the fixed deposits (asset) kept in the Cooperative Banks and it is nothing both stock-in-trade in the case of trading business and the interest earned out of fixed deposit is an integral part of the business income ....
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....entral Excise Staff Co-op. Thrift and Credit Society Ltd. v. ITO in ITA Nos. 111 & 112/Chny/2023 dated 31.03.2023 wherein, various decisions relied upon, while considering the appeal of the assessee, the Tribunal has followed the decision of the Hon'ble Jurisdictional High Court in the case S-1308, Ammapet Primary Agricultural Co-operative Bank Ltd. in T.C.A. Nos. 882 and 891 of 2018 and therefore, the observations of the Hon'ble High Court is reproduced hereinbelow for better understanding: "5.1 Further, this issue is now covered by the Co-ordinate Bench decision in the case of Tamilnadu Co-operative State Agriculture and Rural Development Bank Limited, in ITA Nos.31 to 33/Chny/2021, order dated 29.04.2022, wherein we have already considered the decision of Hon'ble Supreme Court in the case of Mavilayi Service Co-operative Bank Limited vs. CIT, Calicut reported in [2021] 123 Taxmann.com 161 (SC) and held as under:- 30. In view of the above facts discussed and the case-laws of the Hon'ble Supreme Court in the case of Mavilayi Service Co-operative Bank Limited vs. Commissioner of Income Tax, Calicut (supra), we are of the view that the Assessee is a Co-operative So....
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....uarely covered and the facts are identical to the above referred case laws, respectfully following the Hon'ble Supreme Court decision in the case of Mavilayi Service Co-operative Bank Limited, supra, Hon'ble Madras High Court decision in the assessee's own case & S-1308, Ammapet Primary Agricultural Co-operative Bank Ltd., and the Co-ordinate Bench decision in the case of Tamilnadu Co-operative State Agriculture and Rural Development Bank Limited, supra, we dismiss the appeal of Revenue. Consequently, all the three appeals of Revenue are dismissed." 14. In the case of K 720 T Ganapathipalayam PACCS Ltd. v. ITO in ITA No,. 963/Chny/2024 dated 21.08.2024, wherein, the Tribunal referred to the decision in the case of Erode City Municipal Corporation Emp. Co-op. T & C Limited K831 v. The Assessing Officer, Ward 1(1), Erode in ITA Nos.509 & 510/Chny/2024 dated 22.07.2024 in which, on an identical facts, the decision of the Hon'ble High Court of Madras in the case of Thorapadi Urban Co-op. Credit Society Limited & Another v. ITO in WP Nos. 11172, 11174, 11177 and 11180 of 2023 dated 10.10.2023 has been followed to decide the issue of allowability of claim of deduction under section 80....
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.... Societies Act, 1912 (2 of 1912 ), or under any other law for the time being in force in any State for the registration of co~ operative societies. 10. A reading of the above definition would make it clear that Co-operative Society- means a Co-operative Society registered under Co-operative Societies Act, 1912. Thus, a Co-operative Society referred therein is only a co-operative society as defined under the Act, be it a Co-operative Society carrying on banking business or Co-operative Society carrying on the other businesses or a Co-operative bank. 11. The learned counsel for the respondent referred to the judgment of the Hon-ble Supreme Court rendered in Totgars Co-operative Sale Society Ltd., v. Income-tax Officer, Karnataka, wherein the issue came up for consideration as to whether the interest income received by a Co-operative Bank from its members by way of providing the credit facilities to its members is eligible for deduction or not. Ultimately the Hon'ble Supreme Court found that under Section 80P(2)(a)(i), the same is eligible for deduction. Therefore, the law laid down by the Hon'ble Supreme Court is not applicable for in the present case as the eligibi....