TaxTMI 
TaxTMI 
2025 (8) TMI 1848
X X X X Extracts X X X X
X X X X Extracts X X X X
....ve Sale Society Ltd. reported in 322 ITR 283, wherein it was held that interest earned from investments made in any bank not being cooperative society, is not deductible under section 80P(2)(d) of the Act. 2. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in allowing deduction u/s. 80P(2)(d) of the Act. without appreciating the facts that the deposit in Co-operative Banks lacks the degree of proximity between the members of the society with that of cooperative bank and thus offends this sacrosanct principle of mutuality. 3. On the facts and circumstances of the case and in law, the Ld. CITIA) has erred in ignoring Hon'ble Gujarat High Court's observation in Katlary Kariyana Merchant Sahakari Sarafi Mandali in SCA No.20585 of 2019 that by virtue of amendment in section 194A(3)(v) of the Income tax act, it has also excluded the co-operative banks from the definition of "co-operative society" by the Finance Act, 2015. 4. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in allowing deduction u/s. 80P(2)(d) of the Act without appreciating the facts that the Co-operative Banks are entirely ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e income earned by way of dividend and interest from investments with other co-operative societies for the aggregate amount of Rs.2,32,57,862/- (restricted to the availability of Gross Total Income) and therefore, the CIT (Appeals)'s action confirming the AO's order u/s 143(3) of the Act denying the deduction claimed under Chapter VIA of the Act merely on irrational inferences contained in Para 6.5 of the order, being perverse, arbitrary and under gross misinterpretation of the provisions of the law, is without jurisdiction, bad in law, in-valid, illegal, unwarranted of facts and therefore, liable to be quashed. 3. On the facts and in the circumstances of the case as well in law, both the lower authorities ought to have appreciated from the past assessment records and the orders of the appellate authorities that the appellant co operative society is in existence under the status of registered co-operative society and the income earned by way of dividend and interest was exclusively from investments with co-operative societies, within the meaning and definition of Section 2(19) of the Act and therefore, the CIT (Appeals)'s order confirming the AO's action de....
X X X X Extracts X X X X
X X X X Extracts X X X X
....essee e-filed its return of income for AY 2017-18 on 25.09.2017, declaring total income of Rs. Nil after claiming deduction under Chapter VIA of Rs.2,65,23,665/-, which was restricted to the gross total income. The case was selected for limited scrutiny on the following issues: (i) deduction under Chapter VIA, (ii) bonus for commission paid to employees and (iii) disallowance of payment of gratuity. The assessee had claimed deduction of Rs.2,32,57,862/- as deduction u/s 80P(2)(d) of the Act. As per the said section, deduction is available in respect of income by way of dividend and interest received by the co-operative society on its investment with any other co-operative society. The assessee had received interest income from the Surat District Co-operative Bank Ltd. of Rs.2,26,96,240/-, dividend from the same bank of Rs.9,750/- and dividend from other co-operative banks of Rs.5,51,872/-. The assessee submitted that the Surat Dist. Co-op. Bank Ltd. is a Co-operative Society registered under Gujarat Co-operative Societies Act, 1961 and the said bank is also assessed in the status of a Co-operative Society. However, the Assessing Officer (in short, 'AO') did not allow the deduction ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ese deductions after verifying the respective amounts from appellant's books of account. Accordingly, the appeal was partly allowed by CIT(A). 6. Aggrieved by the order of CIT(A), both the assessee and revenue have filed appeal before the Tribunal. The learned Authorized Representative (ld. AR) of the assessee filed a paper book and relied on the decisions in cases of (i) Kutch District Co-op. Milk Producers Union Ltd. vs. ACIT, (2025) 173 taxmann.com 495 (Guj.), (ii) PCIT vs. Ashwinkumar Arban Co-operative Society Ltd., (2024) 168 taxmann.com 314 (Guj.), (iii) PCIT vs. Shree Madhi Vibhag Khand Udhyog Sahakari Mandali Ltd., (2025) 171 taxmann.com 22 (Guj.), (iv) Surat Vankar Sahakari Sangh Ltd. vs. ACIT, (2016) 72 taxmann.com 169 (Guj.), (v) Thorapadi Urban Co-op. Credit Society Ltd. vs. ITO, (2023) 156 taxmann.com 419 (Mad.) and (vi) PCIT vs. Aradhana Urban Co-operative Credit Society Ltd., (2025) 172 taxmann.com 537 (Guj.). He submitted that the Hon'ble Gujarat High Court in case of Ashwanikumar Arban Co-operative Society Ltd. (supra) has considered and distinguished the order passed by the Hon'ble Supreme Court in case of Totagars Co-operative Sales Society Ltd. (supra) and h....