TaxTMI 
TaxTMI 
2025 (11) TMI 2068
X X X X Extracts X X X X
X X X X Extracts X X X X
....e A.Y. 2021-22. 2. In the instant case, the assessee has claimed the deduction of Rs. 4,85,800/- on account of interest income earned from co-operative bank u/s. 80P(2)(d) of the Act, by filing its return of income on dated 18.10.2021, which was disallowed by the Assessing Officer (AO) vide order dated 19.10.2022 u/s. 143(1) of the Act. 3. Thus, the assessee being aggrieved challenged the said addition/disallowance by filing first appeal before the Ld. Commissioner, however, could not get any relief and therefore the assessee being aggrieved has preferred instant appeal. 4. Heard the parties and perused the material available on record. The assessee has earned interest income to the tune of Rs. 4,85,800/- on FDR maintained with Sar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ties. (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 from the investments, and (ii) such investments should be with any other Co-operative Society. Further, the term „co-operative society‟ is defined under sectio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oviso 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 of the Act which is not the facts of the present case. Therefore, we find no merits in the aforesaid reasoning adopted by the AO and upheld by the learned CIT(A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....om 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 should be with any other Co-operative Society. Further, the term „co-operative society‟ is defined under section 2(19) of the Act as under: "(19) "co-operative society" means a co-operative society registered under the Co-operative 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; We are of the considered view, that though the co-operative bank pur....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of interest earned from Co-operative Bank. No decision of the Hon'ble jurisdictional High Court was brought to our notice on this aspect. We have to, with our highest respect to both the views of the Hon'ble High Court, adopt an objective criterion for deciding as to which decision of the Hon'ble High Court should be followed by us. We find guidance from the judgment of the Hon'ble Supreme Court in CIT v. Vegetable Products Ltd., [1972] 88 ITR 192. In the aforesaid decision, the Hon'ble Supreme Court has laid down a principle that "if two reasonable constructions of a taxing provisions are possible, that construction which favours the Assessee must be adopted". 14. Therefore, in view of the above, we uphold the ple....