2026 (9) TMI 2022

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....nt order dated 20.09.2022 passed u/s 143(3) r.w.s. 144B of the Act pertaining to Assessment Year 2020-21. 2. Brief facts of the case are that the assessee is a company, engaged in the business of only marketing of agricultural produce produced by the members and not involved in carrying of any banking business, filed its return of income on 28.12.2020, declaring total income of NIL after claiming deduction u/s 80P(2)(a)(iii) of the Act of INR 3,38,27,239/-. The case was selected under Complete scrutiny and notice u/s 143(2) was issued on 29.06.2021 followed by the notices u/s 142(1) alongwith a detailed questionnaire. In response to the notices issued, the assessee filed its reply in parts on various dates. The AO has disallowed the dedu....

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....dmittedly the interest income was earned from the investments out of surplus funds made with cooperative banks/socieites, the cooperative bank is also a specie of cooperative society, therefore, the interest income earned by the cooperative society from the cooperative banks qualifies for deduction u/s. 80(P)(2)(d) of the Act. Such interest also qualifies for exemption u/s. 80P(2)(a)(i) as held by the Co-ordinate Bench of Pune Tribunal in the case of Nashik Road Nagari Sahkari Patsanstha Ltd. v. ITO [IT Appeal No. 1700 (Pune) of 2017, dated 27-12-2021], wherein the Tribunal held as under:- "9. We heard the rival submissions and perused the material on record. Admittedly, the appellant is a Cooperative society formed under the provi....

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....in the case of CIT v. Southern Eastern Employees Cooperative Credit Society Ltd. [2016] 73 taxmann.com 123/390 ITR 524 (Calcutta) took a view that the income arising on the surplus invested in short term deposits and securities cannot be attributed to the activities of the society and, therefore, not eligible for exemption u/s. 80P(2)(a)(i) of the Act. However, the Hon'ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. v. ITO (2015) 230 taxmann 309 (Kar.) and the Hon'ble Telangana and Hon'ble Andhra Pradesh High Court in the case of Vaveru Co-operative Rural Bank Ltd. v. CIT [(2017) 396 ITR took a view that such interest income is attributable to the activities of the society and, therefore....