9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (8) TMI 1791 - AT - Income TaxDisallowance of deduction u/s. 80P(2)(d) - interest received from cooperative banks - HELD THAT - As decided in KALIANDAS UDYOG BHAVAN PREMISES CO-OP SOCIETY LTD. VERSUS ITO-21 (2) (1) , MUMBAI 2018 (4) TMI 1678 - ITAT MUMBAI though the co-operative bank pursuant to the insertion of Sub-section (4) of Sec. 80P would no more be entitled for claim of deduction under Sec. 80P but however, as a co-operative bank continues to be a co-operative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being enforced in any state for the registration of co- operative societies, therefore, the interest income derived by a co-operative society from its investments held with a co-operative bank, would be entitled for claim of deduction under Sec.80P(2)(d) of the Act. As relying on M/S. THE TOTGARS COOPERATIVE SALE SOCIETY LIMITED VERSUS INCOME TAX OFFICER. KARNATAKA 2010 (2) TMI 3 - SUPREME COURT interest income earned by a co-operative society on its investments held with a co- operative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act. - Decided in favour of assessee.
Issues:
1. Disallowance of deduction under section 80P(2)(d) of interest received from cooperative banks. 2. Invocation of section 80P(4) of the Act. 3. Classification of a cooperative bank as a cooperative society for section 80P(2)(d) purposes. 4. Misdirection in relying on a Supreme Court decision. Issue 1: Disallowance of Deduction under Section 80P(2)(d): The appeal concerned the disallowance of a deduction under section 80P(2)(d) of interest received from cooperative banks. The Tribunal analyzed the statutory provision of Sec. 80P(2)(d) and concluded that a cooperative society is entitled to claim a deduction for interest income derived from investments with any other cooperative society. The Tribunal emphasized that as long as the interest income is derived from investments made with a cooperative society, the deduction under Sec. 80P(2)(d) is applicable. Various judicial pronouncements and the CBDT Circular No. 14 supported this interpretation, highlighting that a cooperative bank, being a cooperative society, qualifies for the deduction under Sec. 80P(2)(d). The Tribunal allowed the appeal, affirming the entitlement to the deduction. Issue 2: Invocation of Section 80P(4) of the Act: The Tribunal addressed the invocation of section 80P(4) of the Act, which was contended to restrict the deduction under Sec. 80P(2)(d) for interest income earned from investments with cooperative banks. However, the Tribunal clarified that the insertion of Sub-section (4) of Sec. 80P did not affect the eligibility of a cooperative society to claim the deduction under Sec. 80P(2)(d) for interest income from investments made with a cooperative bank. The Tribunal reasoned that as long as the interest income is derived from investments with a cooperative society, the claim for deduction remains valid, irrespective of the nature of the cooperative bank. The Tribunal's analysis supported the allowance of the deduction under Sec. 80P(2)(d) for the interest income in question. Issue 3: Classification of a Cooperative Bank as a Cooperative Society: The Tribunal examined whether a cooperative bank should be classified as a cooperative society for the purpose of section 80P(2)(d). It emphasized that a cooperative bank, being registered under the Co-operative Societies Act or any other relevant law, qualifies as a cooperative society. The Tribunal's interpretation aligned with the definition of a cooperative society under Sec. 2(19) of the Act, which includes entities registered under cooperative laws. Therefore, the Tribunal concluded that interest income derived by a cooperative society from investments with a cooperative bank is eligible for deduction under Sec. 80P(2)(d). Issue 4: Misdirection in Relying on a Supreme Court Decision: The Tribunal addressed the misdirection in relying on a Supreme Court decision by the ld. CIT(A). It distinguished the case cited by the ld. CIT(A) as pertaining to a different provision of the Act (Sec. 80P(2)(a)(i)), not directly relevant to the entitlement of a cooperative society to claim a deduction under Sec. 80P(2)(d) for interest income from investments with a cooperative bank. The Tribunal highlighted that the Supreme Court decision did not impact the eligibility of a cooperative society for the deduction under Sec. 80P(2)(d). By considering various judicial pronouncements and the specific provisions of the Act, the Tribunal concluded that the interest income earned by a cooperative society from investments with a cooperative bank qualifies for the deduction under Sec. 80P(2)(d). In summary, the Tribunal allowed the appeal by the assessee, confirming the entitlement to claim a deduction under section 80P(2)(d) for interest income received from cooperative banks. The decision was based on a detailed analysis of the statutory provisions, judicial pronouncements, and the classification of cooperative banks as cooperative societies under the relevant laws.
|
