2021 (3) TMI 1425 - AT - Income Tax

Deduction u/s.80P(2)(d) - assessee received interest income being interest on savings account term deposits and fixed deposits with Co-operative banks sale of scrap miscellaneous income dividend and interest free tax free bonds - AO held that interest income received by the assessee from Co-operative bank does not fall in the exempt category as provided u/s.80P(2)(d) of the Act along with other income - HELD THAT - As already stated that this issue is already decided in favour of the assessee by this Tribunal in assessee s own case for A.Y.2015-16 as decided in the case of PCIT vs. Totagars Co-operative Sale Society 2017 (1) TMI 1100 - KARNATAKA HIGH COURT has held that for the purpose of section 80P(2)(d) of the Act a cooperative bank should be considered as cooperative society. Similar view has been taken by the Hon ble Gujarat High court in the case of Surat Vankar Sahakari Sangh Ltd. 2016 (7) TMI 1217 - GUJARAT HIGH COURT On the same issue in the case of PCIT vs. Totagars Co-operative Sale Society 2017 (7) TMI 1049 - KARNATAKA HIGH COURT has taken a contrary view holding that interest income earned from deposit with the cooperative bank does not qualify for deduction under section 80P(2)(d). It would be relevant to mention here that the Hon ble High Court while rendering later judgement has not considered the earlier decision rendered in the case of Totagars Co-operative Sale Society reported 2017 (1) TMI 1100 - KARNATAKA HIGH COURT No judgement from Hon ble Jurisdictional High court on the issue of eligibility of deduction u/s 80P(2)(d) of the Act on interest income from cooperative bank has been brought to our notice. The Hon ble Bombay High Court in the case of K. Subramanian Vs. Siemens India Ltd. 1983 (4) TMI 3 - BOMBAY HIGH COURT has held that when two conflicting decisions of non-jurisdictional High courts are available the view which is in favour of the assessee is to be preferred. Decided in favour of assessee.

Summary

Issues:
Whether the deduction u/s.80P(2)(d) of the Income Tax Act was justified in the case.

Analysis:

Issue 1: Justification of Deduction u/s.80P(2)(d) of the Act
The primary issue in this appeal was whether the ld. CIT(A) was correct in allowing the deduction u/s.80P(2)(d) of the Income Tax Act in the circumstances of the case. The assessee, a cooperative housing society, had received various types of income during the relevant period, including interest income from savings accounts, term deposits, and fixed deposits with cooperative banks. The assessee claimed a deduction of Rs. 1,86,42,143/- u/s.80P(2)(d) while filing the return of income, but the ld. AO restricted the deduction to Rs. 1709/- during the assessment. The ld. CIT(A) upheld the assessee's claim of deduction u/s.80P(2)(d) based on various decisions and the decision of the Hon'ble Jurisdictional High Court in a specific case. The Tribunal also referred to a previous order in the assessee's case for A.Y.2015-16 where a similar issue was decided in favor of the assessee. Consequently, the Tribunal upheld the deduction of Rs. 1,86,42,143/- as claimed by the assessee u/s.80P(2)(d) of the Act. The Tribunal dismissed the Revenue's appeal, citing the precedence set in previous cases and the absence of conflicting judgments from the Jurisdictional High Court on the issue.

Conclusion:
The Tribunal found in favor of the assessee, upholding the deduction u/s.80P(2)(d) of the Act based on previous decisions and the specific circumstances of the case. The Tribunal dismissed the Revenue's appeal, emphasizing the consistency in decisions and the absence of conflicting judgments from the Jurisdictional High Court on the matter.