9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (10) TMI 933 - AT - Income TaxEntitled to deduction u/s 80P(2)(d) on interest received on investments made with Alapuzha District Cooperative Bank Limited - Held that - The benefit of this section is available only for the interest / dividend that are received by a co-operative society for investments made with another co-operative society. In the instant case, the assessee had produced certificate of registration of the payer, viz., Alappuzha District Co-operative Bank Limited. also registered under the Reserve Bank of India under the Banking Regulations Act, 1949 for doing the business of banking. The first appellate authority, while dismissing the appeals filed by the assessee for the assessment year 2013- 2014 and 2014-2015, had elaborately considered the distinction between the co-operative society and a cooperative bank. The CIT(A) had categorically concluded that Alappuzha District Co-operative Bank Ltd. is is co-operative Bank and not a co-operative society. This categorical finding of the CIT(A), was never dispelled before the Tribunal. Admittedly, when the interest income is received from a cooperative bank, the recipient co-operative society would not be entitled to deduction u/s 80P(2)(d) - decided against assessee.
Issues involved:
Whether the assessee is entitled to deduction u/s 80P(2)(d) of the I.T.Act on interest received on investments made with Alapuzha District Cooperative Bank Limited? Analysis: Issue 1: Entitlement to deduction u/s 80P(2)(d) of the I.T.Act The case involved the question of whether the assessee, a Co-operative Society engaged in the business of manufacturing and sale of homeopathic medicines, was entitled to deduction u/s 80P(2)(d) of the I.T.Act on interest received on investments made with Alapuzha District Cooperative Bank Limited. The Assessing Officer had denied the deduction, stating that only interest/dividend paid by a cooperative society is eligible for exemption under this provision. The CIT(A) upheld this view, emphasizing that a Cooperative Bank like Alappuzha District Co-operative Bank Limited is not a Cooperative Society and, therefore, interest income from it is not eligible for deduction under section 80P(2)(d) of the Act. Issue 2: Judicial precedents and interpretation of the law The Tribunal considered the conflicting decisions of the Hon'ble Karnataka High Court regarding whether a Co-operative Bank can be considered a Co-operative Society for the purpose of claiming deduction u/s 80P(2)(d) of the I.T.Act. The Tribunal noted that the Hon'ble Karnataka High Court had previously held that a Co-operative Society includes a Co-operative Bank, while in a subsequent case, it was held that the deduction under this provision is only for income received on investments with a Co-operative Society and not a Cooperative Bank. The Tribunal emphasized that the provisions of section 80P(2)(d) are clear and only allow deduction for interest/dividend received from investments made with another Co-operative Society. Issue 3: Distinction between Co-operative Society and Co-operative Bank The Tribunal analyzed the distinction between a Co-operative Society and a Cooperative Bank, highlighting that the benefit of deduction u/s 80P(2)(d) is available only for interest/dividend received by a Co-operative Society for investments made with another Co-operative Society. In this case, the payer, Alappuzha District Co-operative Bank Limited, was also registered under the Banking Regulations Act, 1949 for banking business. The CIT(A) had concluded that the bank is a Cooperative Bank and not a Cooperative Society, a finding that was not challenged before the Tribunal. Therefore, the Tribunal upheld the CIT(A)'s decision, stating that when interest income is received from a cooperative bank, the recipient co-operative society is not entitled to deduction u/s 80P(2)(d) of the I.T.Act. In conclusion, the Tribunal dismissed the appeals filed by the assessee, affirming that the interest income received from Alappuzha District Co-operative Bank Limited was not eligible for deduction under section 80P(2)(d) of the I.T.Act.
|
