2022 (8) TMI 1291 - AT - Income Tax

Denial of deduction u/s.80P(2)(a)(i) on interest income from bank - HELD THAT -The Pune Benches of the Tribunal in Sureshdada Jain Nagari Sahakari Patsanstha Maryadit 2019 (4) TMI 682 - ITAT PUNE decided the question of availability of deduction u/s 80P on interest income by noticing that the Pune Bench in an earlier case of Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit 2015 (8) TMI 1085 - ITAT PUNE has allowed similar deduction. Reliance of the CIT(A) and the ld. DR on the case of Pr. CIT and Another Vs. Totagars Cooperative Sales Society 2017 (7) TMI 1049 - KARNATAKA HIGH COURT is not relevant. Thus overturn the impugned order on this score and allow the deduction. Deduction on dividend received through investment in shares - HELD THAT - Section 80P(2)(d) provides that deduction shall be allowed in respect of any income by way of dividend derived by the Cooperative Society from its investment with any other Cooperative Society . Thus, it can be seen that the only requirement for claiming deduction u/s. 80P(2)(d) in respect of dividend is that it should be derived by the assessee cooperative society from its investments made with any other cooperative society. The assessee received dividend income in the instant case from another cooperative society, namely, Pune District Central Coop. Bank Ltd. Thus, the condition of section 80P(2)(d) is satisfied - herefore, direct to allow deduction. Assessee appeal allowed.

Summary

Issues:
1. Denial of deduction u/s.80P(2)(a)(i) on interest income from a bank.
2. Denial of deduction on dividend received through investment in shares of Pune District Central Coop. Bank Ltd.

Analysis:
1. The first issue pertains to the denial of deduction u/s.80P(2)(a)(i) on interest income from a bank. The appellant, a Co-operative Society, declared income and claimed a deduction of Rs.33,74,652 under this section. The Assessing Officer disallowed the deduction, which was upheld in the first appeal. The Tribunal referred to precedents and discussed conflicting views of different High Courts. Ultimately, the Tribunal favored the view supporting the assessee, allowing the deduction under u/s.80P(2)(a)(i) of the Income-tax Act, 1961.

2. The second issue concerns the denial of deduction on dividend income received from shares of Pune District Central Coop. Bank Ltd. The AO rejected the deduction, a decision upheld in the first appeal. However, the Tribunal noted that as per section 80P(2)(d), a cooperative society can claim a deduction for dividend income derived from investments in another cooperative society. Since the appellant received dividend income from Pune District Central Coop. Bank Ltd., meeting the criteria of the section, the Tribunal directed to allow the deduction.

In conclusion, the Tribunal allowed the appeal, overturning the orders of the lower authorities and permitting both deductions claimed by the appellant. The judgment provides a detailed analysis of the legal provisions, precedents, and relevant considerations in determining the eligibility of deductions under the specified sections of the Income-tax Act, 1961.