2024 (2) TMI 333 - AT - Income Tax

Deduction u/s 80P(2)(d) - interest received from Co-operative bank - HELD THAT - As the issue is squarely covered in favour of the assessee by the decision of The Amroli Vibhag Vividh Karyakari Sahkari M. Ltd. 2024 (2) TMI 242 - ITAT SURAT and there is no change in facts and law and the Revenue is unable to produce any material to controvert the aforesaid findings of the judgment as held Section 80P(2)(d) of the Act allows whole deduction of an income by way of interest or dividends derived by the co-operative society from its investment with any other co-operative society. This provision does not make any distinction in regard to source of the investment because this Section envisages deduction in respect of any income derived by the co-operative society from any investment with a co-operative society. It is immaterial whether any interest paid to the co- operative society exceeds the interest received from the bank on investments. The Revenue is not required to look to the nature of the investment whether it was from its surplus funds or otherwise. The Act does not speak of any adjustment as sought to be made out by learned counsel for the Revenue. The provision does not indicate any such adjustment in regard to interest derived from the co-operative society from its investment in any other cooperative society. Therefore, we direct the Assessing Officer to allow the deduction under section 80P(2) (d) of the Act in respect of interest received from Co-operative bank. Appeal of assessee allowed.

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Deduction under Section 80P(2)(d) of the Income Tax Act, 1961.
3. Correct computation of demand by the Assessing Officer.

Condonation of Delay:
The appeal filed by the assessee was barred by a delay of 146 days. The assessee's counsel explained that the delay was due to the accountant's father's illness and subsequent death. The Tribunal noted that "substantial justice deserves to be preferred" over technical considerations and found the reasons for the delay convincing. Therefore, the delay was condoned, and the appeal was admitted for hearing.

Deduction under Section 80P(2)(d):
The assessee claimed a deduction under Section 80P(2)(d) of the Act, which was initially denied by the CIT(A). The Tribunal observed that the CIT(A) had merely copied the previous year's order without considering the specific facts of the current assessment year. It was noted that the issue was "squarely covered by the judgement of the Coordinate Bench of Surat" in a similar case. The Tribunal cited the Hon'ble Gujarat High Court's decision in Surat Vankar Sahakari Sangh Ltd. vs. ACIT, which held that interest income from deposits in co-operative banks is eligible for deduction under Section 80P(2)(d). Consequently, the Tribunal directed the Assessing Officer to allow the deduction.

Correct Computation of Demand:
The assessee contended that the Assessing Officer had not computed the correct demand as per the provisions of the Act. The Tribunal instructed the Assessing Officer to compute the correct demand in accordance with the law.

Conclusion:
The Tribunal allowed ground Nos. 1 and 2 raised by the assessee, directing the Assessing Officer to allow the deduction under Section 80P(2)(d) and to compute the correct demand. Ground Nos. 3 to 6 were deemed consequential/general and did not require adjudication. The appeal filed by the assessee was allowed, and the order was pronounced on 31/01/2024 in the open court.