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TMI Blog2018 (7) TMI 1465X X X X Extracts X X X X X X X X Extracts X X X X ..... essee for the amount of interest earned from the co-operative bank under section 80P(2)(d) of the Act. Similarly, we also further direct the Assessing Officer to allow the deduction to the assessee under section 80P(2)(c) of the Act. Hence, grounds of appeal filed by the assessee are allowed for statistical purposes. - I.T.A. No. 2229/Ahd/2017 - - - Dated:- 13-7-2018 - Shri Waseem Ahmed, Accountant Member And Smt Madhumita Roy, Judicial Member Appellant by : None Respondent by : Shri Prasoon Kabra, Sr. D.R. ORDER Per Waseem Ahmed, Accountant Member The captioned appeal has been filed at the instance of the assessee against the appellate order of the Commissioner of Income Tax(Appeals)-4, Vadodara [CIT(A) in short ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct to the tune of ₹ 50,000 in the case of the appellant-co-operative society. 5. The appellant craves to reserve his right to add, alter, amend, or delete any ground of appeal during the course of hearing. 3. At the outset it was observed that the assessee/ his authorized representative neither appeared nor filed any adjournment petition at the time of hearing. However we observed that the issue involved in this appeal is already covered by various judicial pronouncements. Therefore we decided to proceed to adjudicate the issue raised by the assessee after hearing the ld. Departmental Representative on behalf of Revenue. 4. The interconnected issue involved in the grounds of appeal relates to whether interest income ear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 80P(2)(d). In this view of the matter, we dismiss the appeal of the assessee. However, any expenditure incurred by the assessee for earning such income could be allowed to it. In other words, the ld. AO has to determine the net interest earned by the assessee on such investment with bank, and only thereafter that income has to be excluded from the admissibility of deduction under section 80P(2) of the Act. 4. In the result, appeal of the assessee is partly allowed for statistical purpose. Similarly we also note that the income earned by the assessee on the investment made with the any other cooperative society will be eligible for the deduction under section 80P(2)(d) of the Act. In this connection we find support ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law that such an income is not allowable as Section 80P deduction in view of the legislative amendment hereinabove. Mr. Kabra thereafter files hon ble apex court s judgment in (2017) 397 ITR 1 (SC). The Citizen Cooperative Society Ltd. vs. ACIT settling Section 80P deduction issue in respect of ordinary and nominal members. We however find that the above former decision goes contrary to hon ble jurisdictional high court s judgment in Tax Appeal No. 473 of 2014 CIT vs. Sabarkantha District Cooperative Milk Producers Union Ltd. declining Revenue s identical question of law challenging tribunal s decision allowing Section 80P deduction in respect of interest earned on fixed deposits with a cooperative bank in assessment year 2009-10 i.e. post ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ps. We thus conclude in view of all these facts and circumstances that hon ble jurisdictional high court s judgment is binding on us. We accordingly delete the impugned disallowance of ₹ 27,97,019/- in question. This lead appeal ITA No. 1891/Ahd/2014 is partly accepted 8. Thus it is a fact in the aforesaid matter that the Co-ordinate Bench has been pleased to allow the claim of the assessee for deduction of interest income derived from the deposits with the Banaskantha Dist. Central Co-operative Bank Ltd. 9. Taking into consideration the entire facts of the matter and the decision cited by the Ld. AR, we are of the considered view that the assessee is entitled to deduction u/s.80(2)(a)(i) 80P(2)(d) of ₹ 22,52,86 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pro rata expenses of ₹ 5,77,423/- against the interest income of ₹ 8,55,854/- after due verification by the learned Assessing Officer. We, therefore, direct the Assessing Officer to verify assessee's claim of pro rata expenses by examining the record to be shown for verification by the assessee. Needless to mention proper opportunity of being heard ITA No.3268 and 3269 /Ahd/2014 is to be given to the assessee. We order accordingly. The appeal of the assessee is partly allowed for statistical purposes. The facts of the case on hand are identical as discussed in the above case. Therefore, respectfully following the same, we direct the AO to exclude the amount of net interest income from the deduction claimed u/s 80 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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