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TMI Blog2020 (3) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... cation afresh, on similar line. - Decided in favour of assessee allowed for statistical purposes. - ITA No.1207/Bang/2019 - - - Dated:- 27-2-2020 - Shri Chandra Poojari, Accountant Member And Shri Pavan Kumar Gadale, Judicial Member For the Appellant : Sri.V.Srinivasan, Advocate For the Respondent : Sri.Manjeet Singh, Addl.CIT-DR ORDER PER CHANDRA POOJARI, AM : This appeal filed by the assessee is directed against the order of the CIT(A), dated 26.03.2019. The relevant assessment year is 2016-2017. 2. The assessee has raised following grounds:- 1. The orders of the authorities below in so far as they are against the appellant, are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. 2. The appellant denies itself liable to be assessed over and above the income returned income of ₹ 8,23,810/- after claiming deduction of ₹ 1,06,78,048/- under section 80P[2][a][i] 80P [2][d] of the Act, in respect of the income derived from business of providing. credit facilities to its members and Godown rent earned by the appellant under the facts and in the circumstances of the appellant's case. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the circumstances of the appellant's case. 8. The learned CIT[A] ought to have appreciated that the appellant had earned the interest income of ₹ 1,37,44,585/- from investments statutorily required to be maintained under the Karnataka Cooperative Societies Act from out of the profits besides 25% of the total deposits as SLR with co-operative banks and 3% of the total deposits towards CRR and thus, the income earned therefrom ought to have been assessed as part of the business of the providing credit facilities to its members and not under the head 'Other Sources under the facts and in the circumstances of the appellant's case. 9. Without prejudice to the above, the learned CIT[A] ought to have appreciated that the cost of funds ought to have been allowed u/s. 57[iii] of the Act while assessing the interest income under the head Other Sources under the facts and in the circumstances of the appellant's case. 10. Without prejudice to the above and without prejudice to the right of the appellant to seek for waiver of the interest levied, the appellant denies itself liable to be charged to interest under Section 234B and 234C of the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2019, wherein it was held as under:- 4. I have considered the rival submissions. Regarding the judgment of Hon'ble Karnataka High Court rendered in the case of Pr. CIT Vs. Vijay Souharda Credit Sahakari Ltd. (supra) on which reliance was placed by ld. DR of revenue as per which the matter was restored back to AO to examine the applicability of the judgment of Hon ble Apex Court rendered in the case of The Citizen Co-operative Society Ltd. Vs. ACIT (supra), I find that in the present case, this is not the case of the AO as per the assessment order that this judgment of Hon ble Apex Court rendered in the case of The Citizen Co-operative Society Ltd. Vs. ACIT (supra) is applicable in the present case. As per the impugned order of ld. CIT(A) also, no finding of ld. CIT(A) is there that this judgment rendered in the case of The Citizen Co-operative Society Ltd. Vs. ACIT (supra) is applicable in the present case. Hence, I hold that this judgment of Hon'ble Karnataka High Court has no applicability in the present case in view of the facts discussed above. Regarding the argument of ld. DR of revenue that the earlier Tribunal order rendered by the Division Bench of the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the State of Karnataka for registration of co-operative societies and therefore, the conclusion of the revenue authorities that cooperative societies and co-operatives are different and that cooperative registered as Souharda Sahakari cannot be regarded as co-operative societies is unsustainable. After holding so, the Tribunal restored back the matter to the AO for fresh decision regarding allowability of deduction u/s. 80P of the IT Act after examining the fulfilment of other conditions in that regard. For ready reference, we reproduce para nos. 5 to 11 of this Tribunal order rendered in the case of Siddartha Pattina Souharda Sahakari Niyamitha Vs. ITO (supra) by SMC bench of the Tribunal on 26.07.2019. These paras are as under: 5. I have heard the rival submissions. The learned counsel for the Assessee submitted that Souharda Sahakari registered under the Karnataka Souharda Sahakari Act, 1997 are also co-operative societies within the meaning of Sec.2(19) of the Act and therefore the revenue authorities were not justified in denying the benefit of deduction to the Assessee. The learned DR relied on a decision of the ITAT Bangalore Bench in the case of M/s. Millennium Cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntegrated community development. As time passed by, other aspects were included into the Cooperative act thus heralding the resurgence of a new era in cooperative movement. The state and the central governments were investing millions of rupees in the form of shares, grants, subsidy, contributions, government support, etc., but the expected results couldn t be achieved in cooperative movements. This condition continued almost until early 1980s. 9. Keeping this in mind, the Central Government setup a committee under the Chairmanship of Shri Ardhanarishwaran, which submitted its report in 1987. It attributed the failure of the cooperative movement to the excessive interference of the governments. It is also true that the unabated party politics in the co-operative movement is also a big hindrance to its progress. Realizing the vital role of the cooperative movement in the progress of the society, the Central Planning Commission set up a committee by appointing Shri Chaudari Brahmaprakash as its head with a task of drafting a Model Cooperative Act which will prevent interference of the governments. This committee, after a detailed study of the Cooperative Acts of various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... correct. However, the other conditions for allowing deduction u/s. 80P(2)(a)(i) of the Act needs to be examined by the AO. I, therefore, remand the question of allowing deduction u/s. 80P(2)(a)(i) of the Act to the AO, except the issue already decided above. 5. Respectfully following this Tribunal order, I hold that the assessee s claim regarding deduction u/s. 80P(2)(a)(i) cannot be rejected on this basis that assessee is a Souharda Sahakari and therefore, cannot be regarded as a co-operative society. But after holding so, I set aside the order of ld. CIT(A) and restore the matter back to the AO for fresh decision regarding allowability of deduction u/s. 80P(2)(a)(i) of the IT Act after examining other conditions for allowing such deduction because those conditions are not examined by the AO till now. I ordered accordingly. 6. Since the issue involved in this appeal is identical to that of the decision of the Tribunal in the case of Sindhu Credit Souharda Sahakari Niyamita (supra), respectfully following the same, we remit the matter to the file of the Assessing Officer for adjudication afresh, on similar line. 7. In the result, the appeal filed by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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