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TMI Blog2021 (4) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... ever, in para 1 of the assessment order the reference of both the notices is clearly referred. The ld. PCIT before passing under section 263 of the Act, identified the issue regarding the claim of deduction under section 80P(2)(d). The assessee in its reply dated 15.02.2020 clearly explained that the issue was examined by Assessing Officer and that the assessment order is not erroneous. Thus keeping in view of the decision Hon'ble Jurisdictional High Court in Surat Vankar Sahakari Sangh Ltd., [ 2016 (7) TMI 1217 - GUJARAT HIGH COURT] wherein the assessee-co-operative society is held eligible for deduction under section 80P(2)(d) in respect of gross interest received from co-operative bank without adjusting interest paid to said bank, we conclude that the order passed by assessing officer is not erroneous. Hence, the grounds of appeal raised by assessee are allowed. - I.TA No.185/SRT/2020 - - - Dated:- 3-3-2021 - Shri Pawan Singh, Hon'ble Judicial Member And Dr. Arjun Lal Saini, Hon'ble Accountant Member For the Assessee : Shri Hiren R.Vepari AR For the Revenue : Shri Ritesh Mishra - CIT(DR) ORDER PER PAWAN SINGH, JUDICIAL MEMEBER: 1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d order. 4. The assessee filed this reply dated 28th January 2020, contents of reply furnace by assessee is duly recorded in Para 3 of the impugned order. In the reply the assessee stated that the assessing officer during the assessment examined the similar question vide his show cause notice dated 25th April 2017, seeking clarification regarding deduction of Chapter VIA. The assessee before assessing officer explained the justification of deductions including the deduction under section 80P(2)(d) of ₹ 24,50,581/-. The assessee also relied on various case laws of coordinate bench of Tribunal, High Court. 5. After considering the reply of assessee, the learned PCIT issued another show cause notice dated 31st January 2020, contents of which are recorded in para 4 of the impugned order. In the 2nd notice the learned PCIT noted that on perusal of the reply furnished by assessee, it was noted by him that deduction claimed under section 80P(2)(d) is also not available and that deduction so allowed in the assessment order dated 28th June2017, by assessing officer is erroneous and prejudicial to the interest of revenue. The assessee was asked to furnish his reply on 12th Februa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing officer is not at all erroneous; the order is in accordance with the decision of various Tribunals and order passed by jurisdictional High Court on similar issue. The learned AR for the assessee also invited our attention on para 2 of the assessment, wherein the activities of assessee is duly recognized by assessing officer. The learned AR for the assessee further submits that the assessing officer while issuing show cause notice dated 25th April 2017 raised a specific quarry on this issue. The assessee furnished its explanation with regard to the claim of deduction under section 80P(2)(d). The assessee also explained that assessee is claiming statutory deduction. The learned AR for the assessee further submitted that it is settled law that once assessing officer made enquiry on a particular point and after deliberation allow deduction, on that very point, the proceeding under section 263 cannot exist to form a different view. The ld.AR for assessee further submits that assessee claim similar deduction in A.Y. 2012-13 and 2013-14 and were allowed by Revenue in assessment order passed under section 143(3) of the Act dated 13.12.2014 and 30.12.2015 respectively. The ld.PCIT f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted the order of learned PCIT. The learned DR further submits that the order passed by assessing officer is erroneous as well as prejudicial to the interest of revenue. The assessing officer allow the deduction under section 80P(2)(d) without discussing the very nature of interest earned by assessee on deposit with cooperative bank. The order is not in accordance with the decision of Hon'ble Karnataka High Court Totagars cooperative sales society (second Totagars case) (supra). Thus, the order passed by in allowing deduction under section 80P(2)(d) assessing officer is certainly prejudicial to the interest of revenue. The twin conditions of section 263 that assessment order is erroneous and insofar as prejudicial to the interest of revenue, clearly available in this case. The learned CIT prayed for upholding the order passed by learned PCIT. 10. We have considered the rival submission of both the parties. We have also deliberated on the written submission filed by learned AR of the assessee and various case laws relied by him during his submission. We have also gone through the various documentary evidences furnished by learned AR of the assessee. We have noted that d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -operative Sales Society [2017] 78 taxman.com 169 (Karnataka) held that for the purpose of section 80P(2)(d) a Co-operative Bank should be considered by a Co-operative Society and interest earned by Co-operative Society from Co-operative Bank would necessarily be deductible under section 80P(1) of the Act. 14. Further, the Hon'ble Jurisdictional High Court in Surat Vankar Sahakari Sangh Ltd., vs. ACIT [2016] 72 taxmann.com 169 (Guj) held that assessee co-operative society is eligible for deduction under section 80P(2)(d) in respect of gross interest received from co-operative bank without adjusting interest paid to said bank. 15. The Co-ordinate Bench of Rajkot Tribunal in Surendarnagar District Co-operative Milk Producer Union Ltd., vs. DCIT [2019] 111 taxmann.com 69 (Rajkot Tribunal) also held the assessee co-operative society could not claim benefit under section 80P(2)(d) in respect of interest earned by it from deposits made with nationalized/private banks, however, the said benefit was available in respect of interest earned and on deposits made with co-operative bank. Thus, in view of the aforesaid legal discussion we are of the considered view that order passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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