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TMI Blog2021 (5) TMI 300X X X X Extracts X X X X X X X X Extracts X X X X ..... ounds be set aside and that of the AO be restored. 3. The appellant craves leave to amend or alter any ground or to submit additional new ground, which may be necessary." 3. The brief facts of the case are that the assessee filed its return of income on 23.09.2015 declaring total income to the tune of Rs. 7,850/-. Thereafter, the case was selected for scrutiny. Notices u/s 143(2) & 142(1) of the Act were issued and served upon the assessee. The assessee is a Co-Operative Housing Society deriving income from interest from Saving Bank Account and interest on fixed deposits. During the year under assessment, the assessee declared gross total income to the tune of Rs. 1,67,29,647/- and has claimed deduction u/s 80P(2)(d) of Rs. 1,67,21,795/- being interest received from co-operative bank and claimed 100% exempt. The assessee earned the interest income in sum of Rs. 1,67,21,795/- from its investments from F.D. etc. and claimed exempt u/s 80P of the I. T. Act, 1961. The said claim was declined and the interest income in sum of Rs. 1,67,21,795/- was added to the income of the assessee and the total income of the assessee was assessed to the tune of Rs. 1,67,29,647/-. Feeling aggrieved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ociety. 6.3 The term 'co-operative society has been defined u/s 2(19) of the Act, as under.- "(19) to-operative society" means a co-operative society registered under the Cooperative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any state for the registration of co-operative societies, 6.4 To decide the issue, decisions in the following case laws are found relevant: a) Totqars Co-operative Sale Society Ltd. vs. ITO f20101 322 ITR 283 (SC)/120101 188 Taxmann 282 (SC): The assessee was a co-operative credit society and its business was to provide credit facilities to its members and to market their agricultural produce. The issue before the Hon'ble Supreme Court was whether Interest income on surplus fund not requited immediately for business purpose and hence invested in short-term deposits with Banks and Government securities would qualify for deduction as business income under section 80P(2)(a)(i). The Apex Court held that such interest income would come in the category of " income from other sources' and not within the meaning of the expression " profits and gains of business" because such interest income cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was also held that if the appellant wants to avail of the benefit of deduction of such interest income, it is open for it to deposit the surplus funds with cooperative bank and avail of deduction under section 80P(2)(d). e) Kaliandas Udyog Bhavan Premises Co-operative Society Ltd. vs ITO (2018) 94 Taxmann.com 15 (Mumbai- Trib) f) Lands End Co-operative Housing Society Ltd. Vs. ITO (2017) 46 CCH 52 (Mum). g) Sea Grean Co-operative Housing Society Ltd. Vs ITO 21(3)(2). Mumbai (ITA No. 13431Mum/2017, dated: 31.03.2017. h) MerwanieeCama Park Co-operativa Housing Society Ltd. Vs. ITO (ITA No. 6139/Mum/2014, dated: 27.09.2017. In the aforesaid four decisions of the Mumbai Tribunal from (e) to (h), it has been held that the assessee is entitled to deduction under section 80P(2)(d) in respect of interest income on investments made with the co-operative banks. It has been noted that there are conflicting decisions of non-jurisdictional High Courts. The decision of the Bombay High Court in case of K. Subramanian Vs. Siemens India Ltd. [1983] 15 Taxman 594/ [1985] 156 ITR 11 (Bom) was referred to by the Tribunal in the case of Kaliandas Udyog Bhavan Premises Co-operative Society Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest income from the deposit with the Co-operative Bank is liable to be exempt u/s 80P(2)(d) of the Act. Moreover, we noticed that the issues have duly been covered with the assessee's own case for the A.Y.2013-14 in ITA. No.1760/Mum/2017 dated 14.07.2017. The relevant finding has been given in para no. 7 to 7.2 which is hereby reproduced as under.:- "7. We have heard the rival submissions and perused the relevant material on record. The issued raised in this appeal is summarized here. The assessee claims that co-operative banks in Maharashtra are registered as co-operative societies under Bombay/Maharashtra Co-operative Societies Act and hence Saraswat Co-operative Bank Ltd. is a co-operative society as defined u/s 2(19) of the Act. On the contrary, it is the contention of the AO that co-operative bank like Saraswat Co-operative Bank Ltd. is commercial bank and does not fall under purview of a 'co-operative society' referred in section 80P(2)(d) of the Act. 7.1 We are of the considered view that the primary objects of any society are prescribed in the bye laws. In order to become a bank, the principal business of the co-operative society should be transaction of banking busi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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