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TMI Blog2021 (7) TMI 491X X X X Extracts X X X X X X X X Extracts X X X X ..... - SUPREME COURT] and since the facts prevailing in the instant case needs to be examined afresh in the light of the principles enunciated by Hon ble Supreme Court in the above said case. Rejection of deduction u/s 80P(2)(d) - interest income earned on fixed deposits with other cooperative societies - HELD THAT:- In the instant case, the assessee has earned interest income from fixed deposits with other banks. In view of the decision rendered in case Totgars Co-operative Sale Society Ltd. [ 2015 (4) TMI 829 - KARNATAKA HIGH COURT] .the assessee is entitled for deduction of proportionate cost, administrative and other expenses. Accordingly, we set aside the order passed by Ld.CIT(A) on this issue and restore the same to the file of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs Co-operative Sale Society vs. PCIT Ltd reported in (2010) 188 taxmann.com 282. 3. The Ld.AR submitted that the appeal filed by the assessee before Ld.CIT(A) challenging the additions made by the Ld.AO was dismissed. Aggrieved by the order passed by learnt CIT (A) assessee is in appeal before us 4.It is submitted that, both the above said issues are covered by the decision rendered by the co-ordinate bench in the case of Karkala Co-op S. Bank Ltd (ITA Nos.1288 1289/Bang/2019 relating to Assessment Year: 2015-16 2016-17 by order dated 18-02-2021. It is further submitted that, the co-ordinate bench of this Tribunal restored the first issue to the file of Ld.AO with the direction to apply the decision rendered by Hon ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome-tax Act. Hence, it is necessary to construe the expression Members in section 80P(2)(a)(i) of the Act in the light of definition of that expression as contained in the concerned co-operative societies Act. The Ld. A.R. submitted that the Hon ble Supreme Court has considered the decision rendered by it in the case of Citizen Co-operative Society Ltd. (supra) and observed that the ratio decidendi of Citizen Co operative Society Ltd. must be given effect to. Accordingly, he submitted that the assessee should be allowed deduction u/s 80P(2)(a)(i) of the Act. 5. The Ld. D.R., on the contrary, submitted that the issue of deduction needs to be examined afresh in the light of decision rendered by Hon ble Supreme Court in the case of Mavi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act in respect of interest income earned from fixed deposits kept with bank. We noticed earlier that the A.O. has observed in Assessment Year 2015-16 that the interest income received by the assessee from deposits kept with banks is not eligible for deduction u/s 80P(2)(c) 80P(2)(d) of the Act since the assessee is not eligible for deduction u/s 80P(2)(a)(i) of the Act. In AY 2016-17, the AO assessed the interest income received on bank deposits under the head Income from other sources and denied deduction claimed u/s.80P(2)(d) of the Act. The Ld CIT(A) confirmed the action of the AO on this issue. 8. The Ld. A.R. submitted that the assessee is entitled to claim deduction allowable u/s 57 of the Act in respect of cost of f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le Society Ltd. Vs.ITO (2015) 58 taxmann.com 35 (Karn). Accordingly, we direct the A.O. to allow deduction of proportionate cost, administrative and other expenses, if the A.O. proposes to assess the interest income earned from bank deposits as income under the head other sources . 5.1. In the instant case, the assessee has earned interest income from fixed deposits with other banks. In view of the decision rendered by the jurisdictional Hon ble High Court of Karnataka, the assessee is entitled for deduction of proportionate cost, administrative and other expenses. Accordingly, we set aside the order passed by Ld.CIT(A) on this issue and restore the same to the file of the AO with similar directions. Accordingly the grounds r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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