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TMI Blog2021 (9) TMI 103X X X X Extracts X X X X X X X X Extracts X X X X ..... of Karnataka in the case of Totgars Co-operative Sales Society Ltd. [ 2015 (4) TMI 829 - KARNATAKA HIGH COURT] . Appeal of the assessee is treated as allowed for statistical purposes. - ITA No.1256/Bang/2019 - - - Dated:- 1-9-2021 - Shri B. R. Baskaran, Accountant Member And Smt. Beena Pillai, Judicial Member For the Appellant : Shri V. Srinivasan, A.R. For the Respondent : Shri Priyadarshi Mishra, D.R. ORDER PER B.R. BASKARAN, ACCOUNTANT MEMBER: The assessee has filed this appeal challenging the order dated 14.03.2019 passed by Ld CIT(A), Mangalore and it relates to the assessment year 2016-17. The grounds of appeal filed by the assessee reads as under:- 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 learned CIT[A] is not justified in upholding the denial of deduction _aimed u/s.80P[2][a][i] of the Act amounting to ₹ 52,68,554/- in respect of the profits earned by the appellant from the business of providing credit facilities to its members under the facts and in the circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 8. Without prejudice to the right to seek waiver with the Hon ble CCIT/DG, the appellant denies itself liable to be charged to interest u/s 234B of the Act, which under the facts and in the circumstances of the appellant s case deserves to be cancelled. 9. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs. 2. The assessee is a co-operative credit society registered under Karnataka Co-operative Societies Act. The assessee claimed deduction u/s 80P(2)(a)(i) of the Act in respect of its entire income and accordingly filed return of income declaring NIL income. The assessing officer noticed that the assessee is having nominal/associate members and accordingly took the view that the assessee has violated the principles of mutua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to deduction claimed u/s 80P(2)(d) of the Act. The Ld. A.R. submitted that and identical issue was also restored to the file of A.O. in the case of Thannirupantha Primary Agricultural Credit Co-operative Society Ltd. Vs. ITO (supra) and accordingly prayed that this issue may be restored to the file of the A.O. 8. We heard Ld. D.R. and perused the record. We notice that an identical issue was restored to the file of the A.O. by the coordinate bench in the case of Thannirupantha Primary Agricultural Credit Cooperative Society Ltd. Vs. ITO (supra) with the following observations: 9.1 As regards the claim of deduction u/s 80P(2)(d) of the I.T.Act, the Bangalore Bench of the Tribunal in the case of M/s.The Jayanagar Cooperative Society Ltd. (supra), on identical facts, had restored the issue to the files of the A.O. for de novo consideration. The narration of facts, contentions and the findings of the Tribunal in the case of M/s.The Jayanagar Co-operative Society Ltd. (supra) reads as follow:- 4. The issues that arise for consideration in this appeal by the assessee are as to whether the Revenue authorities were justified in holding that the assessee was not entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was that in AY 2007-08 to 2011-12 investments and deposits after the Supreme Court's decision against the assessee Totgar's Co-operative Sale Society Ltd. (supra), were shifted from Schedule Banks to Cooperative Bank. U/s.80P(2)(d) of the Act, income by way of interest or dividends derived by a Co-operative Society from its investments with any other Cooperative Society is entitled to deduction of the whole of such interest or dividend income. The claim of the Assessee was that Co-operative Bank is essentially a Co-operative Society and therefore deduction has to be allowed under Clause (d) of Sec.80P(2) of the Act. The Hon'ble Karnataka High Court followed the decision of the supreme Court in The Totgars Cooperative Sales Society Ltd. (supra) and held that interest earned from Schedule bank or cooperative bank is assessable under the head income from other sources and therefore the provisions of Sec.80P(2)(d)of the Act was not applicable to such interest income. It is thus clear that the source of funds out of which investments were made remained the same in AY 2007- 08 to 2011- 12 and in AY 1991-92 to 1999-2000 decided by the Hon'ble Supreme Court. Therefore whet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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