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TMI Blog2021 (10) TMI 778X X X X Extracts X X X X X X X X Extracts X X X X ..... DR ORDER PER MAHAVIR SINGH, VP: This appeal of the assessee is arising out of order of the Commissioner of Income Tax (Appeals)]-44, Mumbai [in short CIT(A)], in Appeal No. CIT(A)-44/ITO-32(2)(2)/IT-230/17-18 vide dated 24.01.2019. The Assessment was framed by the Income Tax Officer, Ward-32(2)(2) Mumbai (in short ITO/ AO) for the A.Y. 2015-16 vide order dated 27.11.2017 under section 143(3) of the Income-tax Act, 1961 (hereinafter the Act ). 2. The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of the Assessing Officer in disallowing the claim of deduction under section 80P(2)(d) of the Act for interest income received from co-operative bank. For this assessee has rai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 80P(2)(d) of the Act. The CIT(A) held as under:- 6.4.8 In view of the above discussions, it is held that the interest income earned from investment of surplus funds with the Co-operative Banks are not eligible for deduction under section 80P(2)(d) or under the principle of mutuality. Hence, the impugned disallowance of ₹2,27,290/- is confirmed. Accordingly, the Ground No.1 raised in appeal is dismissed. Aggrieved, assessee is in appeal before Tribunal. 5. I have heard the learned Sr. Departmental Representative and gone through the facts and circumstances of the case. I noted that this issue is covered by the decision of ITAT, Mumbai in the case Sea Grean Co-operative Housing Society Ltd. Vs. ITO dated 31.03. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the short term deposit would be assessable under the head income from other sources where the Cooperative society is engaged in carrying on business of banking or providing credit facilities to its members and consequently no deduction is allowable u/s 80P(2)(a)(i) of the Act. Whereas in the case before us the issue is whether a co-operative society which has derived income on investment with cooperative banks is entitled to deduction u/s 80P(2)(d). The provisions of Section 80P(2)(d) of the Act provide deduction in respect of income by way of interest or dividend on investments made with other Cooperative society. For the purposes of better proper understanding of these two provisions the relevant extract of the section are reproduced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il deduction u/s 80P(2)(d)(i) in respect of its income assessable as business income and not as income from other sources if it carries on business of the banking or providing credit facilities to its members and has income assessable under the head business whereas for claiming u/s 80P(2)(d) it must have income of interest and dividend on investments with other Co-operative society may or may not be engaged in the banking for providing credit facilities to its members and the head under which the income is assessable is not material for the claim of deduction under this section. Now will evaluate the assessee s case in the light of the decision of the Hon ble Supreme court. The Hon ble Supreme Court in the case of Totagar s Co-operative Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co-operative Credit Society Ltd 57 taxman.com 367. It is further noted by the CIT(A) that the said decision of the Ahmedabad Bench of the Tribunal has been referred to by the SMC Bench of Mumbai Tribunal in the case of Shri Saidatta Cooperative Credit Society Ltd. (supra). In our view, the reliance placed by the CIT(A) on the judgment of the Ahmedabad Bench of the Tribunal is quite untenable, inasmuch as, in the said case the interest income in question was earned from deposits kept with State Bank of India. Obviously, State Bank of India is not a Co-operative society so as to justify the claim that such interest earnings fall within the scope of section 80P(2)(d) of the Act. Further, the reliance placed by the CIT(A) on the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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