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TMI Blog2022 (5) TMI 1063X X X X Extracts X X X X X X X X Extracts X X X X ..... society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec.80P(2)(d) In the case of Surat Vankar Sahakari Sangh Ltd. v Assistant Commissioner of Income-tax [ 2016 (7) TMI 1217 - GUJARAT HIGH COURT] the Gujarat High Court held assessee-co-operative society was 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. In the case of Surendranagar District Co-op. Milk Producers Union Ltd. [ 2019 (9) TMI 978 - ITAT RAJKOT] the ITAT held that assessee-co-operative society could not claim benefit of section 80P(2)(d) in respect of interest earned by it from deposits made with nationalised/privat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of Income- Tax (Appeals) ought to have upheld the order of the Assessing Officer. (iii) It is, therefore prayed that the order of the Ld. Commissioner of Income-tax(Appeals) may be set aside and that of the Assessing Officer be restored. (iv) The appellant prays for leave, to amend or alter any ground or add a new ground which may be necessary. 3. The assessee is a Cooperative Society and is engaged in providing credit facilities to its members only from the deposits received from them. During the year under consideration, the assessee declared net profit of _ 2,13,69,867/- and after adjustment of some items, total income of _ Nil was worked out after claiming deduction section 80P of the Act. During the course of asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urred for earning the aforesaid interest income. While passing the order, the assessing officer observed as under: On perusal of the above judgment it is clear that the deduction claimed by the co.-op. society on interest income from nationalized banks as well as Co-operative banks of entities other than co-op. society will not be allowed as deduction u/s 80P of the Act. Hence, the deduction claimed by it on interest earned from entities other than co.-op. societies are disallowed and added to the income of the assessee. Accordingly, addition of Rs.1,46,98,641/- is made to the total income of the assessee under the head of income from other sources u/s. 56of the I.T. Act, 1961. As regards arguments of the assessee that proportionate exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s u/s 80P(2)(d) of the Act. The Hon ble Gujarat High Court in the case of State Bank of India Vs. CIT (2016) 389 ITR 578 (Guj), held that that the interest income earned by a co-operative society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act. The Honourable Gujarat High Court made following observations in respect of interest earned from deposits kept with a cooperative bank: Therefore, it is only the interest derived from the credit provided to its members which is deductible under section 80P(2)(a)(i) of the Act and the interest derived by depositing surplus funds with the State Bank of India not being attributable to the business carried on by the appellant, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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