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TMI Blog2022 (6) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction of the interest income earned by the assessee from the co-operative bank. Some of the judgements are in favour of the assessee and some of them are against the assessee. It is also an admitted fact that the Hon ble High Court of Gujarat is in favour of the assessee with respect to the interest on deposits made with the co-operative bank - See Sabarkantha District Cooperative Milk Producers Union Ltd. [ 2014 (6) TMI 977 - GUJARAT HIGH COURT] Based on the above, it is transpired that the AO has taken one of the possible view for allowing the deduction to the assessee under the provisions of section 80P(2)(d)/80P(2)(a)(i)(a) of the Act. Where two view are possible on the issue and the AO has taken one of the possible view, however ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow cause notice and the order passed u/s 263 of the Act and hence the impugned order is bad in law. 2. The learned Principal Commissioner of Income-tax, Rajkot - 1, Rajkot erred in setting aside the assessment order framed u/s 143(3) of the Act by holding that the A.O. did not conduct any inquiries or verification in respect of eligibility of deduction claimed by the Appellant of interest income u/s 80P(2)(a)(i)/80P(2)(d) of the Act. 3. The learned Principal Commissioner of Income-tax, Rajkot - 1, Rajkot failed to appreciate that the impugned issue was duly examined by the assessing officer by way of specific inquiries/notices and replies thereto, while finalizing assessment proceedings u/s 143(3) of the Act. 4. The appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Revenue under the provisions of section 263 of the Act. 6. The facts in brief are that the assessee in the present case is a co-operative society and engaged in the business of providing credit facilities to its members. The assessee in the year under consideration declared interest income of Rs. 90,45,196/- from fixed deposit made with Co-operative Bank which was claimed as exempted under the provision of section 80P(2)(a)(i) of the Act. The AO in the assessment framed under section 143(3) of the Act accepted the claim of the assessee. 7. However, the learned PCIT was of the view that assesse being credit society was eligible for deduction under section 80P(2)(i)(a) of the Act for interest income earned from credit facility provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly, the ld. PCIT set aside the assessment order by holding the same as erroneous insofar prejudicial to the interest of the revenue. 8. Being aggrieved by the order of the learned PCIT, the assessee is in appeal before us. 9. The learned AR before us inter-alia contended that the Hon ble Karnataka High Court in the case of PCIT vs. Totaghar s Co-operative Sales Society Ltd. reported in 78 taxmann.com 169 after distinguishing the facts of the case observed by the Hon ble Supreme Court cited (supra) has held that interest income from cooperative bank is eligible for deduction under section 80P(2)(d) of the Act. 10. The learned AR also contended that the Hon ble High Court of Gujarat in the case of Surat Vankar Sahkari Sangh Ltd. vs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal has committed an error in deleting the disallowance of Rs. 1,42,19,515/- under section 80(P)(2)(d) of the Act. 12.1 Based on the above, it is transpired that the AO has taken one of the possible view for allowing the deduction to the assessee under the provisions of section 80P(2)(d)/80P(2)(a)(i)(a) of the Act. Where two view are possible on the issue and the AO has taken one of the possible view, however the PCIT does not agree with the view adopted by the AO, in such scenario, the order of the AO cannot be held as erroneous. In this regard we find support and guidance from the judgment of the Hon ble Gujarat High Court in the case of CIT vs. Mehsana District Co. Op. Milk Producers Union Ltd. where it was held as under: I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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