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TMI Blog2022 (11) TMI 813X X X X Extracts X X X X X X X X Extracts X X X X ..... advanced by the ld AR that the legal issue challenging the validity of order passed u/s. 147 was earlier dismissed as infructuous for A.Y. 2011-12 and A. Y. 2012-13 as the matter was only decided on merits and the same should also be recalled and decided a fresh. 33. In the entirety of facts and circumstances of the case, we hereby recall the earlier orders so passed by the Coordinate Benches in ITA No. 633/JP/19 & 512/JP/19 for A.Y 2011-12 and 634/JP/19 & 513/JP/2019 dated 02.09.2019 and subsequent order passed by the Tribunal in ITA Nos. 187/JP/19 & 22/JP/19 dated 30.09.2019 for A.Y. 2014-15 for the limited purposes of adjudication of matter relating to quantum of deduction eligible for deduction u/s 80P(2)(d) as to whether the deduction should be allowed on gross interest or net interest income afresh taking into consideration the decision of the Hon'ble Jurisdictional High Court in case of Rajasthan Rajya Sahkari Upbhokta Sangh Ltd (supra) as well as adjudication of following grounds of appeal afresh as raised by the assessee in its respective cross-appeals: ITA. No. 512/JP/2019 (For A.Y 2011-12) "1. The ld. CIT(A) has erred on facts and in law in upholding validity of or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration the decision of the Hon'ble Jurisdictional High Court in case of Rajasthan Rajya Sahkari Upbhokta Sangh Ltd (supra) as well as adjudication of following grounds of appeal afresh as raised by the assessee in its respective cross-appeals. Thus, the issue remain before us is as under : (i) Whether the ld. CIT(A) erred on facts and in law in upholding the validity of order passed by the AO u/s 147 of the Act (only for A.Y 2011-12- & 2012- 13). (ii) Whether the ld. CIT(A) has erred on facts and in law in allowing deduction u/s 80P (2)(d) of the Act on proportionate basis instead of on the entire interest receipt on FDR maintained with Jaipur Central Cooperative Bank Ltd. 3. On the first issue which relates to AY 2011-12 & 2012-13 where assessee has challenged the reopening of assessment by AO u/s 148, it is contended that the original assessment was completed u/s 143(3). The assessment for AY 2011-12 was reopened after expiry of four years but the assessment for AY 2012-13 was reopened within 4 years from the end of relevant AY. In the assessment proceedings assessee filed computation of income wherein claim of deduction u/s 80P was specifically made. The claim of dedu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that while considering whether reassessment proceedings is valid or not, AO is to only see whether there was prima facie some material on the basis of which reopening can be done. Sufficiency or correctness of the material is not to be considered at the time of reopening. 6. We have considered the rival submission and perused the material available on record. The reasons for reopening the assessment is reproduced as under:- For AY 2011-12 "The assessee filed its return of income for AY 2011-12 on 29.09.2011 declaring total income of Rs.3,60,25,830/- which was assessed u/s 143(3) at Rs.4,55,67,387/- vide order dated 06.02.2014. In this case, the assessee has claimed and was allowed deduction of Rs.149,40,834/- u/s 80P on interest income derived from Jaipur Central Cooperative Bank Ltd. As the interest income received from cooperative bank and not from cooperative societies, hence deduction allowed u/s 80P was irregular because it was not earned by way of interest or dividend derived by cooperative society from its investment with any other cooperative societies and section 80P shall not apply in relation to any cooperative bank. It is also pertinent to mention here that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar because interest is received from cooperative bank and not cooperative society. We note that this information was already on record. Further on the issue as to whether a cooperative bank is a cooperative society or not, there are decisions of various High Courts and ITAT in favour of the assessee at the relevant point of time when notice u/s 148 was issued. Even the Coordinate Bench in case of ITO Vs. Shree Keshorai Patan Sahakari Sugar Mill (ITA No. 418 & 419/JP/2017 order dated 31.01.2018) held that co-operative bank is to be treated as co-operative society for the purpose of interest income on investment in such co-operative bank and thus, eligible for deduction u/s 80P(2)(d) in respect of the interest income from investment made with the co-operative bank. Thus, when AO has taken one of the permissible view for allowing deduction u/s 80P(2)(d) in respect of interest earned by the assessee on investment made in FDR with Jaipur Central Cooperative Bank Limited, then on the basis of various decisions relied by Ld. A/R (supra), we have no hesitation to hold that reopening is bad in law and thus, this ground of the assessee is allowed. 8. On the second issue which relates to al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest received from JCCB Ltd., the remaining interest receipt is more than the interest payment. 11. We have considered the rival submission and perused the material available on record. The Hon'ble Rajasthan High Court in case of Rajasthan Rajya SahakariUpbhoktaSangh Ltd. (1996) 84 Taxman 33 has held that where assessee has maintained a composite account of expenses incurred for earning taxable as well as exempted income, deduction u/s 80P(2)(d) could be allowed on net receipt only, after deducting expenditure incurred for exempted income. Therefore, the issue for examination is whether against the interest receipt from JCCB Ltd., assessee has incurred any expenditure on payment of interest which has been attributed against such receipt by the Ld. CIT(A). From the details prepared on the basis of financial statements and recorded by CIT(A) in its order, we find that own funds of the assessee is much more than the amount of investment in FDR with JCCB Ltd. as per the following table:- AY Own Funds Investment with JCCB 2011-12 Rs.49,97,82,213/- Rs.20,00,00,000/- 2012-13 Rs.68,88,95,705/- Rs.20,00,00,000/- 2014-15 Rs.99,34,23,097/- Rs.53,29,00,000/- Thus, in view of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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