9911796707
TMI Blog2022 (12) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... Surat Vankar Sahakari Sangh Ltd. [ 2016 (7) TMI 1217 - GUJARAT HIGH COURT] held assessee-cooperative 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] 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/private banks, however, said benefit was available in respect of interest earned on deposits made with co-operative bank. In the case Totagars Cooperative Sale Society [ 2017 (1) TMI 1100 - KARNATAKA HIGH COURT] held 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. Thus in our view, dividend income and interest earned by the assessee on surplus held with cooperative bank would be eligible for deduction under Sec.80P(2)(d) of the Act. Appeal of the assessee is allowed. - ITA No. 04/Rjt/2020 - - - Dated:- 13-12-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural credit society with its limited work of providing credit facilities to its members which is covered by ambit and scope of deduction under section 80P and further stated that interest income earned from surplus deposit with co-operative bank is not entitled for deduction under section 80P(2)(d) of the Act. The Ld. CIT(Appeals) held that the aforesaid decision is directly against the assessee and further held that reliance placed by the assessee on the case of State Bank of India v CIT (2016) 72 taxmann.com 64 (Gujarat) cannot be accepted since in this case the remarks made by the jurisdictional Gujarat High Court are by way of obiter dicta and hence the same are not binding in the facts of the assessee s case. Accordingly, Ld. CIT(Appeals) dismissed the assessee s appeal with the following observations: 6. Decision Brief facts of the case are that the assessee is a registered Cooperative society engaged in activity of providing pesticides to its members, The assessee has earned interest and dividend income from its investments in the Rajkot District Co-operative Bank Limited out of the surplus. The A.O has held that this income is neither exempt u/s 80P(2)(a)(i) n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Totagar's Co-operative Sale Society Ltd. vs. ITO [2010] 322 ITR 283/188 Taxman 282 (SC) (Supra), the ITAT has stated that the Hon'ble Karnataka High Court, in holding that interest income not arising from business operation is not eligible for deduction u/s 80P, was guided by nature of activity to determine the character of the income for the purpose of section 80P{2)(d) and that the decision of Hon'ble High Court appears to be sub-silentio. On the other hand I find that the Hon'ble Karnataka High Court in the case of PCIT vs. Totagar's Co-operative Sale Society Ltd, 83 taxmann.com 140 (KAR) has categorically held that It Is only primary agricultural credit society with its limited work of providing credit facilities to its member which is governed by ambit and. scope of deduction, u/s SOP and further stated that interest income earned from surplus deposit with co-operative bank is not entitled for deduction 80P(2)(d). Quoting extensively from this decision the Hon'ble ITAT Ahmedabad In the case of Government Servants Co-Op. vs ITO ITA No.l08/Ahd/2017 dated 31/01/2019 (Supra) has held that the income by wav of interest earned by deposit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for consideration before us is whether the assessee is eligible to claim deduction on interest earned from Co-Operative Banks u/s 80P(2)(d) of the Act. In our considered view, Ld. CIT(A) has erred in law in holding that the observations of the Hon ble Gujarat High Court in the case of State Bank of India Vs. CIT (2016) 389 ITR 578 (Guj), to the effect 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 have no binding effect on the jurisdictional Revenue Authorities. 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, cannot be deducted under section 80P(2)(a) (i) of the Act. If the appellant wants to avail of the benefit of deduction of such interest income, it is always open for i ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
