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TMI Blog2022 (12) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... eld 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 of Totagars Cooperative Sale Society [ 2017 (1) TMI 1100 - KARNATAKA HIGH COURT] held that the interest income earned by a cooperative 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. In view of the aforesaid decisions of Honourable High Court of Gujarat and other cases cited above , Principal CIT erred in holding that the order passed by AO is erroneous and prejudi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 The ld. PCIT erred in law and on facts in arriving at a conclusion to the effect that the assessment order passed by the A.O. was erroneous as well as prejudicial to the interest of the revenue on the ground that such order was passed without verifying the allowability of deduction u/s. 80P(2)(d) of the Income-tax Act, 1961 [hereinafter referred as to the Act] in respect of interest on FDRs held with other co-operative hank. Therefore, the order passed by PCIT is required to be quashed and may kindly be quashed. N.A. As appeal is against the validity of revisional jurisdiction of Pr. CIT. 4 The learned Pr. CIT erred on facts as also in law in setting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0P(2)(d) of the Act on interest/dividend from other co-operative banks. The Principal CIT further observed that the ITAT Ahmedabad in the case of Shriram Cooperative Credit Society Ltd v. ITO in ITA number 98/Ahmedabad/2017 dated 30-01-2020 has decided the issue in favour of the Revenue by disallowing the claim of deduction under section 80P(2)(d) of the Act on the interest received from the cooperative banks. Accordingly, after taking the submissions of the assessee on record, the Principal CIT set aside the assessment order by holding that the same is erroneous and prejudicial to the interests of the revenue. 4. The assessee is in appeal before us against the aforesaid order passed by Principal CIT holding that the order passed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessment proceedings, and after due application of mind had decided the issue in favour of the assessee, this is not a fit case for initiation of proceedings under section 263 of the Act. 5. In response, DR relied upon the observations made by the Principal CIT in the 263 order. 6. We have heard the rival contentions and perused the material on record. The issue for consideration before us is whether the Principal CIT is correct in holding that the order passed by the Ld. Assessing Officer is erroneous and prejudicial to the interests of the Revenue in holding that the assessee is eligible to claim deduction on interest earned from Co-Operative Banks u/s 80P(2)(d) of the Act. The Hon ble Gujarat High Court in the case of State B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s made with co-operative bank. 6.3 In the case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Cooperative Sale Society (2017) 392 ITR 74 (Karn), the Karnataka High Court has held that the interest income earned by a cooperative 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. 6.4 In our view, in view of the aforesaid decisions of Honourable High Court of Gujarat and other cases cited above , Principal CIT erred in holding that the order passed by AO is erroneous and prejudicial to the interest of the Revenue on account of allowability of interest earned by the assessee on interest earned by the assessee from cooperative banks, coupled with th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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