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TMI Blog2023 (1) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment of India, Ministry of Finance vs. Karnataka State Souharda Federal Co-operative Ltd. [ 2022 (1) TMI 540 - KARNATAKA HIGH COURT] Therefore, the reasoning of the CIT(A) that the appellant society is not a cooperative society, cannot be accepted. Therefore, the income earned by the appellant society from its members on the credit is exempt from tax u/s 80P(2)(a)(i) of the Act. As regards income earned on advance income with nominal members, nominal members are treated as members of co-operative society in view of decision of the Hon ble Apex Court in the case of Mavilayi Service Co-operative Bank Ltd. [ 2021 (1) TMI 488 - SUPREME COURT] . Thus, this ground of appeal nos.2 3 stands allowed. Exemption of income earned from another coopera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was registered under the Karnataka Souhard Sahakari Act, 1997, which is not a cooperative society. 3. Being aggrieved by the above assessment order, an appeal was filed before the ld. CIT(A) who vide impugned order confirmed the action of the Assessing Officer. 4. Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal. 5. It is contended that the appellant society i.e. Souhard Co-operative Society registered under the Karnataka Souhard Sahakari Act, 1997 is also a cooperative society as held by the Hon'ble Karnataka High Court in the case of Swabhimani Souharda Credit Cooperative Ltd. vs. Government of India, 122 taxmann.com 37 (Karnataka) that a cooperative society registered under Karnataka Souharda Sah ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards income earned on advance income with nominal members, nominal members are treated as "members of co-operative society" in view of decision of the Hon'ble Apex Court in the case of Mavilayi Service Co-operative Bank Ltd. vs. CIT, 431 ITR 1 (SC). Thus, this ground of appeal nos.2 & 3 stands allowed. As regards ground of appeal no.4, the exemption of income earned from another cooperative society, this issue is no longer res integra as the issue was decided by the Co-ordinate Bench of the this Tribunal in the case of The Ugar Sugar Works Kamgar & Dr. Shirgaokar Shaikshanik Trust Nokar Co-op Credit Society vs. ITO in ITA No.84/PAN/2018 for A.Y. 2012-13 order dated 27.05.2022 in favour of the appellant society. The relevant paragraphs of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. 9. Even the decision of Pune Bench of the Tribunal in the case of Sant Motiram Maharaj Sahakari Pat Sanstha Ltd. vs. ITO, 120 taxmann.com 10 wherein the Tribunal after making reference to the decisions of the Hon'ble Supreme Court in the case of Totgars Co-operative Sales Society Ltd. (supra) and having noticed the divergent views of the Hon'ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Co-op. Ltd. vs. ITO, 55 taxmann.com 447 and the Hon'ble Delhi High Court in the case of Mantola Cooperative Thrift Credit Society Ltd. vs. CIT, 50 taxmann.com 278, decision of the Hon'ble Delhi High Court in the case of Mantola Cooperative Thrift Credit Society Ltd. (supra) had not been preferred to view of the Hon'ble Karnat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... da Credit Cooperative Ltd. (supra). 10. Insofar as the reliance of the ld. DR on the case of Pr. CIT and Another Vs. Totagars Cooperative Sales Society (2017) 395 ITR 611 (Kar.) is concerned, we find that the issue in that case was the eligibility of deduction u/s.80P(2)(d) of the Act on interest earned by the assessee co-operative society on investments made in co-operative banks. In that case, the assessee was engaged in the activity of marketing agricultural produce by its members; accepting deposits from its members and providing credit facility to its members; running stores, rice mills, live stocks, van section, medical shops, lodging, plying and hiring of goods and carriage etc. It was in that background of the facts that the Hon&# ..... X X X X Extracts X X X X X X X X Extracts X X X X
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