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TMI Blog2023 (1) TMI 825X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee society who has earned an amount from its investment of surplus fund deposited with co-operative banks is entitled for deduction under section 80P(2)(d) of the Act. Resultantly, the Ld. CIT(A) has erred in upholding the denial of deduction by the AO to the assessee under section 80P(2)(d). Deduction u/s. 80P (2)(a)(i) - Claim disallowed on the ground that since the Assessee is not undertaken banking business activities it s not entitle for the deduction and also on the ground that section 80P(4) is applicable only to Co-Operative Banks and not to the credit Co-Operative Societies - HELD THAT:- This issue is also no longer Res-Integra having been decided by the Co-Ordinate Bench of Tribunal in case of The KEM Hospital Sheth GSM College Employees Co-Operative Credit Society Ltd. [ 2018 (6) TMI 1746 - ITAT MUMBAI] . Assessee Co-Operative Credit Society being not a primary Co-operative Bank is not hit by the provision of section 80P(4), made available on the statute vide Finance Act at 2006 with effect from 01.04.2007. More over it is also Mandatory for a Co-Operative Society to seek license from the Reserve Bank of India to form and operate as Co-Operative Bank. Since t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to operate as a proviso to the main section 80P and does not override section 80P(2)(a)(i) of the Act and/or sec.80P(2)(d). 7. The appellant craves leave to add, alter, amend, modify any grounds of appeal. (Ground of AY 2010-11 are taken) 3. Briefly stated facts necessary for consideration an adjudication of the issue at hand are :- assessee is a Co-operative Credit Society. Society in its return of income declared total income at Rs.(NIL) claiming deduction u/s 80P. Assessing Officer declining the raised by the Assessee made disallowance of deduction claimed by the Assessee as well as disallowance of provision for expanses assets the total income at Rs. 14,91,917/- 23,87,781/- for the AY 2010-2011 2014-15 respectively. 4. Assessee carried the matter before the Ld.CIT(A), by way of filing Appeals who has confirmed the addition by dismissing the Appeal. Filing aggrieved, the Assessee has come up before the tribunal by way of filing present Appeals. 5. I have heard the Ld. Authorized Representative of the parties to the Appeal. Perused the order passed by the Lower Revenue Authorities and documents available on record in the light of the law applicable thereto. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive Societies Act, 1912 (2 of 1912) or under any other law for the time being in force in any State for the registration of co-operative societies, therefore, the interest income derived by a cooperative society from its investments held with a co-operative bank would be entitled for claim of deduction w/s 80P(2)(d) of the Act. We find that the aforesaid issue had exhaustively been looked into by the ITAT, G bench, Mumbai in the case of M/s Solitaire CHS Ltd, Vs. Pr.CIT-26, Mumbai ITA No.3155/Mum/2019, dated 29.11.2019, wherein the Tribunal had observed as under: 6. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as the judicial pronouncements relied upon by them. Our indulgence in the present appeal has been sought, for adjudicating, as to whether the claim of the assessee for deduction under section. 80P(2)(d) in respect of interest income earned from the investments/deposits made with the co-operative banks is in order, or not. In our considered view, the issue involved in the present appeal revolves around the adjudication of the scope and gamut of sub-section ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest income should have been derived from the investments made by the assessee co- operative society with any other co-operative society. We are in agreement with the view taken by the Pr. CIT, that with the insertion of sub-section (4) of Sec. 80P, vide the Finance Act, 2006, with effect from 01.04.2007, the provisions of Sec. 80P would no more be applicable in relation to any co-operative bank, other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. However, at the same time, we are unable to subscribe to his view that the aforesaid amendment would jeopardise the claim of deduction of a co-operative society under Sec. 80P(2)(d) in respect of its interest income investments/deposits parked with a co-operative bank. In our considered view, as long as it is proved that the interest income is being derived by a co-operative society from its investments made with any other co-operative society, the claim of deduction under the aforesaid statutory provision, viz. Sec. 80P(2)(d) would be duly available. We find that the term cooperative society had been defined under Sec. 2(19) of the Act, as under:- (19) Co-operative s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for claim of deduction under Sec. 80P(4) of the Act. Insofar the reliance placed by the Pr. CIT on the judgment of the Hon'ble Supreme Court in the case of Totgars Co-operative Sale Society Ltd. vs. ITO (2010) 322 ITR 283 (SC) is concerned, we are of the considered view that the being distinguishable on facts had wrongly been relied upon by him. The adjudication by the Hon ble Apex Court in the aforesaid case was in context of Sec. 80P(2)(a)(i), and not on the entitlement of a co-operative society towards deduction under Sec. 80P(2) (d) on the interest income on the investments/deposits parked with a co-operative bank. Although, in all fairness, we may observe that the Hon'ble High Court of Karnataka in the case of Pr. CIT Vs. Totagars co-operative Sale Society (2017) 395 ITR 611 (Karn), had concluded that a co-operative society would not be entitled to claim of deduction under Sec. 80P(2) (d). At the same time, we find, that the Hon'ble High Court of Karnataka in the case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Cooperative Sale Society (2017) 392 ITR 74 (Karn) and Hon'ble High Court of Gujarat in the case of State Bank Of India Vs. CIT (2016) 389 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he order passed by the Pr. CIT u/s 263 of the Act was quashed, we, thus, respectfully follow the same. Backed by our aforesaid deliberations, we are unable to uphold the view taken by the Pr. CIT that the failure on the part of the A.O to be disallow the assessee's claim for deduction u/s 80P(2)(d) had rendered the assessment order passed by him u/s 143(3) of the Act, dated 31.08.2017 as erroneous in so far it was prejudicial to the interest of the revenue. 9. Accordingly, on the basis of our aforesaid observations, we herein not finding favor with the view taken by the Pr. CIT that the order passed by the A.O u/s 143(3), dated 31.08.2017 was erroneous in so far it was prejudicial to the interest of the revenue within the meaning of Sec. 263 of the Act set-aside the same and restore the order passed by the A.O u/s 143(3) of the Act, dated 31.08.2017. 8.Hon'ble High Court of Karnataka in case of Pr. CIT Anr.Vs. Totgar's Co-operative Sale Society Ltd. (2017) 292 ITR 74 (Kar.) and Hon'ble Gujarat High Court in case of State Bank of India vs. CIT (2016) 389 ITR 578 (Guj.) had held that interest income earned by a co-operative society on its investment held w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative credit society is neither authorized nor had undertaken any of the banking business activities as are carried out by a primary co-operative bank, but had only provided financial assistance/credit to its members, therefore, it can safely be concluded that it cannot be held to be a co-operative bank. Apart from that, we find that as stated by the Id. A.R, and rightly so, the issue involved in the present appeal in squarely covered by the orders of the Tribunal in the assessee's own case for the preceding years, viz. A.Y 2012-13, ITA No. 4986/Mum/2018, dated 15.03.2018; AY 2013-14, ITA No. 864/Mum/2017, dated 20.06.2018, and A.Y 2014-15, ITA No. 4552/Mum/2019, dated 07.01.2021. On the basis of our aforesaid deliberations, we are persuaded to be in agreement with the observations of the CIT(A) that the assessee would not be hit by the provisions of Sec. 80P(4) of the Act. We, thus, being in agreement with the view taken by the CIT(A) that the claim of the assessee under Sec. 80P(2)(a)(i) was in order, uphold the same. 9. Following the order passed by the Tribunal in case of KEM Hospital Sheth GSM College Employees Co-Operative Credit Society Ltd.(Supra), I am of the cons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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