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TMI Blog2023 (9) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... he relief claimed by the assessee is in support of the deduction denied u/s 80P(2)(d) of the Act on the interest and dividend received from cooperative bank/cooperative society from the investments made in other cooperative banks The ld.AR submitted that the issues in all the appeals are common, hence he requested to consider the facts relating to asst. year 2015-16. For the sake of conveniences grounds raised by the assessee for asst. year 2015-16 are reproduced as under:- "The Grounds mentioned hereinafter are without prejudice to one another. 1. That the learned Commissioner of Income Tax (Appeals) [`CIT(A)'] erred on facts and circumstances of the case and in law so far as his Order passed under section 250 of the Income Tax Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 80P(2)(a)(iii) of the Act. 6. The learned CIT(A) has erred on facts and in circumstances of the case and in law by confirming the Assessment Order passed by the learned Assessing Officer ('AO') who has held that the interest received by the Appellant from Co-operative Banks for deposit of amount of Cash Reserve and Liquid Assets which are required to be statutorily maintained (in accordance with the Karnataka Co-operative Societies' Act, 1959 read with the Order of the Registrar of Co-operative Societies) is not eligible for deduction under section 80P(2)(a)(i) of the Act. 7. The learned CIT(A) has grossly erred on facts and in circumstances of the case and in law by confirming the Assessment Order passed by the learn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Statutory notice u/s. 142(1) was issued on 28/06/2021, 09.02.2022 and 15.02.2022 along with questionnaire and duly served on the assessee. In response to the above notices, assessee has submitted the details called for through electronically. 3. The assessee is a marketing cooperative society registered under Karnataka Cooperative Society Act 1959. The main business activity is (a) processing & marketing of agricultural produce grown by its members (b) providing credit facilities to its members (c) the purchase & selling of agricultural implements, seeds or other articles intended for agriculture to its members (d) running a kiranna shop(super market) (e) running a rice mill (f) hiring, of vans (g) running a boarding p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal before the ld. CIT(A). 6. The ld. CIT(A) passed impugned order by granting partial relief to the assessee by holding that assessee is not eligible for deduction in support of interest received from the coordinate banks u/s 80P(2)(a)(i) and 80P(2)(d) of the Act. 7. Aggrieved by the order of the ld. CIT(A), the assessee is in appeal before this Tribunal for all the assessment year under consideration. 8. Ground No. 2-3 are regarding disallowance of claim u/s 80P(2)(d) 8.1 The ld.AR submitted that the cooperative societies /cooperative banks with which assessee had made investments, are registered with the Karnataka Cooperative Societies Act and, therefore, the interest/dividend earned by the assessee from such investments, made wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Ld.DR. Hon'ble Supreme Court was dealing with a case where the assessee therein, apart from providing credit facilities to the members, was also in the business of marketing of agricultural produce grown by its members. The sale consideration received from marketing agricultural produce of its members was retained in many cases. The said retained amount payable to its members from whom produce was bought, was invested in a short-term deposit/security. Such amount retained by the assessee therein was a liability and it was shown in the balance sheet on the liability side. Therefore, to that extent, such interest income cannot be said to be attributable either to the activity mentioned in Section 80P(2)(a)(i) of the Act or under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P(2)(a)(i), and not on the entitlement of a cooperative society towards deduction under Sec. 80P(2)(d) on the interest income on the investments/deposits parked with a cooperative bank. 9.3 At this juncture, we refer to subsequent decision of Hon'ble Karnataka High Court in the case of PCIT Vs. Totagars cooperative Sale Society reported in (2017) 395 ITR 611, wherein Hon'ble Court held 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 Karnataka High Court in the case of PCIT & Anr. vs. Totagars Cooperative Sale Society reported in (2017) 392 ITR 74 and Hon'ble Gujarat High Court in the case of State Bank Of India Vs. CIT reported in (2016) 389 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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