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TMI Blog2023 (11) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... the Central Co-operative Bank is a Co-operative Society which is registered under the Kerala State Co-operative Societies Act, then it is not a bank per se governed by RBI. Similarly in the present case before us, the Erode District Central Co-operative Bank also governed by Tamil Nadu Co-operative Societies Act and once it is governed by Co-operative Societies Act, the assessee is eligible for claim of deduction u/s. 80P(2)(d) - Claim of assessee allowed. - Shri Mahavir Singh, Vice President And Shri Manjunatha.G, Accountant Member For the Appellant : Shri S. Sridhar, Advocate For the Respondent : Shri P. Sajit Kumar, JCIT ORDER PER MAHAVIR SINGH, VICE PRESIDENT: This appeal by the assessee is arising out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come at nil after claiming deduction of Rs. 89,57,539/- u/s. 80P of the Act. The assessee s case was selected for scrutiny under CASS and notice u/s. 143(2) 142(1) of the Act were issued. The AO completed the assessment u/s. 143(3) of the Act on 24.12.2018 by holding that the assessee fails the test for mutuality , hence disallowed the deduction of Rs. 84,43,121/- u/s. 80P of the Act. The AO also disallowed the interest of Rs. 5,14,418/- received form Erode District Central Co-operative Bank and assessed the total income at Rs. 89,57,539/-. Aggrieved, assessee preferred appeal before CIT(A). 4. The CIT(A) allowed the claim of deduction u/s. 80P(2) of the Act on the business income earned by assessee society to the extent of Rs. 84,4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anking or providing credit facilities to its members. It has kept its funds and made deposits or investments and maintained savings bank account with Erode District Central Co-operative Bank and earned interest income to the extent of Rs. 5,14,418/-. According to AO and CIT(A) the Erode District Central Co-operative Bank which operates transactions for the public and governed by Reserve Bank of India regulations, it is clearly hit by the provisions of section 80P(4) of the Act. The ld.counsel for the assessee filed copy of Tribunal s order in the case of The Central Excise Staff Co-op Thrift and Credit Society Ltd., in ITA Nos.111 112/CHNY/2023, order dated 31.03.2023, wherein the Tribunal considering the decision of Hon ble Madras High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inate Bench decision in the case of Tamilnadu Co- 5 ITA Nos.111 112/Chny/2023 operative State Agriculture and Rural Development Bank Limited, in ITA Nos.31 to 33/Chny/2021, order dated 29.04.2022, wherein we have already considered the decision of Hon ble Supreme Court in the case of Mavilayi Service Co-operative Bank Limited vs. CIT, Calicut reported in [2021] 123 Taxmann.com 161 (SC) and held as under:- 30. In view of the above facts discussed and the case-laws of the Hon ble Supreme Court in the case of Mavilayi Service Cooperative Bank Limited vs. Commissioner of Income Tax, Calicut (supra), we are of the view that the Assessee is a Co-operative Society under the name and style as Tamil Nadu Co-operative State Agricultural and Ru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey to members of the public, which have a license in this behalf from the Reserve Bank of India. Clearly, therefore, the Assessee s case is out of the provisions of Section 80P(4) of the Act. In relation to the Associate members, we are of the view that the provisions of Section 22 read with Rule 32 of the Tamil Nadu Co-operative Societies Act, 1983 and Tamil Nadu Co-operative Societies Rules clearly determine the procedure to admit Associate members and accordingly in the present case, the Assessee s Co-operative Society has admitted the same. In view of the above finding, we hold that the Assessee is entitled for the claim of deduction u/s. 80P(2)(a)(i) of the Act. Thus, we reverse the orders of the lower authorities and allow these three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable by the RBI in the URL link: https://www.rbi.org.in/commonman/english/scripts/banksinindia.aspx In the above link, the list of 352 District Central Cooperative Banks has been published under the sub-link Co-operative Banks-District Cooperative Banks'. The list downloaded of these 352 District Central Cooperative Banks is attached to this submission. As can be verified, at page no.3 1, Sl.no.7, the The Erode District Central Cooperative Bank Ltd' find mentioned. Thus, The Erode District Central Cooperative Bank Ltd' is an RBI regulated bank and accordingly sub-section (4) of section 80P gets attracted. Any return on investment/deposit made in a cooperative bank by a cooperative society cannot be allowed as a deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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