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TMI Blog2023 (5) TMI 1301X X X X Extracts X X X X X X X X Extracts X X X X ..... brief are that that assessee is a co-operative housing society registered under Maharashtra Co-operative Housing Society Ltd. The society collects contribution from its members for payment of property taxes, water charges and other revenue expenses such as electricity, water, security etc. to maintain society situated at Oshiwara, Andheri (W), Mumbai. It has made fixed deposit with various co-operative banks and has earned interest income on fixed deposits and recurring deposits held with many cooperative banks which was claimed as deduction u/s. 80P (2)(d) of the Act. Assessee has claimed deduction of Rs.13,85,628/- u/s. 80P(2)(d) of the Act in respect of bank interest and interest on FDs and RDs received from cooperative banks. The ld. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... investment in the cooperative banks, whether interest earned from such investment falls in the category of interest earned from cooperative society or not so as to get benefit u/s 80 P(2)(d)? 5. Section 80P provides that in case of assessee being a cooperative society, the gross total income which includes any income referred to sub-section 2 shall be deducted in accordance with subject to provision of this section. Sub-section 2 of section 80P Clause (a) states that, "in the case of cooperative society engaged in cooperative business of banking and providing credit facilities to its members or ........., the whole of amount of profit and gains of the business attributable to anyone or more or such activity." Clause (d) of Sub-section 2 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 80P including Sub-section (4) had categorically held that cooperative banks are to be treated as cooperative society. In so far as deduction of interest earned on investment made in cooperative bank, Clause (d) of section 80P(2) provides that any income by way of interest on dividend derived from cooperative societies from its investment with any other cooperative societies, the whole of such income is deductable u/s 80P. The cooperative bank has been defined in part 5 of the Banking Regulation Act 1949. Section 56(ccv) provides that primary cooperative bank means cooperative societies other than a primary agriculture society. This view had come up for the Hon'ble Karnataka High Court in the case of PCIT vs. Totagars Co-operative Sale S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 80P(2)(d) of the Act, a Co- operative Bank should be considered as a Cooperative Society or not? For, if a Co-operative Bank is considered to be a Co-operative Society, then any interest earned by the Co-operative Society from a Co- operative Bank would necessarily be deductable under Section 80P(1) of the Act. 8. The issue whether a Co-operative Bank is considered to be a Co-operative Society is no longer res integra. For the said issue has been decided by the ITAT itself in different cases. Moreover the word "Co- operative Society" are the words of a large extent, and denotes a genus, whereas the word "Co-operative Bank" is a word of limited extent, which merely demarcates and identifies a particular species of the genus Co- opera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... napplicable to the present case. Thus, neither of the two substantial questions of law canvassed by the learned counsel for the Revenue even arise in the present case. 8. This view has further been reiterated by the judgment of Hon'ble Kerala High Court in the case of PCIT vs. Percoorkada Service Co. Bank Ltd. (2022) 442 ITR 141 (Kerala) dated 01.11.2021, wherein one of the question before the Hon'ble High Court was, whether the interest income earned from deposits with the banks is eligible for deduction u/s 80P(2). The Hon'ble Kerala High Court has also considered the judgment of Hon'ble Supreme Court in the case of Totagars Cooperative Societies Ltd. 322 ITR 323, wherein the Hon'ble High Court has held that interest income earned from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. CIT(A), the Hon'ble High Court has held against and observed that income by way of interest earned by deposit or investment of idle or surplus funds does not change its character irrespective of the fact whether such income of interest is earned from a schedule bank or cooperative bank. Therefore, section 80P(2)(d) would not apply on the facts of that case. However, as noted above in one of the judgment, the Hon'ble Karnataka High Court has held the same issue in favour of the assessee. 11. Therefore, following the judgment of Hon'ble Karnataka High Court in the case of Totagars Cooperative Sale Society (2017) 392 ITR 74 (Kar.) dated 5th Jan. 2017 and judgment of Hon'ble Kerala High Court in the case of PCIT vs. Percoorkada Service Co. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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