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TMI Blog2023 (11) TMI 1226X X X X Extracts X X X X X X X X Extracts X X X X ..... awe. Sr. DR. ORDER PER PAVAN KUMAR GADALE JM: These four appeals are filed by the assessee against the separate orders of the National Faceless Appeal Centre (NFAC)/CIT(A) passed u/sec 143(3) and U/sec 250 of the Act for the A.Y 2017-18 and for the A.Y 2018-19, 2019-20 2020-21 passed u/s 143(1) and U/sec 250 of the Act. 2. Since the issues involved in these four appeals are common and identical, hence are clubbed, heard and a consolidated order is passed. For the sake of convenience, shall take up the ITA No. 2955/Mum/2023 for A.Y 2017-18 as lead case and the facts narrated. The assessee has raised the following grounds of appeal 1. On facts and circumstances of the case and in law, the learned CIT(AU) 1, erred in confirming the addition by way of not allowing deduction u/s. 80P(2)(d) amounting to Rs.17,79,349 to the appellant though the appellant is Co- operative Housing Society and it has received the interest from Co-operative Society. 2. On facts and circumstances of the case and in law, the learned CIT(AU) - 1, erred in confirming the addition by not allowing the deduction u/s .80P(2)(d) amounting to Rs.17,79,349 to the appellant though the judi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der income from other sources and assessed the total income of Rs.17,79,350/- and passed the order u/sec. 143(3) of the Act dated 28.06.2019. 4. Aggrieved by the order, the assessee has filed an appeal before the CIT(A), whereas the CIT(A) has considered the grounds of appeal, statement of facts, submissions of the assessee and findings of the A.O but sustained the disallowance and dismissed the assessee appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal with the Hon ble Tribunal. 5. At the time of hearing, the Ld.AR submitted that the CIT(A) has erred in confirming the action of the A.O in treating the interest income from cooperative bank is ineligible for deduction u/s 80P(2)(d) of the Act. The Ld.AR emphasized that the claim has to be allowed as the cooperative bank is treated as a cooperative society for eligibility of deduction u/s 80P(2)(d) of the Act. Further the Ld.AR supported the submissions with the facts chart and judicial decisions. Per Contra, the Ld. DR relied on the order of the CIT(A). 6. Heard the rival submissions and perused the material on record. The sole matrix of the disputed issue emphasized by the Ld.AR is in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer confirmed by the Ld.CIT(A) by relying upon decision rendered by Hon ble Karnataka High Court in case of principle Ld.CIT Vs. Totgar s Co-Operative Sales Society Ltd. 7. Issue as to the allow-ability of the deduction claimed by the Assessee u/s. 80P (2)(d) of the Act, is no longer Res-Integra having being decided by the co-ordinate Bench of the Tribunal in case of Palm Court M Premises Co-operative Society Ltd. in ITA No.561/M/2021 order dated 09.09.2022 by settling the issue in favour of the assessee by distinguishing the judgment rendered by Hon'ble Supreme Court in case of Totgar's Cooperative Sale Society Ltd. Vs. Income Tax Officer, 188 Taxman 282(SC) and by discussing the decision rendered by Hon'ble Bombay High and Hon'ble Gujarat High Court wherein it is held that interest income earned by the Co-operative Society on its investment made with co-operative bank would be eligible for claim of deduction under section 80P(2)(d) of the Act by returning following findings: 8. We have given a thoughtful consideration to the contentions advanced by the Id. Authorized representatives for both the parties in context of the aforesaid issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made available on the statute, vide the Finance Act 2006, with effect from 01.04.2007. On a perusal of the order passed by the Pr.CIT under Sec. 263 of the Act, we find, that he was of the view that pursuant to insertion of sub-section (4) of Sec. 80P, the assessee would no more be entitled for claim of deduction under Sec. 80P(2) (d) in respect of the interest income that was earned on the amounts which were parked as investments/deposits with cooperative banks, other than a Primary Agricultural Credit Society or a Primary Co-operative Agricultural and Rural Development Bank. Observing, that the co- operative banks from where the assessee was in receipt of interest income were not co-operative societies, the Pr. CIT was of the view that the interest income earned on such investments/deposits would not be eligible for deduction under Sec. 80P(2)(d) of the Act. 7. After necessary deliberations, we are unable to persuade ourselves to be in agreement with the view taken by the Pr. CIT. Before proceeding any further, we may herein reproduce the relevant extract of the aforesaid statutory provision, viz. Sec. 80P(2) (d), as the same would have a strong bearing on the adjudication of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r under any other law for the time being in force in any state for the registration of cooperative societies; We are of the considered view, that though the cooperative banks pursuant to the insertion of subsection (4) to Sec. 80P would no more be entitled for claim of deduction under Sec. 80P of the Act, but as a cooperative bank continues to be a co-operative society registered under the Co-operative 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 cooperative bank would be entitled for claim of deduction under Sec .80P(2) (d) of the Act. 8. We shall now advert to the judicial pronouncements that have been relied upon by the Id. A.R. We find that the issue that a co-operative society would be entitled for claim of deduction under Sec. 80P(2)(d) on the interest income derived from its investments held with a cooperative bank is covered in favour of the assessee in the following cases: (i) Land and Cooperative Housing Society Ltd. Vs. ITO (2017) 46 CCH $2 (Mum) (ii) M/s C. Green Cooperative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gible for claim of deduction under Sec. 80P(2) (d) of the Act. We find that as held by the Hon'ble High Court of Bombay in the case of K. Subramanian and Anr. Vs. Siemens India Ltd. and Anr (1985) 156 ITR 11 (Bom), where there is a conflict between the decisions of non-jurisdictional High Court's, then a view which is in favour of the assessee is to be preferred as against that taken against him. Accordingly, taking support from the aforesaid judicial pronouncement of the Hon'ble High Court of jurisdiction, we respectfully follow the view taken by 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 ITR 578 (Guj), wherein it was observed that the interest income earned by a cooperative society on its investments held with a cooperative bank would be eligible for claim of deduction under Sec. 80P(2)(d) of the Act. 9. Be that as it may, in our considered view, as the A.O while framing the assessment had taken a possible view, and therein concluded that the assessee would be enti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Karnataka High Court (supra) and Hon'ble Gujarat High Court (supra), we are of the considered view that assessee society who has earned an amount of Rs. Rs. 6,96,725/- from its investment of surplus fund with cooperative 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) of the Act. 8. Considering the facts, circumstances and the ratio of the judicial decisions. The Honble Tribunal has passed the order and relied on catena of judicial decisions were the co-operative society receives/earns interest on deposits with the co-operative bank is eligible for claim of deduction under section 80(2)(d) of the Act. The recent decision of the Honble Supreme court in the case of Kerala State Cooperative Agricultural Rural Development Bank Ltd Vs Assessing Officer (2023) 154 taxmann.com 305 (SC) dated 14-09-2023 has upheld the view of allowing deduction U/sec 80P(2)(d) of the Act to the Cooperative society. Accordingly, fallow the judicial precedence, and set aside the order of the CIT(A) and direct the Assessing officer to allow the claim of de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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