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TMI Blog2024 (7) TMI 1082X X X X Extracts X X X X X X X X Extracts X X X X ..... and ultimately allowed the deduction claimed as interest/dividend income earned from Co-operative Bank u/s 80P(2)(d) of the Act . The income if any earned by way of interest or dividend from the investments made with any other Co- operative Bank as well, is allowable as deduction u/s 80P(2)(d) of the Act. Accordingly the AO is directed to allow deduction qua interest earned from Co-operative Banks only but subject to verification. Assessee appeal allowed. - SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER For the Assessee : Shri Ajay Singh, Ld. AR For the Respondent : Ms. Smitha V. Nair, Ld. DR ORDER Per Narender Kumar Choudhry, J M : This appeal has been filed by the Assessee against the order dated 31.05.2023 impugned herein passed by National Faceless Appeal Centre ( NFAC for short)/ the learned Commissioner of Income Tax (Appeals) (in short ld. Commissioner) u/s.250 of the Income Tax Act, 1961 ( the Act ), pertaining to the Assessment Year ( A.Y. for short) 2020-21. 2. In this case, the Assessee claimed the amount of Rs. 33,57,902/- as deduction u/s. 80P(2)(d) of the Act and therefore the ld. Assessing Officer ('A.O.' for short) showcased the Assessee with regard to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and perused the materials available on record. The sole issue involved in instant case relates to the claim of deduction of income earned as interest/dividend from co-operative bank. The Assessee at the outset claimed that the Assessee is entitled to claim the deduction of Rs. 29,60,375/- instead of Rs. 33,57,902/- which was inadvertently claimed before authorities below and therefore the amount of Rs. 29,60,375/- may be allowed as deduction u/s. 80P(2)(d) of the Act as interest income received from co- operative banks , bifurcation of which is reproduced below : 1 MDCC Bank Rs. 1,60,088 2 Saraswat Co- operative Bank Rs. 7,69,384 3 SVC Bank Rs. 20,30,903 Total Rs. 29,60,375 5.1 The provisions of section 80P(2)(d) of the Act reflects that if any income by way of interest or dividend derived by the Co-operative Society from its investment with any other Co-operative Society, then the whole of such income shall be deducted in computing the total income of the Assessee. Meaning thereby income if any by way of interest or dividend earned from investment with any other Co- operative Society, then such amount of interest or dividend earned shall be deductible in computing the total inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the investments, and (ii) such investments should be with any other Co-operative Society. Further, the term co-operative society? is defined under section 2(19) of the Act as under: (19) co-operative society means 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; 11. In the present case, there is no dispute that the assessee is a Co-Operative Housing Society. Thus, if any income as referred to in sub-section (2) to section 80P of the Act is included in the gross total income of the assessee, the same shall be allowed as a deduction. It is pertinent to note that since the assessee is registered under the Maharashtra Co-operative Societies Act, 1960, it is required to invest or deposit its funds in one of the modes provided in section 70 of the aforesaid Act, which includes investment or deposit of funds in the District Central Co- operative Bank or the State Co-operative Bank. Accordingly, the assessee kept the deposits in Co-operative Banks registered under the Maharashtra Co-operative Societies Act and earned Interest, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the interest income should have been derived from the investments made by the assessee co-operative society with any other cooperative society. We though are in agreement with the observations of the lower authorities that with the insertion of sub-section (4) of sec. 80P, vide the Finance Act, 2006, with effect from 1-4- 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, but however, are unable to subscribe to their view that the same shall also jeopardise the claim of deduction of a co-operative society under sec. 80P(2) (d) in respect of the interest income on their investments parked with a co-operative bank. We have given a thoughtful consideration to the issue before us and are of the considered view that 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 may herein observe that the term 'co-opera ..... X X X X Extracts X X X X X X X X Extracts X X X X
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