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TMI Blog2024 (7) TMI 1130X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly, the CIT(A) ought to have recognized the eligibility of the interest received by the Appellant for deduction u/s 80P(2)(d). In the present case, the interest being received by the Appellant from Punjab State Cooperative Agricultural Development Bank, Chandigarh, which clearly falls within the ambit of Section 80P(2)(d). Thus, it is the income derived by the Appellant from its investments with another cooperative society, namely, Punjab State Cooperative Agricultural Development Bank (SADB). We accept that the grievance of the appellant is justified and accordingly following the coordinate bench and judicial precedent, we hold that appellant is eligible for deduction u/s 80P(2)(d) of the Act and therefore, the addition is deleted. Disallowance of payment to Gratuity Fund - CIT(A) has observed that Gratuity Fund allowable as per Rule at 8.33% and Excess contribution to Gratuity Fund has been disallowed - AR submitted that Id. CIT (Appeals) has ignored the fact that such payment of gratuity was according to the terms, conditions and directions of the Head office - HELD THAT:- As we hold that since the AO disallowed the excess contribution to gratuity fund contributed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appreciating the fact that only for accounting purposes interest received of Rs 1390954 and paid of Rs 8829819 have been separately recorded in the books of account. The CIT(Appeals) has erred in confirming the addition without appreciating the fact that entry in books of accounts can't be taken as a base for making the addition. 5. Without prejudice to the above grounds, the CIT (Appeals) has erred in confirming the addition disregarding the fact that interest received at Rs 1390954/- was eligible for deduction u/s. 80P(2)(d) of the Income Tax Act, 1961. 6. The Id. CIT(Appeals) has grossly erred in law and on the facts of the case, by confirming the addition of Rs. 36,981 /- made by the AO on account of disallowance of payment to Gratuity Fund. The Id. CIT (Appeals) has ignored the fact that such payment of gratuity was according to the terms, conditions and directions of the Head office. 7. That the order passed by Ld CIT (Appeals) u/s 250 of Income tax Act 1961 is bad in law as the same has been made without considering the submissions filed by the appellant. 8. The above grounds of appeal may kindly be allowed to be amended, altered and or modified in the interest of natur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idends derived by the cooperative society from its investments with any other cooperative society. The relevant provisions of Section 80P is reproduced hereunder for you ready reference: - Deduction in respect of income of co-operative societies. 80P. (1) Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in subsection (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in subsection (2), in computing the total income of the assessee. (2) The sums referred to in sub-section (1) shall be the following, namely: (d) in respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other co-operative society, the whole of such income. He pleaded that the addition made by the Ld. AO may be deleted and the Appellant's ground of appeal may be allowed and the Hon ble ITAT Amritsar Bench in the case of The Khan Khana Coop. Agri. Service Society Ltd. v. Asstt. CIT, Circle-2, Jalandhar in ITA No. 210/Asr/2024 order dated 26.06.2024 is reproduced the following relevant para is as under: 6. In the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd case law referred. We find that the appellant is a cooperative society engaged in the activity of providing credit facility to its members. The assessee is duly registered under the Punjab Societies Registration Act, 1961, with the office of The Registrar co-operative societies, Punjab (Assessment Order para 2, page 1). 8. In the present case, the interest received by the Appellant from Punjab State Cooperative Agricultural Development Bank, Chandigarh, clearly falls within the ambit of Section 80P(2)(d). It is income derived by the Appellant from its investments with another cooperative society, namely, Punjab State Cooperative Agricultural Development Bank (SADB).In our view, the statutory provision under Section 80P(2)(d) is unambiguous and explicit in its scope. It allows for a deduction in respect of interest income derived from investments with other cooperative societies. The interest received by the Appellant squarely meets this criterion and is therefore eligible for deduction under Section 80P(2)(d).Accordingly, the CIT(A) ought to have recognized the eligibility of the interest received by the Appellant for deduction under Section 80P(2)(d). 9. The Hon ble SUPREME COU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icultural Society Ltd. Vs. Asst. Commissioner of Income Tax, Circle -2, Jalandhar decided the issue in favour of the assessee by following the principle of law laid down by the Hon'ble Supreme Court in the case of the Pr. Commissioner of Income Tax 17, Mumbai Vs. M/S. Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Limited [Civil Appeal No. 8719/20221. 12. In another case of THE DHAMAI COOPERATIVE AGRICULTURE SERVICE SOCIETY LTD. Vs ITO HOSHIARPUR, 2023 9 TMI 1436 on denial of deduction claimed u/s 80P(2)(d) - interest earned from cooperative Banks - HELD THAT:- Section 80P(2)(d) of the Act allows whole deduction of income by way of interest or dividend derived by cooperative Society from its investments with any other co-operative society. This provision does not make any distinction with regard to the source of investment because this section envisages deduction in respect of any income derived by co-operative society from its investment with a cooperative society. So, the Revenue is not required to look another of investment whether it was formed as required within time or otherwise. As decided in The Kot Ram Dass Coop. Thrift Credit Society Ltd. Jalandhar [2023 (6) TMI 871 ..... 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