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TMI Blog2024 (8) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... fter referred to as 'Ld. CIT(A), NFAC') has grossly erred on facts and in law in confirming the addition Rs. 7,60,197/- by not allowing deduction u/s. 80P(2)(a)(i) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'}, despite the fact that the appellant is a Co-operative Thrift & Credit Society and the income of Rs. 7,60, 197/- is attributable to the activities mentioned in section 80P(2)(a)(i) of the Act. 2. That on the facts and in the circumstances of the case the Ld. CIT(A), NFAC has grossly erred on facts and in law in confirming the addition Rs. 7,60,197/- by not allowing deduction u/s. 80P(2)(a)(i) of the Act by not following the 'principle of judicial precedence' as the jurisdictional judicial pronouncements are in favour of the appellant. 3. That on the facts and in the circumstances of the case the Ld. CIT(A), NFAC has grossly erred on facts and in law in confirming the addition Rs. 7,60,197/- by not allowing deduction u/s. 80P(2)(a) (i) of the Act by not appreciating and accepting various judicial pronouncements in favour of the appellant relied upon. 4. That, without prejudice to ground No. 1 to 3, on the facts and in the circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vestments/Advances/Loans; and [iii]. Deduction from total income under Chapter VI-A. 3.1. The assessee is a Co-operative Credit Society Ltd. and filed its return of income under the status of "AOP" for the year under consideration on 31.08.2018, declaring total income at Rs. NIL. The return of income was processed by Centralized Processing Centre ("CPC") u/s 143(1) of the Income Tax Act, 1961 ("the Act"). Therefore, statutory notices were issued to the assessee. In response to the notices, the assessee submitted its reply alongwith details as called for. It was noticed by the Assessing Authority that the assessee had claimed deduction of INR 43,29,747/- u/s 80P of the Act. The Assessing Officer ("AO") further noticed that the amount of INR 7,60,197/- is interest income derived from deposits in banks/Co-operative banks. The Assessing Authority was of the view that such deduction is not allowable as the income is not from the business activities of the assessee. But in this case, the assessee had deposited its surplus fund with banks and earned interest income thereon which in the opinion of the Assessing Authority, from other sources. The Assessing Authority did not accept the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Allowing Ground No. 10 pertaining to charging of Interest Rs. 85,766/- u/s 234B of the Act without any direction. 5. Allowing Ground No. 11 pertaining to charging of Interest Rs. 67,408/- u/s 234C of the Act without any direction." 7. Ld. Counsel for the assessee re-iterated the submissions as made in the synopsis. He further submitted that under the identical facts, the Tribunal has allowed the deduction claimed similarly situated the assessee. In support of this contention, the assessee has placed reliance on the decision of the Tribunal in ITA No.4078 & 2036/Del/2019 and ITA No.6935/Del/2018 in the case of The Mantola Cooperative Thrift & Credit Society Ltd. vs ITO vide order dated 27.07.2020. Further, reliance is placed on the decision of Hon'ble Delhi High Court in the case of Mantola Co-operative Thrift & Credit Society Ltd. vs CIT in ITA No.569/2013 vide order dated 27.08.2014 (Delhi) had restored the issue to Ld.CIT(A) in respect of expenses. Ld. Counsel for the assessee also relied on the decision of the Tribunal in the case of ITO vs The Jwala Cooperative Urban Thrift and Credit Society Ltd. in ITA No.2982/Del/2018. Ld. Counsel for the assessee also placed relian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of clarity, the relevant contents of the decision of Division Bench of the Tribunal are reproduced as under:- 16. "We have given a thought to consider whether the cooperative bank wherein the assessee made deposits out of this surplus fund be considered as a co-operative society, for if a co-operative bank is considered to be a co-operative society than only the interest earned by the assessee on the deposits would be eligible for deduction u/s 80P(2)(d). We find that cooperative society is a broad and larger umbrella under which the co-operative banks do perform. All cooperative societies may not be banks but all co-operative banks are deemed to be co-operative societies. According to banking Regulations Act, a co-operative society bank as the same meaning of the cooperative society. 17. Further, we have also given a thought as to the interest earned by the surplus funds. As per the Income Tax Act, there is no such stipulation or prerequisite as to the nature of the funds . So far as the principles of interpretation to a taxing statue is concerned, we derive it from Cape Brandy Syndicate Vs IRC 1 KB 64 as quoted by the Hon'ble High Court of Punjab & Haryana, Hon'ble J Iqbal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 2 which is chargeable to income-tax under the head "Income from other sources", deductions , so far as may be, in accordance with the provisions o f clause (va) o f sub-section (1) of section 36 ;] (ii) in the case o f income o f the nature referred to in clauses (ii) and (iii) o f sub-section (2) o f section 56, deduction s, so far as may be, in accordance with the provisions o f sub-clause (ii) of clause (a) and clause (c) o f section 30, section 31 and [subsections (1) [***] and (2)] o f section 32 and subject to the provisions o f [section 38]; [(iia) in the case of income in the nature o f family pension , a deduction of a sum equal to thirty-three and one-third per cent of such income or [ fifteen] thou sand rupees, whichever is less. Explanation .-For the purposes of this clause, " family pension" means a regular monthly amount payable by the employer to a person belonging to the family of an employee in the event of his death ;] (iii) any other expenditure (not being in the nature of capital expenditure) laid out or expended wholly and exclusively for the purpose of making or earning such income; [(iv) in the case of income of the nature referred to in clause (viii) o f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 34C of the Act. The levy of interest is consequential in nature hence, I hold accordingly. 15. Ground No.10 raised by the assessee is general in nature, needs no separate adjudication hence, dismissed. 16. In the result, the appeal of the assessee is partly allowed. ITA No.3693/Del/2023 [Assessment Year : 2020-21] 17. Now, I take up the appeal of the assessee in the Assessment Year 2020- 21 i.e. ITA No.3693/Del/2023. The assessee has raised following grounds of appeal:- 1. "That on the facts and in the circumstances of the case the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as 'Ld. CIT(A), NFAC'} has grossly erred on facts and in law in confirming the addition Rs. 5,42,880/- by not allowing deduction u/s. 80P(2)(a)(i) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'}, despite the fact that the appellant is a Co-operative Thrift & Credit Society and the income of Rs. 5,42,880/- is attributable to the activities mentioned in section 80P(2)(a)(i) of the Act. 2. That on the facts and in the circumstances of the case the Ld. CIT(A), NFAC has grossly erred on facts and in law in co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case the Ld. CIT(A), NFAC has grossly erred in law in not disposing of following Ground No. 7: "That on the facts and in the circumstances of the case the AU has grossly erred in determining Rs. 25,28,856/- the sum payable u/s 156 of the Act in consequence of the impugned assessment, in as much as the tax has been computed on Rs. 57,76,910/- whereas the total income has been assessed at Rs. 5,42,880/-. Without prejudice, prayed that the demands deserves to be modified and cancelled." 9. That, without prejudice to ground No. 1 to 3, on the facts, the case the Ld. CIT(A), NFAC has grossly erred on facts and in law in confirming the addition Rs. 5,42,880/- by not allowing deduction u/s. 80P(2) (d) of the Act by not appreciating and accepting various judicial pronouncements in favour of the appellant relied upon. 10. That on the facts and in the circumstances of the case the Ld. CIT(A), NFAC has erred in law in allowing Ground No. 8 pertaining to charging of Interest Rs. 89,960/- u/s 234A of the Act without any direction and without disposing the ground specifically. 11. That on the facts and in the circumstances of the case the Ld. CIT(A), NFAC has erred in law in allowing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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