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TMI Blog2024 (9) TMI 577X X X X Extracts X X X X X X X X Extracts X X X X ..... Hence, the appeal is liable to be allowed. - Shri Prashant Maharishi, Accountant Member And Shri Sunil Kumar Singh, Judicial Member For the Assessee : Shri. Ajay Singh For the Revenue : Shri. Rajneesh Yadav Sr. DR ORDER PER SUNIL KUMAR SINGH (J.M): The facts in the two appeals are similar and issues arising are identical. The decision on facts and law for one appeal for relevant assessment year would answer the issue involved in the other year. Therefore, the two appeals are being decided by the common order for the sake of brevity. The facts only in ITA no. 2330/MUM/2024 are being narrated as under: ITA No. 2330/MUM/2024 (Assessment Year : 2018 19) 1. This appeal has been preferred against the impugned order dated 14.08.2023 passed in Appeal no. NFAC/2017-18/10012224 by the Ld. Commissioner of Income tax(Appeals)/ National Faceless Appeal Centre (NFAC) [hereinafter referred to as the CIT(A) ] u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as Act ] for the Assessment year [A.Y.] 2018-19, wherein learned CIT(A) has dismissed assessee s appeal with the direction to AO for adjustment of proportionate cost, administrative and other expenses incurred in earning interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or both the parties. 7. The main point for determination under appeal is as to whether the appellant Blue Rose Industrial Premises Co-operative Society Ltd. is entitled to the deduction of Rs. 37,45,701/- u/s. 80P(2)(d) of the Act on the interest received from investment in the said co-operative bank? 8. Learned AR has submitted that this appeal was preferred before the Tribunal on 01.05.2024 against the impugned order dated 14.08.2023 by a delay of 201 days. The said delay was caused due to failure of society s manager to timely inform the society in respect of the impugned order. Prayed to condone the delay. The appellant has further submitted that the issue involved in the present appeal is squarely covered by the order dated 31.10.2023 passed in assessee s own case by the co ordinate bench of ITAT Mumbai in ITA no. 2227/MUM/2023, for A.Y. 2020 21, Blue Rose Industrial Premises Co-operative Society Ltd. V. CIT(A)/NFAC Delhi. Appellant, thus, submits that the assessee is entitled to the benefit of section 80P(2)(d) of the Act and prayed to set aside the impugned order and allow the appeal. 9. Per contra, learned DR has opposed the assessee s prayer for the condonation of said del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve banks, which are co-operative societies which must possess a licence from the Reserve Bank of India to do banking business. In other words, if an entity does not require a licence to do banking business within the definition of banking under Section 5(b) of the BR Act, 1949, then it would not fall within the scope of sub-section (4) of Section 80P. Hon ble Supreme Court in Kerala State Co operative Agricultural and Rural Development Bank Ltd. (KSCARDB) V The Assessing Officer Trivendrum and Ors, in Civil Appeal no. 10069 of 2016, vide judgment dated 14.09.2023 has also reiterated the same. 13. Hon ble Karnataka High Court in Principal Commissioner of Income Tax and another V Totgars Co-operative Sale Society, [2017] 392 ITR 74 (Karn.), has, after referring Hon ble Apex Court Judgement in Totgar (Supra) held in para 7,8,9,10 as under: 7. However, the contention being taken by the learned counsel is untenable. For the issue that was before the Income-tax Appellate Tribunal, was a limited one, namely whether for the purpose of section 80P(2)(d) of the Act, a co-operative bank should be considered as a co-operative society or not? For, if a co-operative bank is considered to be a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y. 2020-21, held in Para 5.2, 5.3 and 5.4 as under: 5.2 The provisions of section 80P(2)(d) of the Act reflects Co-operative Society but not the Co-Operative Bank therefore question emerge whether income earned by way of interest or dividend from the investments made with any other Cooperative Bank is allowable as deduction under section 80P(2)(d) of the Act, or not. 5.3 The Hon ble Co-ordinate Benches of the Tribunal in various cases including in Belgaum Coal and Coke Consumer Co-operative Association Ltd. Vs. ITO in ITA No. 102/PAN/2018 decided on 06.04.2022, Nawbharat Darpan Co-operative Credit Society Ltd. Vs. CIT in ITA No. 5288 and 5289/Mum/2018 decided on 25.11.2021, Borivali Jan Kalyan Sahkari Patpedhi Ltd. Vs. ITO in ITA No. 5230/Mum/2019 decided on 30.03.2021 and in the case of Pathare Prabhu Co-operative Housing Society Ltd. Vs. ITO in ITA No. 1346 1347/(MUM) of 2023 decided on 27.07.2023 (2023) 153 taxmann.com 714 (Mum. Trib.) dealt with identical issue as to whether the interest/dividend income earned from Co-operative Bank is allowable as deduction under section 80P(2)(d) of the Act or not and ultimately allowed the deduction claimed as interest/dividend income earn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Interest, which was claimed as a deduction under section 80P(2)(d) of the Act. The AO denied the deduction under section 80P(2Xd) of the Act on the basis that the Cooperative Bank is covered under the provisions of section 80P(4) of the Act. We find that the Hon ble Supreme Court in Mavilayi Service Co-operative Bank Ltd. v. CIT [2021] 123 taxmann.com 161/279 Taxman 75/431 ITR 1 while analysing the provisions of section 80P(4) of the Act held that section 80P(4) is a proviso to the main provision contained in section 80P(1) and (2) and excludes only Co-operative Banks, which are Co-operative Societies and also possesses a licence from RBI to do banking business. The Hon'ble Supreme Court further held that the limited object of section 80P(4) is to exclude Cooperative Banks that function at par with other commercial banks i.e. which lend money to members of the public. Thus, we are of the considered view that section 80P(4) of the Act is of relevance only in a case where the assessee, who is a Co-operative Bank, claims a deduction under section 80P of the Act which is not the facts of the present case. Therefore, we find no merits in the aforesaid reasoning adopted by the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... co-operative society had been defined under sec. 2(19) of the Act, as under:- (19) Co-operative society means a cooperative 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; We are of the considered view, that though the co-operative bank pursuant to the insertion of Sub-section (4) of sec. 80P would no more be entitled for claim of deduction under sec. 80P of the Act, but however, as a co-operative bank continues to be a co-operative society registered under the Cooperative Societies Act, 1912 (2 of 1912), or under any other law for the time being enforced in any state for the registration of co-operative societies, therefore, the interest income derived by a co-operative society from its investments held with a co- operative bank, would be entitled for claim of deduction under sec.80P(2)(d) of the Act. 13. We find that the learned CIT(A) has placed reliance upon the decision of the Hon'ble Karnataka High Court in Pr. CIT v. Totagars Co-operative Sales Society [2017] 83 taxmann.com 140/395 ITR 611, wherein it was held that interest earned by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end from investments made with any other co-operative bank is allowable as deduction u/s. 80P(2)(d) in assessee s own case for the A.Y. 2020-21. Nothing has been brought to our notice that the investee co-operative bank which is also a co-operative society is in possession of License from RBI to do banking business and did function at par with other commercial bank. The assessee is thus entitled for the benefit u/s. 80P(2)(d) of the Act. The aforesaid point is accordingly determined in favor of the assessee and against the revenue. The impugned order passed by learned CIT(A), thus cannot be sustained. Hence, the appeal is liable to be allowed. ITA No. 2329/MUM/2024 (Assessment Year : 2021 22) 16. This appeal has been preferred against the impugned order dated 02.08.2023 passed in Appeal no. NFAC/2020-21/10223202 by the Ld. Commissioner of Income tax(Appeals)/ National Faceless Appeal Centre (NFAC) [hereinafter referred to as the CIT(A) ] u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as Act ] for the Assessment year [A.Y.] 2021-22, wherein learned CIT(A) has confirmed the addition of Rs. 27,11,654/- made vide intimation order dated 02.08.2023 passed u/s. 143(1) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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