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TMI Blog2024 (9) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... income to the assessee i.e. PDCC is although is a cooperative bank in common parlance but not a co-operative bank strictly within the meaning assigned in Part V of BRA. In view therefore there is much less merits in application of s/s (4) of section 80P of the Act in denying the 80P(2)(d) deduction to the assessee. We find that, once claimant assessee falls outside the ambit of explanation (a) to section 80P(4) of the Act then denial would be contralegem finds fortified in case of PCIT Vs Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Ltd. [ 2023 (5) TMI 372 - SC ORDER] where the assessee was a cooperative credit society engaged in the business of providing credit facilities to its members. The assessee claimed deduction u/s 80P(2)(a)(i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [ Ld. NFAC/CIT(A) hereafter] which in turn arising out of order of intimation dt. 19/10/2022 passed u/s 143(1) of the Act for assessment year 2021-22 [ AY hereinafter]. 2. The long and short of the case is that; the assessee is a co-operative housing society registered under the provisions of Maharashtra State Co-op. Societies Act. For the year under consideration the assessee was in receipt of (a) interest income of ₹1,47,640/- derived by or accrued to it from investment held with co-operative banks/institutions in the form of Fixed/Term Deposit Receipt [ TDR hereafter] and (b) interest income of ₹3,979/- derived by or accrued to it on the balance of saving account maintained with such co-operative banks/institutions. 3. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it by provisions of s/s (4) of section 80P of the Act. While denying said deduction the Revenue strongly places its reliance on Mavilayi Service Co-operative Bank Ltd. Vs CIT [2021, 431 ITR 1 (SC)] and on PCIT Vs Totagars Co-operative Sale Society [2017, 83 Taxmann.com 140 (Kar)]. In nutshell the sole substantive dispute in the present case is not over eligibility of the assessee to claim deduction u/s 80P(2)(d) of the Act but over qualification of interest in view of s/s (4) of section 80P of the Act. 7. First of all, we are mindful to state that, the allowability of deduction u/s 80P(2)(d) of the Act against the interest on deposits dividend from shares held by one co-operative society with another co-operative society is no-more res-inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as well as the payer of the interest/dividend income both are societies registered under the State Co-operative societies Act then in our considered view noting can preclude an assessee from claiming such interest/dividend as deductible u/s 80P(2)(d) of the Act. And this continues to hold the field irrespective of class within which such recipient cum claimant assessee as well as the payer society is registered. What is indispensable for the purpose of clause (d) of s/s (2) of section 80P of the Act is the statutory/legal establishment under the applicable cooperative society s law and not the class within which they fall or registered. 9. Conversely, where an assessee is a co-operative society is not a cooperative bank within the meaning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose it undoubtedly slakes the second condition envisaged i/s 80P(2)(d) of the Act. 11. Admittedly, the appellant assessee is a housing co-operative society and is neither a credit co-operative society nor a co-operative bank and (b) the payer of interest income to the assessee i.e. PDCC is although is a cooperative bank in common parlance but not a co-operative bank strictly within the meaning assigned in Part V of BRA. In view therefore there is much less merits in application of s/s (4) of section 80P of the Act in denying the 80P(2)(d) deduction to the assessee. 12. We find that, once claimant assessee falls outside the ambit of explanation (a) to section 80P(4) of the Act then denial would be contralegem finds fortified in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perative banks which are cooperative society and also possesses a licence from RBI to do banking business. It is further held that the limited object of section 80P(4) is to exclude Co-operative Banks that function at par with other commercial banks, therefore Section 80P(4) is relevant only where the claimant assessee is a cooperative bank and who claims deduction u/s 80P(2) of the Act which is not the facts of the present case. The said decision of the Hon'ble Karnataka High Court PCIT Vs Totagars Cooperative Sale Society (supra) is distinguishable and in any case, the later decision of Hon'ble Supreme Court in case of Mavilayi Service Cooperative Bank Ltd . (Supra) wherein the correct legal preposition has been laid down by the H ..... X X X X Extracts X X X X X X X X Extracts X X X X
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