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TMI Blog2024 (12) TMI 703X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act in respect of interest income earned on investment made with other cooperative banks. Assessee appeal allowed. - Shri Saktijit Dey, VP And Shri Narendra Kumar Billaiya, AM For the Appellant : Shri Prashant Ghumare For the Respondent : Ms. Monika H. Pande, Sr. AR ORDER PER SAKTIJIT DEY, VP: The present appeal by the assessee is directed against the order dated 05.09.2024 passed by National Faceless Appeal Centre (NFAC), Delhi, pertaining to assessment year (A.Y.) 2017-18. 2. The solitary issue arising for consideration in the present appeal is whether the assessee is entitled to claim deduction u/s. 80P(2)(d) of the Income Tax Act, 1961 ( the Act for short), qua the interest income on investments made in a cooperative bank. 3. Briefly stated, the facts are that the assessee is a resident cooperative credit society engaged in the business of providing credit facilities to its members. As stated, the assessee has been created in terms with the provisions of Maharashtra Co2 operative Societies Act, 1960. For the A.Y. under dispute, assessee has filed its return of income on 30.10.2017, declaring Nil income after claiming deduction of Rs. 80,53,524/- u/s. 80P of the Act. In co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered rival submissions, we find, the adverse conclusion drawn by ld. First Appellate Authority qua the deduction claimed by the assessee u/s. 80P(d) of the Act with regard to interest earned from cooperative bank is primarily based on decisions of Hon ble High Court of Karnataka and Hon ble High Court of Gujarat, as discussed elsewhere in the order. However, as noted by us, while deciding identical issue in case of Palm Court M Premises Cooperative Society Ltd. Vs. Principal Commissioner of Income-tax, [2022] 145 taxmann.com 415 , the Coordinate Bench, having taken note of the decision of the Hon ble Karnataka High Court in case of PCIT Vs. Totgars Cooperative Sale Society (supra) has allowed the claim of deduction u/s. 80P(2)(d) of the Act. The following observations of the Coordinate Bench are of much relevance. 8. We have heard the rival submissions and perused the materials on record. It is evident that the assessee is a co-operative housing society registered under the Co-operative Housing Societies Act and that the assessee has earned interest income of Rs. 12,90,210/- which was claimed as deduction under section 80P(2)(d). It is observed that the assessee has invested the su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osition, we would like to place our reliance on the decision of Petit Towers Co-op. Housing Society Ltd.'s case (supra) wherein the co-ordinate bench has observed as under:- 8. We have given a thoughtful consideration to the contentions advanced by the Id. Authorized representatives for both the parties in context of the aforesaid issue under consideration. As stated by the Id. A.R, and rightly so, the issue that interest received by a co-operative society on its deposits with co- operative banks would be eligible for deduction u/s 80P(2)(d) of the Act is covered in assessee's favour by orders of the various coordinate benches of the Tribunal in the following cases: (1) M/s Solitaire CHS Ltd. v. Pr. CIT-26, Mumbai, ITA No. 3155/Mum/2019, dated 29-11- 2019 (ii) Land and Cooperative Housing Society Ltd. v. ITO (2017) 46 CCH 52 (Mum.) (iii) Mis. C. Green Cooperative Housing and Society Ltd. v. ITO-21(3)(2), Mumbai (ITA No. 1343/Mum/2017, dated 31-3-2017. (iv) Marvwanjee Cama Park Cooperative Housing Society Ltd. v. ITO-Range 20(2)(2), Mumbai (ITA NO. 6139/Mum/2014, dated 27-9-2017. (v) Kaliandas Udyog Bhavan Pemises Co-op. Society Ltd. v. ITO, 21(2)(1), Mumbai. In the aforesai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 7. After necessary deliberations, we are unable to persuade ourselves to be in agreement with the view taken by the Pr. CIT. Before proceeding any further, we may herein reproduce the relevant extract of the aforesaid statutory provision, viz. Sec. 80P(2)(d), as the same would have a strong bearing on the adjudication of the issue before us. 80P(2)(d) (1). Where in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee. (2). The sums referred to in sub-section (1) shall be the following, namely:- (a) to (c)** (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; On a perusal of sec. 80P(2)(d), it can safely be gathered that interest income derived by an assessee co- operative society from its investments held with any other co-operative society shall be deducted in computing its total income. We may herein obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s beld with a cooperative bank is covered in favour of the assessee in the following cases: (1) Land and Cooperative Housing Society Ltd. v. ITO (2017) 46 CCH 52 (Mum) (ii) M/s C. Green Cooperative Housing and Society Ltd. v. 110-21(3)(2), Mumbai (ITA No. 1343/Mum/2017, dated 31-3-2017 (iii) Marvwanjee Cama Park Cooperative Housing Society Ltd. v. ITO-Range-20(2)(2), Mumbai (ITA No. 6139/Mum/2014, dated 27-9-2017. (iv) Kaliandas Udyog Bhavan Pemises Co-op. Society Ltd. v. 170, 21(2) (1), Mumbai. We further find that the Hon'ble High Court of Karnataka in the case of Pr. Commissioner of Income-tax and Anr. v. Totagars Cooperative Sale Society (2017) 392 ILR 74 (Kam) and Hon'ble High Court of Gujarat in the case of State Bank Of India v. CIT (2016) 389 ITR 578 (Guj), had held, that the interest income eamed by the assessee on its investments with a cooperative bank would be eligible for claim of deduction under sec. 80P(2)(d) of the Act. Still further, we find that the CBDT Circular No. 14, dated 28- 12-2006, also makes it clear beyond any scope of doubt that the purpose behind enactment of sub-section (4) of Sec. 80P was that the co-operative banks which were functioning at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er sec.80P(2)(d) of the Act. 9. Be that as it may, in our considered view, as the A.O while framing the assessment had taken a possible view, and therein concluded that the assessee would be entitled for claim of deduction under sec. 80P(2)(d) on the interest income earned on its investments/deposits with co-operative banks, therefore, the Pr. CIT was in error in exercising his revisional jurisdiction u/s 263 for dislodging the same. In fact, as observed by us hereinabove, the aforesaid view taken by the A.O at the time of framing of the assessment was clearly supported by the order of the jurisdictional Tribunal in the case of Land and Cooperative Housing Society Ltd. v. ITO (2017) 46 CCH 52 (Mum). Accordingly, finding no justification on the part of the Pr. CIT, who in exercise of his powers under sec. 263, had dislodged the view that was taken by the A.O as regards the eligibility of the assessee towards claim of deduction under sec. 80P(2)(d), we set aside his order and restore the order passed by the A.O under sec. 143(3), date 14- 9-2016. As the facts and the issue involved in the present case before us remains the same as were there before the Tribunal in the case of M/s Sol ..... X X X X Extracts X X X X X X X X Extracts X X X X
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