ICHALKARANJI VYAPARI SAHAKARI PATSANSTHA LTD, ICHALKARANJI,ICHALKARANJI vs. INCOME TAX OFFICER, WARD-1, ICHALKARANJI, ICHALKARANJI

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ITA 478/PUN/2023Status: DisposedITAT Pune07 June 2023AY 2020-214 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that Section 80P(4) does not deny eligibility under Section 80P(2)(d) for cooperative societies on interest income earned from deposits with other cooperative banks. Therefore, the deduction should be granted.

What were the facts?

The assessee, a cooperative credit society, claimed deduction under Section 80P for interest income earned from deposits with other cooperative banks. The Assessing Officer denied this deduction, relying on a Supreme Court judgment.

What were the issues?

Whether interest income earned by a cooperative society from deposits with other cooperative banks is eligible for deduction under Section 80P(2)(d) despite the insertion of Section 80P(4).

Which sections of the Income-tax Act were involved?

Section 80P,Section 80P(2)(a)(i),Section 80P(2)(d),Section 80P(4)

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, SMC BENCH, PUNE

Before: SHRI R.S. SYAL

For Appellant: Shri Pramod Shingte
For Respondent: Shri Gurmel Singh

आदेश / ORDER

PER R.S. SYAL, VP:

1.

This appeal by the assessee is directed against the order dated 17-03-2023 passed by the CIT(A) in National Faceless Appeal Centre, Delhi u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2020-21.

2.

The only issue raised herein is against the denial of deduction u/s.80P in respect of interest income earned from the deposits with other cooperative banks.

3.

Briefly stated, the facts of the case are that the asessee is a Cooperative credit society registered under Maharashtra State Co-

Ichalkaranji Vyapari Sahakari Patsanstha Ltd., operative Societies Act engaged in the business of providing credit facilities to its members out of deposits collected from the members.

It claimed deduction u/s.80P(2) in respect of interest income of Rs.40,65,267/- from the deposits kept with other cooperative banks.

The Assessing Officer (AO) did not allow the deduction either u/s.80P(2)(a)(i) or u/s.80P(2)(d), by relying on judgment of the Hon’ble Supreme Court in the case of PCIT Vs. Totgars Co-operative Sale Society Ltd., 83 taxmann.com 140. The action of the Assessing Officer came to be approved in the first appeal on this issue, against which the assessee has come up in appeal before the Tribunal contending that the deduction be allowed u/s 80P(2)(d) of the Act.

4.

After considering the rival submissions and perusing the relevant material on record, it is seen that the assessee is a co-operative society and earned interest income amounting to Rs.40,65,267/- from the deposits with other Co-operative Banks. The extant issue is no more res integra in view of the catena of decisions delivered by the Pune Benches, including the Rena Sahakari Sakhar Karkhana Ltd. Vs. Pr.CIT (ITA No.1249/PUN/2018) holding, vide its order dated 07-01-2022, that though co-operative banks, other than primary agricultural credit society or a primary co-operative agricultural and rural development bank, are not eligible for deduction pursuant to Ichalkaranji Vyapari Sahakari Patsanstha Ltd., insertion of section 80P(4) w.e.f. 1.4.2007, but this provision does not dent the otherwise eligibility u/s 80P(2)(d) of the Act of a co-operative society on interest income on investments/deposits parked with a co- operative bank, which is a registered co-operative society as per section 2(19) of the Act, defining co-operative society to mean a co- operative society registered under the Co-operative Societies Act, 1912 or under any law for the time being in force. The payer of interest is also a Co-operative society registered under the Cooperative Societies Act. Respectfully following the decision of the Division Bench, I overturn the impugned order and direct to grant deduction u/s.80P(2)(d) of the Act on the amount of interest earned from various cooperative banks.

5.

In the result, the appeal is allowed. Order pronounced in the Open Court on 07th June, 2023.

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