CO-OPERATIVE CANE DEVELOPMENT UNION LIMITED,LAKHIMPUR KHERI vs. THE ASSESSMENT UNIT, NFAC, NFAC

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW ‘B’ BENCH, LUCKNOW BEFORE SH. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SH. NIKHIL CHOUDHARY, ACCOUNTANT MEMBER ITA No.217/LKW/2026 A.Y. 2022-23 Co-operative Cane Development The Assessment Unit, Income Union Limited, Ayyubi Chamber, vs. Tax Department National Raniganj, Lakhimpur Kheri, U.P. Faceless Appeal Centre, Delhi 262701, PAN:AAATC5045R (Appellant) (Respondent) Assessee by: Sh. K.R. Rastogi, C.A. Revenue by: Smt. Pratibha Singh, ACIT (DR) Date of hearing: 09.07.2026 Date of pronouncement: 31.07.2026 O R D E R PER SH. NIKHIL CHOUDHARY, ACCOUNTANT MEMBER: This appeal has been filed by the assessee against the order passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), dated 12.12.2025, wherein the learned CIT(A) has dismissed the assessee's appeal against the assessment order passed by the Assessing Officer under section 143(3) read with section 144B of the Income-tax Act, 1961, for the Assessment Year 2022-23 on 13.03.2024. The grounds of appeal preferred are as under:- “(1) That the Ld. C.I.T. (A) erred on facts and in law in not allowing deduction u/s 80P(2)(a)(iii) & 80P(2)(i) of I. T. Act on Interest received on Investments held with Banks in form of F.D.R.'s & Interest on Saving Bank Account Rs.1,21,25,454/-.

ITA No.217/LKW/2026 A.Y. 2022-23 Cooperative Cane Development Union Ltd. (2) That the Ld. C. I. T. (A) and Ld. A. O. have both erred on Facts and in Law in not considering that under the similar sets of facts and circumstances in the Appellant's own case for A. Y. -2012-13, the Ld. A. O., NFAC vide order dated 02.02.2024 have allowed the deduction u/s 80P of I. T. Act on Interest earned from Banks on F.D.R.'s and Saving Bank Account. (3) That the Ld. C.I.T. (A) erred on facts and in law in not considering that the Law has used the word "attributable" and not the word "derived" in section 80P so as to include income from sources other than the actual conduct of the Business of the Society and thus Interest Income on FDR's & S. B. A/c from nationalized bank is attributable to the business of providing credit facilities and providing assistance to cane growers for better development of cane crops. (4) The Ld. C.I.T.(A) erred on facts and in law in not considering that the funds of the Society in form of Share Capital from members and the society being co- operative society is statutorily required to maintain a Reserve Fund of its profit and thus the investments in form of deposits with Banks to the extent of the Share Capital and Reserve Funds cannot be said to be made out of surplus funds. (5) That Ld. C.I.T. (A) erred on facts and in law in not considering that the P. F. Balance of seasonal employees of society which is held in the form of deposits are not the investments of the society and accordingly interest accruing on the said amount cannot be said to be the Income of the Society. WITHOUT PREJUDICE TO ABOVE (6) That the Authorities below erred on facts and in law in not allowing proportionate deduction for Management Expenses and Interest paid debited in the profit and Loss Account from the gross interest of Rs. 1,21,25,454/- (7) That the Authorities erred on facts and in law in not considering that only the real income/profit can be Taxed and accordingly, the expenses incurred in earning the said income has to be determined and deducted from the Gross Income. (8) That the addition made is highly excessive, contrary to the facts, law and principal of natural justice and without providing sufficient time and opportunity to have its say on the reasons relied upon by CIT (A).”

ITA No.217/LKW/2026 A.Y. 2022-23 Cooperative Cane Development Union Ltd. disclosed gross total income of Rs. 2,26,06,903/- including interest of 1,57,70,814/- (Rs. 36,45,360/- from loans advanced to its members and Rs. 1,21,25,454/- earned from FDRs and other deposits with cooperative as well as nationalised banks). The assessee contended before the Assessing Officer that the Hon’ble Supreme Court had decided the issue of interest income in its case in favour of the assessee and remanded the proceedings back to the file of the Assessing Officer, who at the time of finalisation of the set aside assessment proceedings had allowed the claim made by the assessee. However, the Assessing Officer, observed that in the above referred judgment of Hon'ble Supreme Court, the assessee had claimed that it had parked its funds with nationalised and scheduled banks as per statutory requirements contained in the byelaws of the assessee as well as the State Cooperative Societies Act and it was for verification of the nature of reserves / surpluses of the assessee that were parked with various banks, that the matter was finally remanded back to the file of the Assessing Officer. The ld. AO further observed that during set aside assessment proceedings in the case of similar Cooperative Societies of the areas, those assessees had furnished details of the distribution of their profits / reserves and surpluses in accordance with the byelaws of the Society and the U.P. Cooperative Societies Act. It was in this context that the Assessing Officer had treated the interest earned by those assessees on FDRs with banks as income attributable to business activities of the assessee society and allowed the deductions under section 80P thereafter. However, in the current proceedings, the assessee had been asked from time to time to furnish the concrete details with respect to the nature of reserves and surpluses and also the supporting evidence to indicate that these were statutory reserves. But instead of furnishing the same, the assessee had only been providing a copy of 3

ITA No.217/LKW/2026 A.Y. 2022-23 Cooperative Cane Development Union Ltd. the assessment order for the A.Y. 2011-12 which was the matter that was 10 years old. Accordingly, since the assessee failed to furnish the requisite details with regard to claim deduction under section 80P(2)(a)(iii) of the Act, the ld. AO held that it was not eligible for getting the deduction under section 80P(2)(a)(iii). The ld. AO further pointed out that the exemption under section 80P(2)(d) was only available with respect to interest earned from other cooperative societies and therefore, the whole of the interest income of Rs. 1,21,25,454/- was not eligible for the deduction under section 80P. Accordingly, he issued a show cause notice proposing to add back the same. In response, the assessee submitted that it was not a business entity. The interest that was proposed to be disallowed was out of specified funds and specified NIDHIS as per the directives of their byelaws and the guidelines of the Registrar. It was submitted that the society in the immediately preceding year and also in subsequent years had the same reserves (inflated by 25% every year) and draws interest from it which qualified for deduction under section 80P(2)(a)(iii). The distribution of profit was as per section 58 of the Cooperatives Act and was also invested in specified NIDHIS as per the guidelines of the Registrar. There were no changes regarding its reserves, supplies, purchases, expenses in any year and since the matter was similar with two previous years, the disallowing of proposed interest would defeat the purpose of natural justice and the orders of the Hon’ble Apex Court and that of Hon’ble ITAT. However, the AO once again pointed out that the assessment orders relied upon by the assessee were for assessment years 2009-10, 2011- 12 and 2012-13 but in the present year, the assessee despite his repeated queries had not furnished any details in respect of the reserves pertaining to the current year, as furnished by it, in respect of those earlier assessment years. 4

ITA No.217/LKW/2026 A.Y. 2022-23 Cooperative Cane Development Union Ltd. It had failed to file quantitative details of various reserve funds and their cooperative head under which they have been formed as per its byelaws. Therefore, the issue on which the additions have been proposed remained unexplained by the assessee. Accordingly, the interest of Rs. 1,21,25,454/- was disallowed from consideration of deduction under section 80P and added back to the income of the assessee. 3. Aggrieved with the said assessment order, the assessee filed an appeal before the learned CIT(A). Before the learned CIT(A), it was submitted that the society was a cooperative society and its income was fully covered by the deduction under Chapter VI-A of section 80P(2)(a)(iii) by virtue of its registration with Registrar (Cooperative Cane Societies, UP) and following of cooperative laws and bye-laws. It was further submitted that the issue stood covered by the assessee's own case in the follow-up of the judgment of the Hon'ble Supreme Court. Since the interest was earned out of statutory deposits, the interest so earned was attributable to the cooperative activities and ought to have been exempted. The learned ITAT had previously held that the Totgars Cooperative Sales Society case could not be the basis of disallowance of interest, as the facts of cooperative cane societies were different. Reference was invited to the ITAT order dated 15-7-2015 on the said subject. Furthermore, other cooperative cane societies had been held to be exempted by various other CIT(A) of the NFAC. Furthermore, it had been held by the ITAT that even if any addition was made to the income of the cooperative society, it still qualifies for the rebate under section 80P. The learned CIT(A) considered the submissions of the assessee. He noted that for the current year, the assessee had failed to provide the necessary details regarding the nature and quantum of reserves held with the banks and had only furnished previous assessment orders. The 5

ITA No.217/LKW/2026 A.Y. 2022-23 Cooperative Cane Development Union Ltd. learned CIT(A) examined the decision of the ITAT, New Delhi in the case of Cooperative Cane Development Union vs. ITO, Ward-1(2), Ghaziabad in ITA No.4068/Del/2024 and ITA No.5830/Del/2024 and the decision of the Pune Tribunal in the case of ITU vs. Shri Bhaironath Multi State Cooperative Credit Society Limited, (2024) 164 Taxman.com 382. He also referred to the order of the Hon'ble Supreme Court in the case of CIT Jalandhar vs. Nawanshahr Central Cooperative Bank Limited, (2007) 15 SCC 611 but pointed out that in the assessee's case, the assessee was primarily engaged in the marketing of agricultural produce drawn by its members, and commission earned was the income attributable to the business eligible for deduction. As the assessee was not in the business of banking or providing credit facility to its members, interest from surplus funds invested/deposited with the banks could not be attributable to the business of marketing and agricultural produce unless there was a statutory/regulatory obligation to place / part with the surplus funds in the investments/deposits with the banks. From the assessment order, the AO had brought on record the fact that the assessee had not brought anything on record to justify its stand. Accordingly, he held that the decisions cited above by the assessee were distinguishable and not applicable, and he therefore confirmed the additions made by the AO. 4. The assessee is aggrieved with this assessment order and has accordingly come before us. Shri K.R. Rastogi, CA (hereinafter referred to as the learned AR) pointed out that the matter stood covered by the assessee’s own order in Assessment Year 2012-13, dated 13-10-2023, passed under section 143(3) read with section 254 read with section 144B of the Income Tax Act, wherein after considering the various judgments of the Hon'ble Supreme Court and Hon'ble Allahabad High Court, had remanded the matter back to the file of the 6

ITA No.217/LKW/2026 A.Y. 2022-23 Cooperative Cane Development Union Ltd. Assessing Officer and the Assessing Officer, after examining the matter, had come to the conclusion that the reserves created by the assessee were on account of its statutory obligations as per section 58 and 59 of the UP Cooperative Societies Act and Part 14 of the byelaws of the society. The learned AO had accordingly accepted the fact that the interest income earned was attributable to the business of the assessee. It was submitted that once this fact stood established, vide the principle of consistency, in the absence of no change in the activities of the assessee society, the AO was automatically obliged to allow the said deduction to the assessee. The learned AR also invited to our attention to an order passed by this Bench in Cooperative Cane Development Union, Maholi vs. ACIT, Sitapur, in ITA Nos.165, 166, and 168, wherein the matter had been analyzed in great detail and the appeal allowed in favour of the assessee. Accordingly, it was prayed that following the decisions, the assessee was deserving of relief which may be granted to it. 5. On the other hand, ld. Senior DR, Smt. Pratibha Singh (hereinafter referred to as the ld. DR) submitted that the case of the assessee was different from the cases that had been cited, including its own, because in those cases, the assessees had demonstrated how the reserves and surpluses deposited in banks were created out of statutory obligations whereas in the present case, despite numerous requests from the AO, the assessee had not given a breakup of the funds deposited in the bank from which the AO could assess whether these were on account of statutory responsibilities or otherwise. In the circumstances, the Assessing Officer was perfectly justified in not relying upon an assessment order pertaining to a financial year that preceded the present financial year by more than a decade, and in insisting that the evidence be

ITA No.217/LKW/2026 A.Y. 2022-23 Cooperative Cane Development Union Ltd. provided for the assessment year in question. She therefore justified the additions made by the AO and prayed that the matter may be sustained. 6. We have duly considered the facts and circumstances of the case. In our order, in Cooperative Cane Development Union Limited, Maholi vs. ACIT Sitapur, in ITA Nos.165, 166, and 168/LKW/2023, we have held as under:- “13. We have duly considered the facts and circumstances of the case. And also the arguments made by both parties. Since the case of the Revenue is based on the decision of the Hon’ble Supreme Court in the case of Totgars Cooperative Sale Society Limited vs. Income Tax Officer (supra), it would be pertinent to first consider the decision of Hon’ble Supreme Court in that matter. As pointed out by the ld. Sr. DR, as per the said judgment, the income in respect of which deduction is sought must constitute the operational income and not the other income which accrues to the society. In that particular case, the Hon’ble Supreme Court observed that, in the facts and circumstances of that case, the assessee society had earned interest on funds which were not required for business purposes at the given point of time. Therefore, as it clarified, on the facts and circumstances of that case, they rendered their judgment that such interest income fell in the category of, “other income” which had rightly been taxed by the Department under section 56 of the Act and therefore, was ineligible for deduction under section 80P of the Act. The two judgments of Hon’ble Allahabad High Court that have been cited by the ld. Sr. DR have followed the principle laid down by the Hon’ble Supreme Court and held, that the objects of the society did not provide for investment of money in a post office or bank and earn interest and therefore, the interest earned out of the investments made in the bank would be an interest, which in turn would be income from other sources that would be chargeable to tax under section 56 of the Act. However, as the ld. Authorized Representative has pointed out, the arguments of the nature that the fixed deposits were made on account of the Statutory provisions (of sections 58 and 59 of the U.P. Cooperative Societies Act in this case) and was therefore, the condition precedent to doing of business and accordingly “attributable” to the activities of the assesse cooperative, was not brought before the Hon’ble Allahabad High Court in either of the judgments cited by the ld. Sr. DR. Furthermore, M/s Cane Cooperative Development Council had appealed the judgment of Hon’ble Allahabad High Court in ITA No. 183/2016 to the Hon’ble Supreme Court in Civil Appeal No. 7405 to 7409 of 2021 and placed the statutory rules before the Hon’ble Supreme Court. After considering that such rules may have a bearing on the nature of income and entitlement to exemption under section 80P of the Act, the Hon’ble Supreme Court had remitted the matter back to the Income Tax Appellate Tribunal to decide the 8

ITA No.217/LKW/2026 A.Y. 2022-23 Cooperative Cane Development Union Ltd. appeals afresh, without being bound or influenced by the earlier orders passed by them or by the Hon’ble High Court. In view of such orders of the Hon’ble Supreme Court, the case laws of the jurisdictional Hon’ble Allahabad High Court cited by the ld. Sr. DR did not constitute a binding precedent for the ITAT, Lucknow Bench in the case of Cooperative Cane Development Council in ITA Nos. No.285/Lkw/2015, 474/Lkw/2015, 525/Lkw/2015, 536/Lkw/2015 and 540/Lkw/2015. The Hon’ble ITAT, Lucknow Bench after considering the byelaws and the statutory rules, the decisions of Hon’ble Allahabad High Court in CIT vs. Krishak Sahkari Ganna Samiti Limited 258 ITR 594 (Alld) and CIT vs. Cooperative Cane Development Union Limited 118 ITR 770 (Alld) and the decisions of the Tribunal in Income Tax Officer vs. Sahkari Ganna Vikas Samiti, Rupapur Chouraha (Munder), Hardoi in ITA No. 467/Lkw/2013 held as under:- “7.1 Now the parties are again before us. We find that assessees had earned interest from fixed deposits from bank and co-operative society. Hon'ble Supreme Court, after acceptance of additional documents had set aside the issue before this Tribunal for readjudication. We find that the arguments of the assessees are that the assessees had placed the funds in the form of fixed deposits with nationalized banks and Co- operative banks in view of the specific requirements of U.P. Co- operative Societies Act. We find that section 58 of the U.P. Co- operative Societies Act requires the net profit to be distributed as under: "(a) An amount not less than twenty five percent shall be transferred to a fund called the reserved fund: (b) Not less than such amount as may be prescribed, shall be credited to a Co-operative Education fund to be established in the manner prescribed, and this shall be applicable to such cooperative society also which incur loss in the year, [Provided that the provisions of this clause shall not apply to a Primary Agriculture Credit Co-operative Society, a Central Cooperative Bank or the Apex Bank.',] (c) An amount that may be prescribed shall be credited to the research and development fund created in the Apex Societies of the concerned class of Co- operative society and which shall be maintained for the purpose of Research and development in the prescribed manner. (d) an amount not exceeding twenty percent as may be prescribed shall be transferred to a fund called the Equity Redemption Fund to be established and utilized in the manner prescribed by such co- operative Society which has the subscription of the State Government in its share capitals." 7.2 Hon'ble Allahabad High Court in the case of CIT vs. Krishak Sahkari Ganna Samiti Ltd. [2002] 258 ITR 594 (Alld) has held that the investment by 9

ITA No.217/LKW/2026 A.Y. 2022-23 Cooperative Cane Development Union Ltd. co-operative Society in the form of Government securities, equivalent to 25% of its profit, was the requirement of keeping the same as statutory reserve therefore, has held that such earning of interest was attributable to the activity carried on by the assessee. The relevant findings of Hon'ble Allahabad High Court are reproduced below: "Clause (c) of Section 80-P(2) exempts income of cooperative society to the extent mentioned in that section if the profits or gains are 'attributable' to the activity in which the Cooperative Society is engaged. The findings are that under statutory provisions the Cooperative Society is bound to invest 25% of its profits in Government securities. The assessee complied with this provision. In the process, it earned interest on these investments. The question is whether such profits or gains are attributable to the activity of supplying sugarcane carried on by the assessee. In Cambay Electric Supply Industrial Co. Ltd. v. CIT [1978] 113 1TR 84 the Supreme Court held that the expression 'attributable to suggests that the Legislature intended to cover receipts from sources other than the actual conduct of the business of the assessee. The investment of the statutory percentage of its profits in Government securities was a condition of the carrying on the business. The profits or gains from such investments were connected with or incidental to the carrying on of the actual business. They were, in our opinion, rightly held by the Tribunal to be attributable to the activity carried on by the assessee within the "meaning of clause (c) aforesaid. We therefore, answer the question referred to us in the affirmative in favour of the assessee and against the Department. 8. Following the aforementioned ratio laid down by the Division Bench which we consider binding on us, we too answer the question referred to us in the affirmative in favour of the assessee cooperative Society and against the Revenue." 7.3 Further we find that the assessee has relied on a judgment of Raipur Tribunal in the case of Gramin Sewa Sahakari Samiti Maryadit vs. Income Tax Officer [2022] 138 taxmann.com 476 (Raipur-Trib.) wherein the Tribunal has held that the interest earned by the assessee from deposit with co-operative bank and nationalized bank was eligible for deduction u/s 80P(2)(a) of the Act. 7.4 The above two judgments respectively by Hon'ble High Court and Tribunal hold that the interest earned by a Co-operative Society on deposits, which are statutorily required to be kept in the form of bank deposits or Government securities, are attributable to the business of an assessee. 7.4 Here in the present cases, we do not find the figures regarding the interest which the assessees may have earned on fixed deposits attributable to the making of statutory reserves. We further find that bye laws of the assessee has to be gone through which, though are available in the paper book, but require examination by the Assessing Officer as these were filed before 10

ITA No.217/LKW/2026 A.Y. 2022-23 Cooperative Cane Development Union Ltd. Hon'ble Supreme Court as additional evidences. Therefore, we deem it appropriate to remit the issue of deduction u/s 80P for readjudication by the Assessing Officer, who, in the light of judgment of Hon'ble Supreme Court and keeping in view the judgments relied on by the assessee and keeping in view the additional documents, as filed before Hon'ble Supreme Court, will adjudicate the issue afresh. Needless to say that the assessees will be provided sufficient opportunity of being heard.” 14. Subsequent on the said remand, the matter was examined by the Revenue and after consideration of the decision of the Hon’ble Supreme Court and the other judgments relied upon by the Hon’ble ITAT while remanding the matter back to him, the ld. Assessing Officer held as under:- "3.3 Reason for inference drawn that no variation is required on this issue: The submissions made by the Assessee have been examined thoroughly particularly the bylaws of the Assessee Society and the U. P. Co- operative Societies Act. On going through the by-laws of the Assessee Society, it has been noticed that its Part 14 i.e. "Disposal of Net Profit and Societies" Assets and funds and appropriation thereof deals with the appropriation of Net Profits and Funds of the Assessee Society. Further, it has also been noticed that the aforementioned Part-14 of the bylaws of the Societies are in accordance with section 58 and 59 of the U. P. Co-operative Societies Act. Further, it has also been noticed that the secured reserve as well as other reserves are created in Annual General Meeting of the Society as per its bylaws and get accumulated over the year. These reserves are kept in co-operative and nationalized banks from where the Assessee earns the interest income under question. In view of the aforementioned facts, it is inferred that the reserve funds kept by the Assessee with Co-operative and nationalized banks are as per the by-laws of the Society and accordingly interest income arising from these funds can be held to be attributable to its main activities and therefore, the assessee is eligible for deduction in respect of this interest income under section 80P(2)(a) of the Act as per the case laws referred to and relied upon by the Hon'ble L.T.A.T. i.e. Judgments of Hon'ble Allahabad High Court in the case of CIT Vs. Krishak Sahkari Ganna Samiti Limited [2002] 258ITR594 (Allahabad) and ITAT, Raipur in the case of Gramin Sewa Sahakari Samiti Maryadit Vs. Income Tax Officer 92022), 138 Taxmann.com 476 (Raipur Tribunal).”

ITA No.217/LKW/2026 A.Y. 2022-23 Cooperative Cane Development Union Ltd. investment made by it as per sections 58 and 59 of the U.P. Cooperative Societies Act r.w.r.173 of the U.P. State Cooperative Rules, is attributable to the activity in which the assessee is engaged and therefore, is eligible to be deducted under section 80P(2)(a) of the Act. 16. We have further observed that the Hon’ble Madras High Court in the case of K. 2058, Saravanampatti Primary Agricultural Co-Operative Credit Societies Ltd. v. Income Tax Officer 426 ITR 251 (Mad), after considering that the Societies was required to maintain a statutory reserve of 25% under the Tamilnadu Cooperative Societies Act held that the same could not be regarded as the surplus funds of the Society as decided in M/s Totgars Cooperative Sale Society Limited (supra) and therefore, it set aside the assessment of the ld. Assessing Officer in the light of the decision of the Hon’ble Supreme Court in CIT vs. Nawanshahar Central Cooperative Bank Ltd. 289 ITR 6 (SC) ‘.Therefore, in view of the arguments made by the learned Authorized Representative, that the investment in fixed deposits and other securities or on account of the provisions of sections 58 and 59 of the U.P. Cooperative Societies Act, 1965 and section 173 of the U.P. Cooperative Societies Rules, 1968, it is quite clear that since it has been held that interest on such investment is attributable to the main activity of the assessee cooperative society, the interest earned from such investments ought not to be regarded as a surplus within the meaning of Totgar’s Case, but an interest attributable to the main activity of the assessee cooperative and therefore, deductible under section 80P. The assessee has submitted copies of its byelaws and the detailed breakup of investments and interest arising on the same. However, we observe that the ld. Assessing Officer has not examined the breakup of such investments and the interest earned on the same, with reference to the byelaws or sections 58 and 59 of the U.P. Cooperative Societies Act, 1965 and 173 of the U.P. Cooperative Societies Rules, 1968 as he was of the view that no such interest was deductible in view of the decision of Hon’ble Supreme Court in the case of Totgars (supra). Now that the position with regard to such investments has been clarified by the Hon’ble ITAT in the case of Cooperative Cane Development Council, Lakhimpur and accepted by the Revenue in the consequent assessment, we deem it appropriate to restore the matter in all three cases back to the file of the ld. Assessing Officer for the limited purpose of re-computing the admissible deduction under section 80P with reference to the interest earned on investments made in accordance with sections 58 and 59 of the U.P. Cooperative Societies Act, 1965 and 173 of the U.P. Cooperative Societies Rules, 1968 . Ground numbers 1 to 5 are accordingly allowed. With regard to Ground no 6 on the issue of adding back the interest on PF balance of the seasonal employees of the society, we observe that the same cannot be considered to be the investments of the society and accordingly the interest accruing on the said amount cannot be said to be income of the society. Therefore, any adding back of such interest income to the income of the society is not maintainable and accordingly, additions made on this account in A.Ys. 2017-18 and 2020-21 are deleted.”

ITA No.217/LKW/2026 A.Y. 2022-23 Cooperative Cane Development Union Ltd. 7. In view of the fact that the issue is entirely covered by our orders in the aforesaid case, following our said orders, we deem it appropriate to restore the matter back to the file of the AO for the limited purpose of recomputing the admissible deduction under section 80P with reference to the interest earned on investments made in accordance with sections 58 and 59 of the U.P. Cooperative Societies Act, 1965 and 173 of the U.P. Cooperative Societies Rules, 1968. Furthermore, the Assessing Officer may also identify the interest on PF balance of seasonal employees of the society, which are not the investments of the society and on which the interest earned cannot be said to be the income of the society. Accordingly, no disallowance in respect of interest so earned can be made in the accounts of the assessee if the assessee is not showing the same as its income in its profit and loss account. The assessee is directed to produce the necessary information before the ld. AO to enable him to compute the deduction. Accordingly, Ground Nos. 1 to 5 of the appeal are held to be allowed for statistical purposes, while Ground Nos. 6, 7, and 8 are held to be infructuous and dismissed as such. 8. In the result, the appeal of the assessee is held to be partly allowed. Order pronounced on 31.07.2026 in the open Court. Sd/- Sd/- [SUDHANSHU SRIVASTAVA] [NIKHIL CHOUDHARY] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 31/07/2026 Sh Copy forwarded to: 1. Appellant – 2. Respondent – 3. CIT DR , ITAT, 4. CIT, 5. The CIT(A) By order Sr. P.S. 13