INCOME TAX OFFICER vs. SWA ASHOKRAO BANKAR NAGARI SAHAKARI PATSANSTHA MARYADIT, NASHIK

आदेश / ORDER PER R.S.SYAL, VP :

This appeal by the Revenue arises out of the order passed by the CIT(A)-1, Nashik on 04-11-2016 in relation to the assessment year 2013-14.

2 ITA No.155/PUN/2017 Swa Ashokrao Bankar Nagari Sahakari Patsanstha Maryadit

also called as ‘the Act’) on interest income of Rs.72,93,770/-

earned from banks other than cooperative banks.

cooperative society engaged in providing credit facilities to its

members. Return was filed declaring NIL income after availing

deduction u/s.80P. The AO observed that the assessee earned

interest income of Rs.72,93,770/- from banks, which, in his

opinion was not eligible for deduction u/s.80P. He, therefore,

made disallowance of interest income to this extent which view

came to be affirmed in the first appeal.

material on record. The only issue in this appeal is whether

interest income earned from FDRs with the nationalized banks is

eligible for deduction u/s 80P of the Act? The Pune Bench of the

Tribunal in the case of Shri Laxmi Narayan Nagari Sahakari Pat

Sanstha Maryadit Vs. ITO (ITA No.604/PN/2014) has allowed

deduction u/s 80P of the Act in similar circumstances vide its order

dated 19-08-2015. In that case, the Pune Bench discussed the

contrary views expressed by the Hon’ble Karnataka High Court in

Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO

3 ITA No.155/PUN/2017 Swa Ashokrao Bankar Nagari Sahakari Patsanstha Maryadit

(2015) 230 taxmann 309 (Kar.) allowing the deduction u/s. 80P on

interest income and the Hon’ble Delhi High Court in Mantola

Cooperative Thrift Credit Society Ltd. Vs. CIT (2014) 110 DTR 89

(Delhi) not allowing deduction u/s.80P on interest income earned

from banks under similar circumstances. Both the Hon’ble High

Courts have taken into consideration the ratio laid down in the case

of Totgar’s Cooperative Sale Society Ltd. 322 ITR 283 (SC).

There being no direct judgment from the Hon’ble jurisdictional

High Court on the point, the Tribunal in Shri Laxmi Narayan

Nagari Sahakari Pat Sanstha Maryadit (supra) preferred to go

with the view taken in favour of the assessee by the Hon’ble

Karnataka High Court in the case of Tumkur Merchants Souharda

Credit Cooperative Ltd. (supra). In the absence of there being no

change in the legal position prevailing on this issue after the

passing of the order by the Pune Bench of the Tribunal in Shri

Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit (supra)

and a host of other orders reiterating the similar view, respectfully

following the precedent, we approve the impugned order in

allowing deduction u/s.80P on the interest income.

4 ITA No.155/PUN/2017 Swa Ashokrao Bankar Nagari Sahakari Patsanstha Maryadit

Order pronounced in the Open Court on 23rd January, 2019.

Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; �दनांक Dated : 23rd January, 2019 सतीश आदेश क� क� क� �ितिलिप क� �ितिलिप �ितिलिप अ�ेिषत �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order is forwarded to: अ�ेिषत आदेश आदेश आदेश 1. अपीलाथ� / The Appellant; 2. ��यथ� / The Respondent; 3. The CIT(A)-1, Nashik 4. The Pr.CIT-1, Nashik िवभागीय �ितिनिध, आयकर अपीलीय 5. अिधकरण, पुणे “बी” / DR ‘B’, ITAT, Pune; 6. गाड� फाईल / Guard file. // True copy // आदेशानुसार आदेशानुसार/ BY ORDER, आदेशानुसार आदेशानुसार // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune

ITA No.155/PUN/2017 Swa Ashokrao Bankar Nagari Sahakari Patsanstha Maryadit

Date 1. Draft dictated on 22-01-2019 Sr.PS 2. Draft placed before author 22-01-2019 Sr.PS 3. Draft proposed & placed before the JM second member 4. Draft discussed/approved by Second JM Member. 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *