THE INCOME TAX OFFICER WARD-6(3)(2), BANGALORE vs. M/S MINISTRY OF COMMUNICATION EMPLOYEE CO-OPERATIVE HOUSING SOCIETY , BANGALORE

Date of Hearing : 02-12-2020 Date of Pronouncement : 11-12-2020 ORDER PER BEENA PILLAI, JUDICIAL MEMBER Present appeal has been filed by revenue against order dated 06/07/2018 passed by Ld. CIT (A)-11, Bangalore for assessment year 2007-08 on following grounds of appeal: “1.The order of the CIT (Appeals) is opposed to law and the facts and circumstances of the case. 2.On the facts and circumstances of the case, whether the Ld CIT(A) is justified in holding that the assessee is eligible to claim deduction u/s 80P (2)(d) of the Act wherein the assessee is not in the business of banking or not providing credit facilities to its members?

3. On the facts and circumstances of the case, whether the Ld CIT(A) is justified in holding that the assessee is eligible to claim deduction u/s 80P of the Act wherein the assessee has derived interest income from the investment in different co-operative banks and not from cooperative societies? 4. For these and such other grounds that may be urged at the time of hearing, it is humbly prayed that the order of the CIT(A), in so far as it relates to the above grounds may be reversed and that of the Assessing Officer be restored. 5. The appellant craves leave to add, to alter, to amend or delete any of the grounds that may be urged at the time of hearing of the appeal.” Brief facts of the case are as under: 2. Assessee is a co-operative society and filed its return of income on 31/03/2008 declaring gross total income of Rs.2,36,22,915/-. The total income of rupees in ‘nil’ was declared after claiming deduction under section 80 P of the Act. 3. Ld.AO disallowed Rs.2,52,46,536/- being interest earned from other cooperative societies.Ld.AO disallowed the claim u/s.80 P(2) (a)(i) of the Act, as against the claim of assessee u/s.80P(2)(d) of the Act.

4. Aggrieved by order of Ld.AO, assessee preferred appeal before Ld.CIT(A). 5. Ld.CIT(A) held as under: “On going through the appellants claim, the Ld.AO has erred and allowed the deduction claimed by the appellant saying that the appellant is not eligible to claim deduction u/s.80P(2)(a)(i) when the appellant has claimed deduction u/s.80P(2)(d). Also, the Ld.AO has quoted case of Totgars' Co-operative Sale Society Ltd. v. ITO where the claim is u/s 8OP(2)(a)(i) does not hold good for the present case as the appellant has claimed deduction u/s.80P(2)(d). On considering the submissions made by the AR of the appellant that the deduction has been claimed u/s.80P(2)(d) which in my view is eligible.”