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Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE – VIRTUAL COURT
Before: SHRI R.S. SYAL
आदेश / ORDER PER R.S.SYAL, VP : This appeal by the assessee is directed against the order passed by the CIT(A) on 20-08-2020 in relation to the assessment year 2017-18. 2. Tersely, the facts of the case are that the assessee is a Co- operative Society and filed its return declaring net profit of Rs.11,50,144/- which was claimed as deduction u/s.80P(2)(a) of the Income-tax Act, 1961 (hereinafter also called ‘the Act’). The AO denied the benefit of deduction u/s.80P on the ground that the amount of interest income did not qualify, which view
Sangli Zilla Dekharekh Sahakari Society Ltd., came to be countenanced partly in the first appeal by the ld. CIT(A) allowing proportionate deduction.
I have heard the rival submissions in Virtual Court and gone through the relevant material on record. The Pune Benches of the Tribunal in Sureshdada Jain Nagari Sahakari Patsanstha Maryadit Vs. The Pr.CIT (ITA No.713/PUN/2016) has decided the question of availability of deduction u/s 80P on interest income by noticing that the Pune ITAT in an earlier case of Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit Vs. ITO (ITA No.604/PN/2014) had allowed the deduction in similar circumstances. In the said case, the Tribunal discussed the contrary views expressed by the Hon’ble Karnataka High Court in Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO (2015) 230 Taxman 309 (Kar.) allowing deduction u/s. 80P on interest income and that of 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. Both the Hon’ble High Courts took into consideration the ratio laid down in the case of Totgar’s Cooperative Sale Society Ltd. (supra). No direct judgment from the Hon’ble
Sangli Zilla Dekharekh Sahakari Society Ltd., jurisdictional High Court on the point having been pointed out, the Tribunal in Shri Laxmi Narayan Nagari Sahakari Pat Sanstha Maryadit (supra) preferred to go with the view in favour of the assessee by the Hon’ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. (supra). The position continues to remain the same before this Bench also.
It can be seen from the impugned order that the ld. CIT(A) has accepted the assessee’s contention, in principle, about the eligibility of deduction u/s.80P(2) of the Act on interest income. He, however, restricted the benefit proportionately by considering the total receipts of the assessee vis-à-vis the amount of interest income. Once the ld. CIT(A) accepted the contention of the assessee for deduction u/s.80P(2), it was to be allowed in respect of the entire interest income. As against the interest income of Rs.1.04 crore, the assessee’s amount of deduction u/s 80P stood only at Rs.11,04,044. I, therefore set-aside the impugned order and direct to grant the benefit of deduction u/s.80P(2)(a) on the full amount claimed by the assessee.
Sangli Zilla Dekharekh Sahakari Society Ltd.,
In the result, the appeal is allowed. Order pronounced in the Open Court on 01st February, 2022.
(R.S.SYAL) उपा�य�/ VICE PRESIDENT पुणे Pune; �दनांक Dated : 01st February, 2022 Satish
आदेश क� ��त�ल�प अ�े�षत / Copy of the Order is forwarded to :