MOHOL NAGARI SAHAKARI PAT PURVATHA SANSTHA MARYADIT,SOLAPUR vs. INCOME-TAX OFFICER, WARD - 2, PANDHARPUR

आदेश / ORDER

PER R.S. SYAL, VP : This appeal by the assessee arises out of the order passed by the CIT(Appeals)-9, Pune on 12.02.2018 in relation to the assessment year 2014-15.

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granting of deduction u/s.80(P) of the Income Tax Act, 1961

(hereinafter referred to as ‘the Act’) in respect of interest income on

FDRs maintained with the Nationalized Banks.

operative Society engaged in providing credit facilities to its

members. During the course of assessment proceedings, the AO

observed that the assessee earned interest income of Rs.15,36,909/-

on FDRs placed with IDBI Bank and Axis Bank, on which deduction

was claimed u/s.80P of the Income-tax Act, 1961 (hereinafter also

called `the Act’). The AO negatived the assessee’s claim of deduction

on such interest income, which action came to be echoed in the first

appeal.

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 (2015) 230 taxmann 309 (Kar.) allowing the

deduction u/s. 80P on interest income and the Hon’ble Delhi High

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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 their being any

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, I overturn the impugned order in not allowing deduction

u/s.80P on the interest income and direct to grant deduction on

such interest income.

In the result, the appeal is allowed. 5.

Order pronounced on 13th day of December, 2018.

Sd/- R.S. SYAL उपा�य� /VICE-PRESIDENT

पुणे / Pune; �दनांक / Dated : 13th December, 2018. SB

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आदेश क� ��त�ल�प अ�े�षत / Copy of the Order forwarded to :

अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The CIT(Appeals)-9, Pune. 4. The Pr. CIT-6, Pune. 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “एक-सद�य” ब�च, पुणे / DR, ITAT, “SMC” Bench, Pune. गाड� फ़ाइल / Guard File. 6.

// True Copy // आदेशानुसार / BY ORDER,

�नजी स�चव / Private Secretary आयकर अपील�य अ�धकरण, पुणे / ITAT, Pune.

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Date 1 Draft dictated on 12.12.2018 Sr. PS/PS 2 Draft placed before author 12.12.2018 Sr. PS/PS 3 Draft proposed and placed JM/AM before the second Member 4 Draft discussed/approved AM/JM by second Member 5 Approved draft comes to Sr. the Sr. PS/PS PS/PS 6 Kept for pronouncement Sr. on PS/PS 7 Date of uploading of order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Head Clerk 10 Date on which file goes to the A.R 11 Date of dispatch of order

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