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Income Tax Appellate Tribunal, SURAT BENCH, SURAT
Before: SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM
O R D E R PER DR. A. L. SAINI, AM: Captioned two appeals filed by the assessee, pertaining to the Assessment Years (AYs) 2017-18 and 2018-19, are directed against the separate orders passed by the Learned Commissioner of Income Tax (Appeals), Surat [in short “the ld. CIT(A)”], which in turn arise out of separate assessment orders passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”).
At the outset, Ld. Counsel for the assessee submitted that issues raised by the assessee in both the appeals are common and identical. The issue involved in both the appeals are that Ld. CIT(A) denied the deduction under section 80P(2)(d) of Income Tax Act in respect of interest received from Co-operative banks. The Ld. Counsel submitted before the Bench two charts for and 439/SRT/2022 for A.Ys.2017-18 and 2018-19 respectively, which are reproduced below:
438 & 439/SRT/2022/AY.2017-18 & 2018-19 Sachin Udyog Nagar Sahkari Mandli Ltd. (a) For for AY.2017-18:
438 & 439/SRT/2022/AY.2017-18 & 2018-19 Sachin Udyog Nagar Sahkari Mandli Ltd.
Therefore, Ld. Counsel contended that for AY.2017-18 (in the assessee is eligible for deduction under section 80P(2)(d) of the Act at Rs.2,15,13,865/-, whereas for AY.2018-19 (in ITA No.439), the assessee is eligible for deduction under section 80P(2)(d) of the Act at Rs.2,50,50,799/-. The Ld. Counsel further submitted that the Co-operative banks are primarily Co- operative society and the issue raised by the assessee is squarely covered by the judgment of the Co-ordinate Bench in assessee’s own case in ITA No. 445/SRT/219, dated 06.10.2022. Therefore, Ld. Counsel contended that since the issue is squarely covered by the judgment of Co-ordinate Bench, in assessee’s own case in favour of the assessee, therefore present two appeals of the assessee are squarely covered by the order of the Tribunal in assessees’ own case, a copy of which was also placed before the Bench.
The Learned Departmental Representative (Ld. DR) for the Revenue relied on the orders of authorities below.
5. We see no reason to take any other view of the matter then the view so taken by the Division Bench of this Tribunal in assessee’s own case vide order dated 06.10.2022. In this order, the Tribunal has inter alia observed as follows: “4. Aggrieved by the order of Assessing Officer the assessee carried the matter in appeal before Ld. CIT(A) who has deleted the addition made by Assessing Officer observing as follows:- “… relied on the decision of Hon. High Court of Karnataka in the case of CIT vs. Totagars Co-Op Sale Society. However, the aforesaid decision is not applicable to the facts of the appellant’s case as the appellant-society has claimed deduction u/s 80P(2)(d) and not u/s 80P(2)(a) of the Act. Deduction u/s 80(P)(2)(a) is available only in respect of income which is assessable as business income and not as income from other sources. whereas in distinction to this, the provisions of Section 80(P)(2)(d) of the Act provides for deduction in respect of income of a co-op society by way of interest or dividend from its investments with other co-op society if such income is included in the gross total income of the such Co-op society. In other words, Section 80(P)(2)(d) allows the deduction of interest received by a cooperative society from any other cooperative society which may also be a cooperative bank without any further restriction, condition or limitation. This section doesn’t bar the deduction of interest received by cooperative society from a cooperative bank. The deduction was being allowed for several preceding assessment years in the case of the appellant society. The AR has referred to decisions of the 438 & 439/SRT/2022/AY.2017-18 & 2018-19 Sachin Udyog Nagar Sahkari Mandli Ltd. jurisdictional High Court and jurisdiction ITAT Benches wherein the issue of deduction of interest income from Dist. Co.Op. bank was held allowable u/s 80(P)(2)(d): (a) Guj. HC in SBI vs. CIT (2016) 72 Taxmann.com 64 (Guj. HC) (b) Guj. HC in CIT vs. Sabarkantha Dist. Co-op, Milk Producers Union Ltd in Tax Appeal no. 473 of 2014 (c) Guj. HC in the Surat Vankar Sahakar Sangh Ltd. TA No. 93-96 of 2008 dt 12.07.2016722 taxmann.com 169 (Guj.) (d) ITAT Ahmedabd in Sabarkantha Dist. Co-op. Milk Union 1905/Ahd/2016 dtd 06.06.2018 (e) ITAT Ahmedabad Peoples Co-op. Credit Society and others dtd 23.01.2018 (f) ITAT Surat Bardoli Vibhag Gram Vikas Co-op Credit Society Ltd ITA2582/Ahd/2014/SRT dtd 28.06.2018 & ITANo.2166/Ahd/2014/SRT dtd 18.04.2017 (g) ITAT Surat Dist. Co-op Milk Producers Union Ltd ITA No.1498/Ahd/2012/SRT, ITA 1706 & 1211/Ahd/2015/SRT dtd 03.08.2018 (h) ITAT Ahmedabad The Commercial Co-operative Credit Society Ltd. ITA No.2227/Ahd/2017 dtd 13.07.2018 (i) ITAT Ahmedabad the Saroday Credit cum Consumer Co-op society Ltd ITA No.1875/Ahd/2015 dt.11.07.2018 (j) ITAT Ahmedabad The Uttar Gujarat Uma Co-op Credit Society Ltd ITA No.1670 & 1671/Ahd/2018 dtd 28.02.2019. In all these cases, it was held that interest income earned by assessee co- Operative Bank is eligible for deduction u/s 80P(2)(d). The Hon Guj. High Court in Sl. No.(c) above has held that “assessee co-op. society was eligible for deduction u/s 80P(2)(d) in respect of gross interest received from Surat Dist. Co-Op. Bank without adjusting interest paid to the said bank.” The AR referred to the various legal decisions on the matter including the decision of the CIT(A)-4, Surat in the case of Shree Kumkotar Dudh Utpadak Sahakari Mandli Limtied vide order no. CIT(A), Surat- 4/10180/2018-19 dtd. 14.05.2019 wherein Shree Kumkotar Dudh Utpadak Sahakari Mandli had earned interest from Surat District Co-op bank and had claimed deduction u/s 80P(2)(d). However, the AO had disallowed the deduction u/s 80P(2)(d) by relying on the case of CIT vs. Totagars Co-op Sale Society. Thereafter the CIT(A) in its order relied on the judgements of the jurisdictional High Court and ITAT benches wherein it was held that interest income earned by assessee co-op credit society from Dist. Co-operative bank is eligible for deduction u/s 80P(2)(d).The AR also referred to the decision of the jurisdictional ITAT, Surat in the case of Bardoli Vibhag Gram Vikas Co-Op. Credit Society Ltd ITA 2166/Ahd/2014, ITA No.2582/Ahd/2014/2014/SRT & ITANo.2617/Ahd/2016 dated 18.04.2017, 28.06.2018 and 18.12.2018 wherein it was held that interest received by Co-Operative Society from 438 & 439/SRT/2022/AY.2017-18 & 2018-19 Sachin Udyog Nagar Sahkari Mandli Ltd. the Surat District Co-Operative bank is eligible for deduction u/s 80(P)(2)(d) of the Act. Considering the facts of the case and binding legal decisions of jurisdictional ITAT as well as Hon'ble Gujarat High Court, the interest income of Rs.1,57,50,379/- is held to be eligible for deduction u/s 80P(2)(d) as this interest amount was received from District Co- operative Bank. The AO is hereby directed to allow the same. This ground is allowed in the favour of the appellant.”
Aggrieved by the order of Ld. CIT(A) the Revenue is in appeal before us.
6. Learned DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity.
7. On the other hand, Ld. Counsel for the assessee defended the order passed by the Ld. CIT(A).
We have heard both the parties and perused the materials available on record. We note that issue under consideration is squarely covered by the judgment of Hon'ble jurisdictional High Court of Gujarat in the case of Surat Vankar Sahakari Sangh Ltd. Vs. ACIT (supra) as relied on by ld CIT(A), wherein it was held that assessee-co-operative society was eligible for deduction under section 80P(2)(d) of the Act, in respect of gross interest received from co- operative bank. Hence, we note that assessee is a co-operative society and therefore is entitled to claim deduction in respect of interest received from another co-operative bank under section 80(P)(2)(d) of the Act. Therefore, respectfully following the binding precedent of Hon'ble jurisdictional High Court of Gujarat (supra), we confirm the order passed by the ld CIT(A) and dismiss the appeal of Revenue. In the result, the appeal of the Revenue is dismissed. 9.
As the issue is squarely covered in favour of the assessee by the decision of Co-ordinate Bench in assessee’s own case and there is no change in facts and law and the Revenue is unable to produce any material to controvert the above said findings of the Co-ordinate Bench (supra). We find no reason to interfere in the said order of Tribunal, therefore respectfully following the binding judgment of Co-ordinate Bench in assessee’s own case, we delete the addition made by the Assessing Officer for AY.2017-18 (in at Rs.2,15,13,865/- and for AY.2018-19 (in ITA No.439) at Rs.2,50,50,799/-.
In the result, both appeals filed by the assessee are allowed to the extent indicated above.
438 & 439/SRT/2022/AY.2017-18 & 2018-19 Sachin Udyog Nagar Sahkari Mandli Ltd. Registry is directed to place one copy of this order in all appeals folder / case file(s).
Order is pronounced on 07/02/2023 by placing the result on the Notice Board.