INCOME TAX ACT, 1961

Section 80P(2)(a)(i)

Deduction under section 80P - Co-operative society - Interest earned on deposit with other co-operative banks -

Revenue in the instant appeal challenged the order of CIT(A) holding that assessee- society was entitled to deduction under section 80P(2)(d) of the Income Tax Act, 1961. Revenue alleged that assessee-society was mainly involved in extending credit facilities to its members which was in the nature of a bank transaction, treated on par with the new clause introduced in the definition of income in section 2(24)(viia) and came under the purview of section 80P(4) with effect from 01-04-2007. Held: The issue was restored back to AO for a fresh decision after examining the facts in the light of judgment of the Apex Court rendered in the case of The Totgars Co-operative Sale Society Ltd. v. ITO (2010) 322 ITR 283 (SC) and case of Tumukur Merchants Souharda Co-operative Ltd. v. ITO 2015 TaxPub(DT) 2857 (Karn-HC) The examination of claim for deduction in respect of interest income received on deposits from other Co-operative Societies and with co-operative banks was to be made only under section 80P(2)(a)(i). In so far as deduction under section 80P(2)(d) was concerned, the same was not allowable in view of the decision Totgars Cooperative Sale Society Ltd. (2017).

Followed:M/s. The Totgars Cooperative Sale Society Limited v. ITO. Karnataka (2010) 322 ITR 283 (SC) : 2010 TaxPub(DT) 1466 (SC) The Pr. CIT, Income Tax Officer v. The Totagars Co-operative Sale Society (2017) 395 ITR 611 (Karn-HC) : 2017 TaxPub(DT) 1748 (Karn-HC) The Pr. CIT, v. The Totagars Co-operative Sale Society, (2017) 392 ITR 74 (Karn-HC) : 2017 TaxPub(DT) 677 (Karn-HC) Tumkur Merchants Souharda Credit Cooperative Limited v. ITO, Ward-1, TUMKUR in (I.T.A. No. 307 of 2014, dt. 28-10-2014) : 2015 TaxPub(DT) 2857 (Karn-HC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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