| The Tax Publishers2019 TaxPub(DT) 7500 (Jp-Trib) INCOME TAX ACT, 1961
Section 263 Section 80P(2)(d)
By virtue of provisions of section 80P(4), claim of deduction under section 80P(2)(d) could not be denied to assessee society as deposits had been placed by assessee co-operative society with Ajmer Central Co-operative Bank Ltd. which was registered as a co-operative society and retained the same character, even though it was carrying on the banking business. In view of this, even though AO had not examined the matter relating to deduction so claimed by assessee, order passed by AO wherein he had allowed the deduction under section 80P(2)(d) on interest on FDRs placed with Ajmer Central Co-operative Bank Ltd. could not be held as erroneous and prejudicial.
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Revision under section 263 - Erroneous and prejudicial order - No examination by AO as regards allowability of deduction under section 80P(2)(d) as regards interest income on investments held by assessee society with Co-operative Bank -
Assessee, co-operative society claimed deduction under section 80P(2)(d) as regards interest income received on investment with Ajmer Central Co-operative Bank Ltd and same stood allowed by AO. CIT took the view that as Ajmer Central Co-operative Bank Ltd. was doing banking business, therefore, no deduction could be allowed to assessee in view of section 80P(4) and since issue regarding claim for deduction under section 80P had not been examined by AO, therefore, order passed by AO was erroneous and prejudicial to the interest of revenue.Held: Though Co-operative bank pursuant to the insertion of sub-section (4) of section 80P would no more be entitled for claim of deduction under section 80P, however, as a co-operative bank continues to be a co-operative society registered under Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in enforce in any State for the registration of co-operative societies, and therefore, interest income derived by a co-operative society from its investments held with a co-operative bank, would be entitled for claim of deduction under section 80P(2)(d). Accordingly, by virtue of provisions of section 80P(4) claim of deduction under section 80P(2)(d) could not be denied to the assessee society as the deposits had been placed by assessee co-operative society with Ajmer Central Co-operative Bank Ltd. which was registered as a co-operative society and retained the same character even though it was carrying on banking business. In view of this, even though AO had not examined the matter relating to deduction so claimed by the assessee, the order passed by AO wherein he had allowed the deduction under section 80P(2)(d) on interest on FDRs placed with Ajmer Central Co-operative Bank Ltd. could not be held as erroneous and prejudicial.
Relied:Kaliandas Udyog Bhavan Premises Co-op Society Ltd. v. ITO-21(2)(1), Mumbai (2018) 94 Taxmann.com 15 (Mum) : 2018 TaxPub(DT) 3128 (Mum-Trib).
REFERRED :
FAVOUR : In assessee' favour.
A.Y. :
IN THE ITAT, JAIPUR BENCH
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