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| The Tax Publishers2020 TaxPub(DT) 3457 (Bang-Trib) INCOME TAX ACT, 1961
Section 80P
Where issue arose as regards allowability of deduction under section 80P(2)(d) on interest income earned on deposits with co-operative banks, matter was remanded back to AO following order of Tribunal in Jayangar Co-operative Society Ltd ., for fresh consideration as per directions contained in aforesaid order.
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Deduction under section 80P - Allowability - Interest earned on surplus fund by credit co-operative society -
Assessee was a credit cooperative society carrying on business of providing credit facilities to its members. Issue arose for consideration as to whether interest earned by assessee on surplus funds available with it, was eligible for deduction under section 80P(2)(a)(i) or 80P(2)(d). Held: Tribunal in case of Jayangar Co-operative Society Ltd ., restored issue to AO for fresh consideration. It was further noted that High Court of Karnataka in case of Totgars Co-operative Sales Society , confirmed order of Tribunal allowing deduction under section 80P(2)(d) on interest received from investments made in co-operative bank. Said decision was not followed in a subsequent judgment in case of Totgars Co-operative Sales Society . In later judgment, it was held that interest income earned on deposits will be assessed under head 'Income from 'other sources' ' and therefore, entire deduction under section 80P(2)(a)(i) or 80P(2)(d) would not be available to the assessee. CIT(A) passed his order on assumption that in said judgment, it was held that deduction under section 80P(2)(d) is not available to interest income earned on deposits with co-operative banks. Conclusion of CIT(A) was not correct. Therefore, following decision of Jayangar Co-operative Society Ltd . (supra), question of allowing deduction under section 80P(2)(a)(i) as well as section 80P(2)(d), was remanded back to AO for fresh consideration as per directions contained in order of Tribunal in Jayangar Co-operative Society Ltd.
Followed:The Totgars´ Cooperative Sale Society Limited v. ITO (2010) 322 ITR 283 (SC) : 2010 TaxPub(DT) 1466 (SC) The Pr. CIT v. Totagars Co-operative Sale Society (2017) 395 ITR 611 (Karn) : 2017 TaxPub(DT) 1748 (Karn-HC) Tumkur Merchants Souharda Credit Cooperative Limited v. ITO (2017) 392 ITR 74 (Karn) : 2017 TaxPub(DT) 0677 (Karn-HC) M/s. The Jayanagar Co-operative Housing Society Ltd. v. The Jayanagar Co-operative Housing Society Ltd. [ITA Nos. 3389 and 3390/Bang/2019, dt. 7-2-2020]
REFERRED :
FAVOUR : Matter remanded
A.Y. : 2016-17
IN THE ITAT, BANGALORE BENCH
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