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| The Tax Publishers2021 TaxPub(DT) 2225 (Sur-Trib) INCOME TAX ACT, 1961
Section 263 Section 80P
For the purpose of section 80P(2)(d), a Co-operative Bank should be considered a Co-operative Society and interest earned by Co-operative Society from Co-operative Bank would necessarily be deductible under section 80P(1) on gross basis without adjusting interest paid to said bank. Accordingly, assessment order wherein AO allowed deduction so claimed by assessee-society could not be termed as erroneous and prejudicial to the interests of Revenue.
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Revision under section 263 - Erroneous and prejudicial order - Pr. CIT questioned allowance of claim of deduction under section 80P(2)(d) as regards interest income earned on deposit held with the co-operative bank -
Pr. CIT treated order passed by AO as erroneous and prejudicial to the interest of revenue on the ground of AO having allowed deduction under section 80P(2)(d) as regards interest income earned on deposit held with the co-operative bank.Held: For the purpose of section 80P(2)(d) a Co-operative Bank should be considered a Co-operative Society and interest earned by Co-operative Society from Co-operative Bank would necessarily be deductible under section 80P(1) on gross basis without adjusting interest paid to said bank. Accordingly, assessment order wherein AO allowed deduction so claimed by assessee-society could not be termed as erroneous and prejudicial to the interests of Revenue.
Relied:Pr. CIT v. Totagars Co-operative Sales Society (2017) 78 Taxman.com 169 (Kan-HC) : 2017 TaxPub(DT) 677 (Karn-HC), Surat Vankar Sahakari Sangh Ltd., v. Asstt. CIT (2016) 72 Taxmann.com 169 (Guj-HC) : 2016 TaxPub(DT) 3733 (Guj-HC) and Surendarnagar District Co-operative Milk Producer Union Ltd. v. Dy. CIT (2019) 111 taxmann.com 69 (Rjk-Trib).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
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