M/s. Sindhurg Zilla Rajya Sarkari Karmachari Sahakari Pat Sanstha Maryadit, Sindhudurg V. Income-tax Officer,

ITA 1677/PUN/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1709 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 05-09-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL CHAWARE
• Section: 143(3)

Judgement Text

- IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC , PUNE , BEFORE MS. SUSHMA CHOWLA, JM . / ITA NO. 1 677 /PN/201 4 / ASSESSM ENT YEAR : 20 11 - 12 M/S. SINDHUDURG ZILLA RAJYA SARKARI KARMACHARI SAHAKARI PAT SANSTHA MARYADIT, 811, SULOCHANA NAGAR, OROS, DIST. SINDHUDURG 416812 . / APPELLANT PAN: A A FFS4128N VS. THE INCOME TAX OFFICER, WARD 2 ( 4 ), KUDAL . / RESPONDENT / APPELLANT BY : SHRI NIKHIL PATHAK / RESPONDENT BY : SHRI ANIL CHAWARE . / ITA NO. 1567 /PN/201 4 / ASSESSMENT YEAR : 20 11 - 12 M/S. SINDHUDURG DISTRICT PRIMARY TE ACHERS CO - OPERATIVE CREDIT SOCIETY LTD., SANKALPA SIDHHI, AT & POST: OROS, TAL: KUDAL, DIST. SINDHUDURG 416812 . / APPELLANT PAN: AAATS7592R VS. THE INCOME TAX OFFICER, WARD 2(4), KUDAL . / RESPONDENT / APPELLANT BY : SHRI V.G. GINDE / RESPONDENT BY : SHRI ANIL CHAWARE / DATE OF HEARING : 15 . 0 6 .201 6 / DATE OF PRONOUNCEMENT: 17 . 0 6 .201 6 ITA NO. 1 677 /PN/20 1 4 ITA NO.1567/PN/2014 2 / ORDER PER SUSHMA CHOWLA, J M : BOTH THE APP EAL S FILED BY THE DIFFERENT ASSESSEE S ARE AGAINST SEPARATE ORDER S OF CIT (A) , KOLHAPUR , DATED 09 . 0 6 .20 1 4 AND 24.06.2014 RELATING TO ASSESSMENT YEAR 20 11 - 12 AGAINST RESPECTIVE ORDER S PASSED UNDER SECTION 143(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT ) . 2 . BOTH THE APPEALS RELATING TO DIFFERENT ASSESSEES ON SIMILAR ISSUE WERE HEARD AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. HOWEVER, REFERENCE IS BEING MADE TO THE FACTS IN ITA NO.1677/PN/2014 TO ADJUDICATE THE IS SUE. 3. THE ASSESSEE IN ITA NO.1677/PN/2014 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1] THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISALLOWANCE OF DEDUCTION U / S 80P IN RESPECT OF THE INTEREST INCOME OF RS.24,60,355/ - AND DIVIDEND INCOME OF RS.3,75,00 3/ - RECEIVED BY THE ASSESSEE CO - OPERATIVE SOCIETY ON INVESTMENTS MADE IN BANK ACCOUNT AND SHARES OF SINDHUDURG CENTRAL CO - OPERATIVE BANK. 2] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE ASSESSEE WAS NOT ELIGIBLE TO CLAIM THE DEDUCTION U / S 80P(2)(A)(IA) / 80P(2)(D) IN RESPECT OF THE INCOME EARNED BY WAY OF INTEREST ON BANK ACCOUNT AND DIVIDEND INCOME ON INVESTMENTS MADE IN SINDHUDURG CENTRAL CO - OPERATIVE BANK. 3] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE ASSESSEE WAS A CREDIT CO - OPERATIVE SOCIETY E NGAGED IN THE BUSINESS OF PROVIDING CREDIT FACILITY TO ITS MEMBERS AND HENCE, THE INVESTMENTS MADE IN BANK ACCOUNT AND SHARES OF SINDHUDURG CENTRAL CO - OPERATIVE BANK LTD. WERE MADE IN THE COURSE OF THE ASSESSEE'S BUSINESS AND THUS, THERE WAS NO REASON TO D ENY THE DEDUCTION U / S 80P(2)(A)(I) IN RESPECT OF THE INCOME DERIVED FROM THE ABOVE INVESTMENTS. 4] WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE ASSESSEE SUBMITS THAT SINDHUDURG CENTRAL CO - OP. BANK LTD. WAS REGISTERED UNDER THE MAHARASHTRA CO - OP. SOCIETIE S ACT, 1960 AND HENCE, THE ASSESSEE WAS ELIGIBLE TO CLAIM THE DEDUCTION U / S 80P(2)(D) IN RESPECT OF THE INCOME DERIVED BY WAY OF INTEREST AND DIVIDEND ON INVESTMENTS MADE IN THE SAID CO - OP. SOCIETY. 5] WITHOUT PREJUDICE TO THE ABOVE GROUNDS, ASSUMING WITH OUT ADMITTING THAT THE ASSESSEE IS NOT ELIGIBLE TO CLAIM THE DEDUCTION U/S 80P(2)(A)(I) ITA NO. 1 677 /PN/20 1 4 ITA NO.1567/PN/2014 3 OR SECTION 80P(2)(D), THE ASSESSEE SUBMITS THAT THE DISALLOWANCE MAY BE RESTRICTED TO THE NET INCOME EARNED AFTER DEDUCTING PROPORTIONATE EXPENSES INCURRED IN RESPECT O F THE ABOVE INCOME AND THE SAID DISALLOWANCE MAY NOT BE MADE IN RESPECT OF THE GROSS INCOME EARNED BY THE ASSESSEE. 4. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO THE CLAIM OF DEDUCTION UNDER SECTION 80P OF THE ACT IN RESPECT OF INTEREST INC OME OF RS.24,60,355/ - AND DIVIDEND INCOME OF RS. 3,75,003/ - RECEIVED BY THE ASSESSEE ON INVESTMENT MADE IN BANK ACCOUNT AND SHARES OF SINDHUDURG CENTRAL CO - OPERATIVE BANK. THE ASSESSEE HAS CLAIMED THAT IT WAS ELIGIBLE TO CLAIM THE DEDUCTION UNDER SECTION 8 0P(2)(A)(I) / 80P(2)(D) OF THE ACT IN RESPECT OF INCOME EARNED BY WAY OF INTEREST ON BANK DEPOSITS AND DIVIDEND INCOME ON ITS INVESTMENTS. 5. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE RATIO LAID DOWN BY THE PUNE BENCH OF TRIBUNAL IN SINDHUDURG ZILLA MADHYAMIK ADHYAPAK BY THE PUNE BENCH OF TRIBUNAL IN SINDHUDURG ZILLA MADHYAMIK ADHYAPAK SAHAKARI PATPEDHI MARYADIT IN ITA NO.1825/PN/2013, RELATING TO ASSESSMENT YEAR 2010 - 11, ORDER DATED 24.09.2014 , WHEREIN THE SAID CREDIT CO - OPERATI VE SOCIETY HAD ALSO MADE THE INVESTMENT IN DEPOSITS AND SHARES OF SINDHUDURG CENTRAL CO - OPERATIVE BANK AND THE TRIBUNAL HELD THAT THE ASSESSEE WAS ELIGIBLE TO CLAIM THE DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT. THE TRIBUNAL ALSO HELD THAT SINDHUDURG C ENTRAL CO - OPERATIVE BANK WAS A CO - OPERATIVE SOCIETY AND AS SUCH ON ITS INVESTMENT, THE ASSESSEE WAS ENTITLED TO CLAIM THE DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT. FURTHER, RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY PUNE BENCH OF TRIBUNAL IN SINDHU DURG DISTRICT PRIMARY TEACHERS CO - OPERATIVE CREDIT SOCIETY LTD. VS. ITO IN ITA NO. 31/PN/2014 WITH CONSOLIDATED ORDER IN VEEJMANDALS WORKERS FEDERATION SAHAKARI PATSANSTHA MARYADIT VS. ITO AND SINDHU BANK STAFF CO - OPERATIVE CREDIT SOCIETY LTD. VS. ITO IN I TA NOS.29/PN/2014 AND 30/PN/2014 RESPECTIVELY, RELATING TO ASSESSMENT YEAR 2010 - 11, ORDER DATED 24.12.2014 . ITA NO. 1 677 /PN/20 1 4 ITA NO.1567/PN/2014 4 6. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE WAS A CO - OPERATIVE CREDIT SOCIETY REGISTERED UNDER THE MAHARASHTRA CO - OPERATIVE SOCIETIES ACT. T HE MAIN OBJECT OF THE ASSESSEE SOCIETY WAS TO PROVIDE CREDIT FACILITIES TO ITS MEMBERS AND INTEREST ON THE SAID LOAN ADVANCE D TO ITS MEMBERS OUT OF ITS WORKING / CIRCULATING CAPITAL. THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION HAD DECLARED INTEREST INCO ME AND DIVIDEND RECEIVED ON INVESTMENT MADE WITH SINDHUDURG CENTRAL CO - OPERATIVE BANK AND HAD CLAIMED DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT ON THE SAID INCOME. SINCE THE INVESTMENTS WERE MADE WITH CO - OPERATIVE BANK AND NOT WITH THE CO - OPERATIVE SOC IETY AS PROVIDED IN SECTION 80P(2)(D) OF THE ACT, THE ASSESSEE WAS SHOW CAUSED TO JUSTIFY ITS CLAIM. THE ASSESSING OFFICER DID NOT ACCEPT THE EXPLANATION OF ASSESSEE IN THIS REGARD AND REJECTED THE CLAIM OF ASSESSEE THAT CO - OPERATIVE BANKS WERE AKIN TO CO - OPERATIVE SOCIETIES, SINCE THE CO - OPERATIVE SOCIETIES WERE GOVERNED BY THE PROVISIONS OF MAHARASHTRA CO - OPERATIVE SOCIETIES ACT AND THE BANKS WERE GOVERNED BY THE PROVISIONS OF BANKING REGULATION ACT, 1949, IN ADDITION TO THE PROVISIONS OF MAHARASHTRA CO - OPERATIVE SOCIETIES ACT, 1960. FURTHER, AFTER INSERTION OF SECTION 80P(4) OF THE ACT BY THE FINANCE ACT, 2006 W.E.F. 01.04.2007, THE CO - OPERATIVE BANKS HAVE BEEN DEPRIVED OF BENEFITS OF SECTION 80P OF THE ACT, WHEREAS THE CO - OPERATIVE SOCIETIES WERE ENJOY ING THE BENEFITS OF SAID SECTION. THE ALTERNATE PLEA OF THE ASSESSEE THAT IT WAS ELIGIBLE FOR DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT WAS REJECTED BY THE ASSESSING OFFICER. 7 . THE CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER IN REJECTING THE CL AIM VIS - - VIS UNDER SECTION 80P(2)(A)(IA) OF THE ACT AND ALSO IN RESPECT OF CLAIM UNDER SECTION 80P(2)(D) OF THE ACT. 8. ON THE PERUSAL OF RECORD, IT IS CLEAR THAT T HE ISSUE ARISING IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE ISSUE RAISED BEFORE THE PUNE BENCH OF ITA NO. 1 677 /PN/20 1 4 ITA NO.1567/PN/2014 5 TRIBUNAL IN SINDHUDURG ZILLA MADHYAMIK ADHYAPAK SAHAKARI PATPEDHI MARYADIT (SUPRA). IN THE FACTS BEFORE THE TRIBUNAL (SUPRA), THE SOCIETY HAD EARNED INTEREST INCOME FROM ITS INVESTMENT WITH SINDHUDURG CENTRAL CO - OPERATIVE BANK AMOUNTING TO R S. 31,77,452/ - AND THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT. FURTHER, DIVIDEND INCOME WAS ALSO RECEIVED ON INVESTMENT MADE IN THE SHARES OF SINDHUDURG CENTRAL CO - OPERATIVE BANK WHICH WAS ALSO CLAIMED AS DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT. THE TRIBUNAL ACCEPTED THE PLEA OF ASSESSEE THAT SINDHUDURG CENTRAL CO - OPERATIVE BANK WAS A CO - OPERATIVE SOCIETY AND THEREFORE, THE DEPOSITS WITH IT ARE FULLY COVERED UNDER SECTION 80P(2)(D) OF THE ACT. THE TRIBUNAL IN TURN, RELIED O N THE RATIO LAID DOWN BY CO - ORDINATE BENCH OF TRIBUNAL IN ACIT VS. M/S. JANATA GRAHAK MADHYAVARTI SAHAKARI SANGH MARYADIT IN ITA NO.571/PN/2013, RELATING TO ASSESSMENT YEAR 2009 - 10, ORDER DATED 27.11.2013 . THE RELEVANT FINDINGS OF THE TRIBUNAL ARE AS UNDE R: - 7. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. THE IST DI SPUTE IN THE GROUNDS OF APPEAL IS REGARDING THE ALLOWABILITY OF DEDUCTION U/S.80P(2)(D) IN RESPECT OF INTEREST INCOME OF RS.31,77,452/ - AND DIVIDEND INCOME OF RS.5,41,667/ - RECEIVED BY THE ASSESSEE COOPERATIVE SOCIETY ON INVESTMENT MADE IN DEPOSITS/SAVINGS ACCOUNTS AND SHARES OF SINDHUDURG CENTRAL COOPERATIVE BANK. ACCORDING TO THE ASSESSING OFFICER THE DEDUCTION IS ALLOWABLE U/S.80P(2)(D) IN CASE OF A COOPERATIVE SOCIETY FOR RECEIVING ANY INTEREST OR DIVIDEND INCOME FROM ANY OTHER COOPERATIVE SOCIETY. SI NCE THE SAME HAS BEEN RECEIVED FROM A COOPERATIVE BANK WHICH IS DISTINCT FROM A COOPERATIVE SOCIETY, THEREFORE, THE ASSESSEE IS NOT ENTITLED TO THE SAME FOR WHICH HE DISALLOWED THE CLAIM OF DEDUCTION U/S.80P(2)(D). THE SAME HAS BEEN UPHELD BY THE CIT(A). 7.1 IT IS THE CASE OF THE LD. COUNSEL FOR THE ASSESSEE THAT EVEN THOUGH THE ASSESSEE HAS RECEIVED INTEREST ON DEPOSITS WITH SINDHUDURG CENTRAL COOPERATIVE BANK AND RECEIVED DIVIDEND ON SHARES OF THE SAID COOPERATIVE BANK, HOWEVER, THE FACT REMAINS THAT SI NDHUDURG CENTRAL COOPERATIVE BANK IS ALSO A COOPERATIVE SOCIETY. 7.2 WE FIND AN IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN THE CASE OF M/S. JANATA GRAHAK MADHYAVARTI SAHAKARI SANGH MARYADIT (SUPRA). WE FIND THE TRIBUNAL, FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF BAJAJ AUTO LTD. EMPLOYEES CREDIT COOPERATIVE SOCIETY LTD. VIDE ITA NO.1047/PN/2012 DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND ALLOWED THE CLAIM OF DEDUCTION U/S.80P(2)(D) FOR INTEREST RECEIVED ON THE DEPOSITS WITH THE AURA NGABAD DISTRICT CENTRAL COOPERATIVE BANK. THE RELEVANT OBSERVATION OF THE TRIBUNAL READS AS UNDER : ITA NO. 1 677 /PN/20 1 4 ITA NO.1567/PN/2014 6 2. AT THE OUTSET OF HEARING, LEARNED AUTHORIZED REPRESENTATIVE POINTED OUT THAT THIS ISSUE IS COVERED IN FAVOUR OF ASSESSEE BY THE DECISION OF ITAT, PUN E B BENCH IN ITA NO.L047/PN/2012 IN THE CASE OF ACIT VS. M/S. BAJAJ AUTO LTD. EMPLOYEES CO - OP. CREDIT SOCIETY LTD., WHEREIN THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER: '4. WE HAVE HEARD THE LD. DR. NONE WAS PRESENT FOR THE ASSESSEE. WE HAVE ALSO PERUSED THE ORDER OF THE AUTHORITIES BELOW. IN OUR OPINION SO FAR AS THE AMOUNT OF INTEREST RECEIVED ON THE DEPOSIT WITH AURANGABAD DISTRICT CENTRAL CO - OPERATIVE BANK IS CONCERNED THE ASSESSING OFFICER HAS NOT PROPERLY APPREC IATED THE PROVISIONS OF LAW. SEC. 80P(2)(D) READS AS UNDER: 80P(1): WHERE, IN THE CASE OF AN ASSESSEE BEING A CO - OPERATIVE SOCIETY, THE GROSS TOTAL INCOME INCLUDES ANY INCOME REFERRED TO IN SUB - SECTION (2), THERE SHALL BE DEDUCTED, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION, THE SUMS SPECIFIED IN SUB - SECTION (2), IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE. 80P(2): THE SUMS REFERRED TO IN SUB - SECTION (1) SHALL BE THE FOLLOWING, NAMELY: (A) ........... (B) ........... (C ) 2(D): IN RESPECT OF ANY INCOME BY WAY OF INTEREST OR DIVIDENDS DERIVED BY THE CO - OPERATIVE SOCIETY FROM ITS INVESTMENTS WITH ANY OTHER CO - OPERATIVE SOCIETY, THE WHOLE OF SUCH INCOME; 5. SUB - SEC. (4) OF SEC. 80 P HAS WITHDRAWN THE DEDUCTION TO THE 5. SUB - SEC. (4) OF SEC. 80 P HAS WITHDRAWN THE DEDUCTION TO THE CO OP ERATIVE BANK OTHER THAN PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO - OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK W.E.F. THE A.Y. 2007 - 08. THE SAID PROVISION IS APPLICABLE TO THE AURANGABAD DISTRICT CENTRAL CO - OPERATIVE BANK (ADCCB) IN WHICH TH E ASSESSEE SOCIETY HAS KEPT DEPOSIT. THE WITHDRAWAL OF DEDUCTION BY INSERTION OF SUB - SECTION (4) OF SEC. SOP DOES NOT CHANGE 'STATUS' OF AURANGABAD DISTRICT CENTRAL CO - OPERATIVE BANK 'AS A CO - OPERATIVE SOCIETY WHICH IS CONTEMPLATED IN SEC. 80P(1) OF THE AC T. WE, THEREFORE, HOLD THAT THE INTEREST RECEIVED ON THE DEPOSIT WITH THE AURANGABAD DISTRICT CENTRAL CO - OPERATIVE BANK BY THE ASSESSEE ON THE DEPOSITS ARE SQUARELY COVERED U/S. 80P(2)(D) AND THE INTEREST RECEIVED ON DEPOSIT KEPT WITH THE AURANGABAD DISTRI CT CENTRAL CO OPERATIVE BANK IS AN ALLOWABLE DEDUCTION. SO FAR AS THE FINDING OF THE LD. CIT(A) THAT THE PROVISIONS OF SEC. 80P(2)(A)(I), IN OUR OPINION THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF TOTAGARS COOPERATIVE VS. ITO (SUPRA) IS AGAINS T THE ASSESSEE AS INTEREST RECEIVED ON DEPOSITS WITH AURANGABAD DISTRICT CENTRAL CO - OPERATIVE BANK CANNOT BE SAID TO BE THE INCOME DERIVED FROM PROVIDING CREDIT FACILITIES TO ITS MEMBERS. WE, ACCORDINGLY, ANSWER THE GROUND TAKEN BY THE REVENUE. BUT, FINALL Y WE HAVE CONFIRMED ORDER OF LD. CIT(A) GIVING RELIEF TO THE ASSESSEE U/S. 80P(2)(D).' 2.1 FACTS BEING SIMILAR, SO FOLLOWING THE SAME REASONING, THE ASSESSEE IS ENTITLED TO DEDUCTION U/S.80P(2)(D). IN VIEW OF ABOVE, ASSESSEE IS ELIGIBLE FOR CLAIMING DEDUC TION U/S.80P(2)(D) OF I.T ACT, WHICH IS AVAILABLE FOR INCOME EARNED FROM BUSINESS AND NOT FROM OTHER SOURCES AS RIGHTLY HELD BY CIT(A). WE UPHOLD THE SAME. ITA NO. 1 677 /PN/20 1 4 ITA NO.1567/PN/2014 7 3. IN THE RESULT, APPEAL FILED BY REVENUE IS DISMISSED. 7.3 RESPECTFULLY FOLLOWING THE ABOVE DECISION, WE HOLD THAT THE INTEREST INCOME OF RS.31,77,452/ - AND DIVIDEND INCOME OF RS.5,41,667/ - RECEIVED BY THE ASSESSEE COOPERATIVE SOCIETY IS ELIGIBLE FOR DEDUCTION/S.80P(2)(D) OF THE I.T. ACT. GROUND OF APPEAL ON THIS ISSUE BY THE ASSESSEE ARE ACCOR DINGLY ALLOWED. 9. FURTHER, THE PUNE BENCH OF TRIBUNAL IN SINDHUDURG DISTRICT PRIMARY TEACHERS CO - OPERATIVE CREDIT SOCIETY LTD. VS. ITO (SUPRA) ALSO ALLOWED THE CLAIM OF ASSESSEE IN RESPECT OF BOTH THE INTEREST INCOME ON BANK DEPOSITS WITH SINDHUDURG CEN TRAL CO - OPERATIVE BANK AND ALSO DIVIDEND INCOME RECEIVED ON SHARES WITH THE SAID CONCERN. THE TRIBUNAL HELD THAT SINCE SINDHUDURG DISTRICT CO - OPERATIVE BANK WAS A CO - OPERATIVE SOCIETY AND HENCE, WAS ELIGIBLE FOR DEDUCTION UNDER SECTION 80P(2)(D) OF THE AC T ON ACCOUNT OF INCOME RECEIVED BY WAY OF INTEREST OR DIVIDEND DERIVED BY THE CO - OPERATIVE SOCIETY FROM ITS INVESTMENT WITH ANY OTHER CO - OPERATIVE SOCIETIES . S IMILARLY, DIVIDEND INCOME RECEIVED ON THE SHARES OF SINDHUDURG DISTRICT CO - OPERATIVE BANK LTD. W ERE ALSO HELD TO BE ELIGIBLE FOR DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT, IN TURN, FOLLOWING THE EARLIER ORDER OF TRIBUNAL . THE RELEVANT FINDINGS OF THE TRIBUNAL ARE AS UNDER: - 3. WE HAVE HEARD THE PARTIES. THE LD. COUNSEL SUBMITS THAT THE ASSESSEE HAS EARNED THE INTEREST INCOME ON ITS BANK ACCOUNT WITH SINDHUDURG DISTRICT CENTRAL CO - OPERATIVE BANK LTD. WHICH IS A CO - OPERATIVE SOCIETY. HE PLEADS THAT AS PER THE PROVISIONS OF SEC. 80P(2)(D) OF THE ACT THE ASSESSEE IS OTHERWISE ALSO ELIGIBLE TO CLAIM THE DEDUCTION OF THE ENTIRE INTEREST INCOME IF THE SAME IS EARNED OR RECEIVED FROM ANOTHER CO - OPERATIVE SOCIETY. HE SUBMITS THAT SINDHUDURG DISTRICT CENTRAL CO - OPERATIVE BANK LTD. IS A CO - OPERATIVE SOCIETY AND MERELY BECAUSE IT IS ENGAGED IN THE BUSINESS OF BANKING THAT WOULD NOT CHANGE THE ELIGIBILITY FOR THE ASSESSEE TO CLAIM THE DEDUCTION U/S. 80P(2)(D) OF THE ACT. WE FIND FORCE IN THE ARGUMENT OF THE LD. COUNSEL. THE RELEVANT PART OF SEC. 80P(2)(D) OF THE ACT READS AS UNDER: 80P(1): WHERE, IN THE C ASE OF AN ASSESSEE BEING A CO OPERATIVE SOCIETY, THE GROSS TOTAL INCOME INCLUDES ANY INCOME REFERRED TO IN SUB - SECTION (2), THERE SHALL BE DEDUCTED, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION, THE SUMS SPECIFIED IN SUB SECTION (2), IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE. 80P(2): THE SUMS REFERRED TO IN SUB - SECTION (1) SHALL BE THE FOLLOWING, NAMELY: (A) ........... (B) ........... (C) ITA NO. 1 677 /PN/20 1 4 ITA NO.1567/PN/2014 8 2(D): IN RESPECT OF ANY INCOME BY WAY OF INTEREST OR DIVIDENDS DERIVED BY THE CO - OPERA TIVE SOCIETY FROM ITS INVESTMENTS WITH ANY OTHER CO - OPERATIVE SOCIETY, THE WHOLE OF SUCH INCOME; 4. WE ALSO FIND THAT DEDUCTION U/S. 80P(2)(D) CLAIMED OF THE ASSESSEE IS WELL SUPPORTED BY THE DECISION OF THE ITAT, CHANDIGARH IN THE CASE OF PUNJAB STATE FEDERATION OF CO - OPERATIVE HOUSE BUILDING SOCIETIES LTD . VS. INCOME TAX OFFICER 2 ITD 617 (CHD.). THERE IS NO AMBIGUITY IN THE LANGUAGE OF SEC. 80P(2)(D). SINDHUDURG DISTRICT CENTRAL CO - OPERATIVE BANK LTD. IS A CO - OPERATIVE SOCIETY THOUGH ENGAGED IN THE BUSINESS OF BANKING AND HENCE, THE ASSESSEE IS ENTITLED TO CLAIM THE DEDUCTION IN RESPECT OF THE INTEREST EARNED OR RECEIVED FROM THE SINDHUDURG DISTRICT CENTRAL CO - OPERATIVE BANK LTD. ON THE PLAIN READING OF THE LANGUAGE USED IN SEC. 80P(2)(D) IN OUR OPI NION IT IS AN INDEPENDENT DEDUCTION OTHER THAN THAT OF SEC. 80P(2)(A)(I). WE, THEREFORE, HOLD THAT THE INTEREST INCOME EARNED ON THE FIXED DEPOSIT OR ANY OTHER BANK ACCOUNT WITH SINDHUDURG DISTRICT CENTRAL CO - OPERATIVE BANK LTD. IS ALLOWABLE AS A DEDUCTIO N ON GROSS BASIS U/S. 80P(2)(D) OF THE ACT. ACCORDINGLY, THIS ISSUE IS DECIDE IN FAVOUR OF THE ASSESSEE. 10. THE ISSUE ARISING IN THE PRESENT APPEAL IS IDENTICAL TO THE ISSUE BEFORE PUNE BENCH OF TRIBUNAL IN SINDHUDURG ZILLA MADHYAMIK ADHYAPAK SAHAKARI PATPEDHI MARYADIT (SUPRA) AND SINDHUDURG DISTRICT PRIMARY TEACHERS CO - OPERATIVE CREDIT SOCIETY LTD. VS. ITO (SUPRA) . THE ASSESSEE BEING A CREDIT CO - OPERATIVE SOCIETY HAD MADE INVESTMENT IN A CO - OPERATIVE BANK BY WAY OF DEPOSITS AND ALSO SHARES OF SINDHUDU RG CENTRAL CO - OPERATIVE BANK, WHICH HAS DEPOSITS AND ALSO SHARES OF SINDHUDU RG CENTRAL CO - OPERATIVE BANK, WHICH HAS BEEN HELD TO BE CO - OPERATIVE SOCIETY BY CO - ORDINATE BENCH OF THE TRIBUNAL. FOLLOWING THE SAME PARITY OF REASONING, I HOLD THAT THE ASSESSEE IS ELIGIBLE TO CLAIM THE DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT IN RE SPECT OF BOTH THE INTEREST INCOME AND DIVIDEND INCOME RECEIVED FROM SINDHUDURG CENTRAL CO - OPERATIVE BANK. THE ALTERNATE PLEA OF THE ASSESSEE OF CLAIM OF DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT THUS, DOES NOT SURVIVE. ACCORDINGLY, THE GROUNDS OF A PPEAL RAISED BY THE ASSESSEE ARE ALLOWED AS INDICATED ABOVE. 11. THE ISSUE IN ITA NO.1567/PN/2014 OF CLAIM OF DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT IN RESPECT OF INTEREST INCOME OF RS. 27,05,824/ - ON INVESTMENT AND RS.98,214/ - ON SAVINGS BANK ACCOUN T RECEIVED FROM SINDHUDURG CENTRAL CO - OPERATIVE BANK AND ITS ELIGIBILITY FOR DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT IS SQUARELY IDENTICAL TO THE ISSUE IN ITA NO.1677/PN/2014 AND THE DECISION IN ITA NO.1677/PN/2014 SHALL APPLY MUTATIS MUTANDIS TO ITA ITA NO. 1 677 /PN/20 1 4 ITA NO.1567/PN/2014 9 NO.1567/PN/2014. IN THIS APPEAL ALSO, THE ASSESSEE HAS RAISED AN ALTERNATE PLEA OF CLAIM OF DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT, WHICH DOES NOT SURVIVE ONCE THE INCOME IS HELD TO BE ELIGIBLE FOR DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT AND THE ALTERNATE PLEA IS THUS, DISMISSED. 1 2 . IN THE RESULT, BOTH THE APPEAL S OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON THIS 17 TH DAY OF JUNE , 201 6 . SD/ - (SUSHMA CHOWLA) / JUDICIAL MEMBER / PUNE ; DATED : 17 TH JUNE , 201 6 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPO NDENT; 2. / THE RESPO NDENT; 3. ( ) / THE CIT(A) , KOLHAPUR ; 4. / THE CIT - I / II, KOLHAPUR / CIT (CENTRAL), PUNE ; 5. 6. , , , - / DR SMC , ITAT, PUNE; / GUARD FILE . / BY OR DER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE