Citation Codes

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Case Number

ITA No. 2166/Ahd/2014 Assessment Year 2009-10

Attorney(S)

Shri Ashish Pophere, Sr. D.R., for the Revenue;
Shri Mitesh Modi with Shri Akhary Modi, A.R., for the Assessee.

Judges

Rajpal Yadav, J.M.
Amarjit Singh, A.M.

Acts

Income Tax Act) 81,00,375/- Other Income 8,14,697/- Total 6,88,20,6487- Total 6,88,20,64
section 80P(2)(d) of the I.T. Act and as provision of section 80P(4) of the IT Act
Section 80P(2)(d) of the Income-tax Act, 1961.
section 143(3) of the Income Tax Act, 1961;
Income Tax Act) 3,24,40,27

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Smart Summary

Tribunal Summary — Revenue Appeal for A.Y. 2009-10 (Order by Amarjit Singh, A.M.)

Factual and Procedural Background

This is a revenue appeal for assessment year 2009-10 arising from the order of the CIT(A)-I, Surat dated 04-04-2014 in appeal no. CAS-I/TFR/478/2012-13 in proceedings under section 143(3) of the Income Tax Act, 1961.

Key factual and procedural points as set out in the opinion:

Return of income was filed on 18 September 2009 declaring nil income; the case was selected for scrutiny and notice under section 143(2) was issued on 29 August 2011.
The assessing officer (AO) determined the assessee's gross income at Rs. 6,88,20,648 and, after allowing expenses, a net business/profit amount of Rs. 1,36,41,639. The assessee had claimed deduction under section 80P of the Income Tax Act to reduce taxable income (in the return it had claimed deductions resulting in nil declared income).
The AO examined interest/dividend receipts claimed under section 80P(2)(d) (totaling Rs. 4,05,40,653 as shown by the assessee — comprising interest and share dividend) and interest expense and other outgoes (interest on deposits of Rs. 4,66,56,566; salary Rs. 29,03,691; other expenses Rs. 56,18,752; and other income items). The AO found overall gross interest income during the year of Rs. 5,99,05,576.
The AO concluded that the assessee had no separate funds earmarked for investment and that deposits received from members were advanced as loans; excess funds were deposited in banks from which the assessee earned interest. The AO considered there was a direct nexus between the expenses and the income and therefore applied a pro rata allocation of expenses against the income claimed under section 80P(2)(d).
The AO also held that interest income received from co-operative banks was not allowable under section 80P (referring to section 80P(2)(d) and the proviso in section 80P(4) inserted w.e.f. 1 April 2007) and thereby disallowed a large portion of the deduction claimed. The AO allowed a limited deduction (worked out as Rs. 5,30,332 after proportional allocation) and disallowed the remainder (Rs. 1,30,61,307 claimed by the assessee).
The assessee appealed to the CIT(A), who allowed the appeal and granted deduction under section 80P(2)(d) on the net income (up to Rs. 1,36,41,639). The Revenue appealed to the Tribunal against the CIT(A) order. The Tribunal ultimately dismissed the Revenue's appeal.

Legal Issues Presented

Whether the assessing officer was justified in proportionately disallowing deduction under section 80P(2)(d) by allocating general interest and other expenses against the interest/dividend income earned from other co-operative societies (including co-operative banks).
Whether interest income earned from co-operative banks is eligible for deduction under section 80P(2)(d) in light of section 80P(4) (as amended w.e.f. 1 April 2007) which restricts the application of section 80P in relation to certain co-operative banks.
Whether the deduction under section 80P(2)(d) is to be allowed on the gross amount of interest/dividend received or on the net amount (i.e., after allowing expenses), including the application of Section 80AB as to deductions in Chapter VI-A.

Arguments of the Parties

Appellant (Revenue)'s Arguments

The AO argued that the assessee had no separate funds exclusively invested to earn interest/dividend; funds accepted from members were largely advanced as loans and the excess deposited in banks produced interest income.
The AO maintained there was a direct nexus between the interest/other expenses incurred by the assessee and the income received; thus a pro rata allocation of expenses against the interest/dividend receipts was appropriate and justified.
The AO relied on the position that interest income received from co-operative banks is not allowable under section 80P because section 80P(4) (as inserted w.e.f. 1 April 2007) excludes co-operative banks (other than specified primary agricultural/co-op banks) from the benefit of section 80P.
The Revenue, via grounds of appeal, sought to have the CIT(A) order set aside and the AO's proportionate disallowance restored.

Respondent (Assessee)'s Arguments

The assessee's position (as accepted and articulated by CIT(A)) was that it had been investing surplus funds with other co-operative societies (including co-operative banks) since 1992 and that the interest/dividend receipts were from long-standing statutory investments rather than new investments made during the year.
The assessee (supported by CIT(A)) argued there was no direct or indirect expenditure incurred specifically for earning the interest/dividend income from those long-standing investments; hence the AO's pro rata allocation and partial disallowance was unjustified.
The assessee claimed deduction under section 80P(2)(d) for interest/dividend receipts and, in the computation, restricted the deduction to its net income after expenses (Rs. 1,36,41,639), relying on the principle that deductions under Chapter VI-A are to be allowed with reference to income computed under the Act.
The assessee (and CIT(A)) relied on earlier judicial decisions (ITAT and High Court authority) to support that interest/dividend from co-operative societies, including certain co-operative banks, are eligible for deduction under section 80P(2)(d) without adjustment for interest paid to banks.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
DCIT v. The Surat Dist. Co-operative Mills Producer Union Ltd., ITA Nos. 367 & 3386/Ahd/2010 & ITA No. 1739/Ahd/2011 (ITAT), order dated 02.08.2013	Held that where investments were made long ago and no new investments were made during the year, the appellant had not incurred expenditure for earning the dividend/interest from other co-operative societies; therefore deduction under section 80P(2)(d) could not be denied by pro rata allocation of expenses.	The CIT(A) relied on this ITAT decision to conclude that the AO's proportionate disallowance of the deduction was unjustified; the Tribunal noted and followed this reasoning in confirming the CIT(A)'s deletion of the AO's addition.
Distributors (Baroda) (P) Ltd. v. Union of India [1985] 155 ITR 120 (SC)	Held that deduction under a section in Chapter VI-A (reference made to section 80M in that case) should be calculated with reference to the amount of income computed in accordance with the provisions of the Act (i.e., part of gross total income) and not necessarily the full amount received; principle applied to deductions under Chapter VI-A generally.	The CIT(A) and the Tribunal referred to this Supreme Court decision to support the proposition that deductions under Chapter VI-A (including section 80P) are to be allowed with reference to income computed as per the Act (net income after allowable expenses) rather than on an unadjusted gross receipt.
Surat Vankar Sahakari Sangh Ltd. v. Assistant Commissioner of Income Tax (2016) 72 taxmann.com 169 (Gujarat)	High Court held that section 80P(2)(d) allows deduction of interest/dividend derived by a co-operative society from investments with any other co-operative society and that the section does not require adjustment for interest paid to banks; deduction was allowed on interest received from a co-operative bank without adjusting interest paid to the bank.	The Tribunal relied on this High Court decision to conclude that the proviso in section 80P(4) did not, on the facts of this assessee, operate to deny the deduction for interest received from co-operative banks and to support the CIT(A)'s view that the assessee's receipts from co-operative banks were eligible under section 80P(2)(d).

Court's Reasoning and Analysis

The Tribunal's analysis proceeded through the following steps, as reflected in the opinion:

Context and factual evaluation: The Tribunal noted factual findings that the assessee had been investing surplus funds with other co-operative societies (including co-operative banks) since 1992 and that the interest and dividend receipts were from such longstanding investments rather than from investments made during the year after borrowing or incurring specific expenditure to earn that income.
Review of AO's pro rata allocation: The Tribunal (following the CIT(A)) examined the AO's method of proportionately allocating total interest and other expenses against interest/dividend receipts claimed under section 80P(2)(d). The Tribunal found that allocation had been effected "without examining the issue in details or appreciating the facts in its correct prospective" and that there was no evidence of any expenses directly or indirectly correlated to the income from historic investments.
Application of precedent: The Tribunal relied on the ITAT decision in DCIT v. The Surat Dist. Co-operative Mills Producer Union Ltd., which held that where investments were made long back and no new investment was made during the year, expenditure had not been incurred for earning the dividend/interest, so the proportional disallowance was not warranted. This supported the conclusion that the AO's disallowance could not be sustained on the facts.
Gross versus net deduction analysis: The Tribunal considered whether the deduction under section 80P(2)(d) is allowable on the gross receipts or on the net amount after expenses. It referred to the principle (citing Distributors (Baroda) (P) Ltd. and Section 80AB as set out in the CIT(A)'s analysis) that deductions under Chapter VI-A are to be allowed with reference to the income computed in accordance with the Act; thus the deduction should be allowed on the net income (after expenses) that forms part of the assessee's gross total income as computed under the Act.
Application of section 80P(4): The Tribunal examined the AO's reliance on section 80P(4) (which restricts applicability of section 80P in relation to certain co-operative banks). The Tribunal concluded that the proviso in section 80P(4) was not applicable to the assessee's facts as presented and relied upon the Gujarat High Court decision in Surat Vankar Sahakari Sangh Ltd., which allowed deduction under section 80P(2)(d) for interest received from a co-operative bank without adjusting interest paid to the bank.
Conclusion by application of legal principles to facts: On the combination of factual findings (longstanding investments; absence of specific expenditure incurred to earn the challenged receipts), statutory interpretation (Section 80AB / Chapter VI-A deduction principle), and judicial precedents, the Tribunal concluded that the CIT(A) was correct to allow the deduction on the net income figure and that the AO's proportionate disallowance and exclusion of interest from co-operative banks could not be sustained.

Holding and Implications

APPEAL DISMISSED

Holding (direct outcome):

The Tribunal dismissed the Revenue's appeal and refused to interfere with the CIT(A)'s order.
The Tribunal held that the assessee is eligible for deduction under section 80P(2)(d) of the Income Tax Act in the amount of Rs. 1,36,41,639 (the net income figure determined after allowable expenses), rather than the much smaller amount allowed by the AO through pro rata allocation.

Implications:

Direct effect: The CIT(A)'s order in favour of the assessee is restored/confirmed and the AO's proportionate disallowance and rejection of large part of the section 80P claim is set aside in this appeal.
Broader implications: The opinion relies on existing ITAT and High Court decisions for its reasoning (as summarized above). The Tribunal's decision in this case applies the cited precedents and statutory interpretation to the facts; the opinion does not purport to lay down a new legal principle beyond the application of those precedents and statutory provisions to the facts of this appeal.

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Cit v. Bardoli Vibhag Gram Vikas Co-Op. Credit Society Ltd.

Amarjit Singh, A.M.:— This revenue's appeal for A.Y. 2009-10, arises from order of the CIT(A)-I, Surat dated 04-04-2014 in appeal no. CAS-I/TFR/478/2012-13, in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”.

2. The assessee has raised following grounds of appeal:—

“1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in concluding that there is no nexus between the interest/dividend income earned from the co-op, societies and the interest expenditure incurred by the assesses on borrowed funds on the ground that there is no proof of the investment of such interest bearing funds to earn the said income without appreciating the fact that the assessee has failed to substantiate the above in full measure with proper evidences.

2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that no expenses were incurred for earning such income on which assessee has claimed deduction u/s. 80P(2)(d) despite the fact that the assessee had been using interest bearing funds for its normal business activity of advancing credit to members.

3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in not appreciating that such income on which assessee has claimed deduction u/s. 80P(2)(d) was earned from investments made from non-interest bearing funds.

4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that provisions of Sec. 80P(2)(d) and 80P(4) of the Act clearly states that tahe interest received from other co-operative societies are eligible for deduction and not from co-op, banks. As per the provisions of Sec. 80P(4) of the Act, it is clear that co-op. banks do not fall under the category of co-op.societies. Thus, the AO has rightly held that the interest income received from co-op, banks are not allowable u/s. 80P of the Act in the case of the assessee.

5. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) Surat ought to have upheld the order of the Assessing Officer. It is, therefore, prayed that the order of the Ld. CIT(A), Surat may be set aside and that of the Assessing Officers order may be restored.”

The grounds of appeal of the Revenue are interconnected so these are decided together as under:—

3. In this case, return of income declaring income of Rs. nil was filed on 18 September, 2009. Subsequently, the case was selected under scrutiny by issuing notice u/s. 143(2) of the act on 29 August, 2011. During the course of assessment proceedings, the assessing officer observed that assessee has earned gross income of Rs. 6,88,20,648/- and after allowing deduction of expenses declared income from business and provision of Rs. 1,36,41,639/-. Thereafter, the assessee claimed deduction u/s. 80P of the act and declared nil income in the return of income.

The assessing officer noticed that the following income was shown as eligible for claiming deduction u/s. 80P of the act.

a b Basic deduction Rs. 50,000/- Interest and dividend from other coop, societies Rs. 4,05,40,653/- Total Rs. 4,05,90,653/-

The assessing officer has bifurcated the interest income/expenses, along with income/expenditure under the different other heads as under:—

Expenditure Amount Income Amount Interest on deposits 4,66,56,566/- Interest received from the Co-op. Societies and Co-op. Bank (Claimed as eligible income for deduction u/s. 80P of the Income Tax Act) 3,24,40,27 8/- Salary Expenses 29,03,691/- Interest from other than co--op. Society 3,39,025/- Other Expenses 56,18,752/- Interest rec. from other than co-op. FD 5,06,720/- Profit 1,36,41,6397- Interest received from Harsh Developers advances 20,15,158/- Interest from loan advances 1,11,91,68 1/- Interest from branch accounts 1,21,47,66 5/- Interest from premature FDs 12,65,049/- Total 5,99,05,57 6/- Share Dividend (Claim as eligible income for deduction u/s. 80P of the Income Tax Act) 81,00,375/- Other Income 8,14,697/- Total 6,88,20,6487- Total 6,88,20,64 87-

Thereafter, AO computed the income claimed by assessee as eligible for deduction u/s. SOP of the Act as under:—

Surat Dist. Co-op. Bank 23,08,316/- Madhi Vibhag Khand Udyog Mandali 7,14,286/- Khedut Sahakari Jin & Press. Society 15,77,351/- Gujarat State Fruits and Veg. Federation Ltd. 1,97,260/- Mota Vibhag Seva Sahakari 1,86,575/- Surat Dist. Co-op. Bank 2,50,44,943/- Surat Dist. Co-op. Bank 24,11,547/- Share Dividend 81,00,375/- Total 4,05,40,653/-.

The assessing officer further noticed that during the year, the assessee has earned total gross interest income of Rs. 5,99,05,576/-. The assessing officer observed that assessee was not having any funds for investment to earn interest income and whatever deposit received from the members were provided loan out to the other member. The excess amount was deposited in the bank from which the assessee has earned interest income. He further observed that whatever assessee has accepted from the members it has paid interest and on the amount of loan given to its members and on the amount deposited in the bank it has earned interest income. He observed that there was direct nexus between the entire expenses claimed and entire income received. The assessing officer stated that the assessee has shown interest and salary expenses of Rs. 56,18,652/- and also shown other income of Rs. 2,82,79,995/- which was not eligible for deduction u/s. 80P of the act. The assessing officer further noticed that assessee has earned total income of Rs. 6,88,20,648/- including the so called eligible income for deduction u/s 80 P of the act Rs. 4,05,40,653. He also stated that the assessee has increased expenses of Rs. 5,51,79,009/- and the net income of the assessee was only Rs. 1,36,41,639/- but it has claimed deduction u/s. 80P of the act of Rs. 40,540,653/-. The assessing officer further stated that interest income received from co-operative banks was not allowable u/s. 80P of the act as per section 80P(2)(d) of the I.T. Act and as provision of section 80P(4) of the IT Act inserted w.e.f. 1 April, 2007, the provision of the section 80P of the IT Act shall not apply to any co-operative bank, it means that the co-operative bank engaged in the business of banking regulatory act cannot be treated as cooperative society and hence the income derived from the cooperative bank are not eligible for deduction u/s. 80P of the act. Therefore, the assessing officer was of the view that the assessee had wrongly claimed the deduction u/s 80P of the act on gross income and also claimed deduction on the interest income from the co-op bank i.e. Surat Distt. Co.Op. Bank Ltd. Thereafter the assessing officer concluded that as per details submitted, the assessee is eligible for 80P deduction in respect of following income only.

Madhi Vibhag Khand Udyog Mandali 714286 Khedut Sahakari Jin & Press. Society 1577351 Gujarat State Fruits and Veg. Federation Ltd. 197260 Mota Vibhag Seva Sahakari 186575 Total 2675472

Thereafter, the assessing officer has worked the deduction u/s. 80P to the amount of Rs. 5,30,332/- after taking into account income of Rs. 26,75,472/- and the corresponding expenses of Rs. 21,45,140 (5,51,70,009/6,88,20,648 × 26,75,472) as worked out for earning this income. The assessing officer has rejected the claim of 80P of the assessee for the remaining deduction of Rs. 1,30,61,307 claimed by it.

4. Aggrieved against the order of assessing officer, the assessee filed appeal before the Ld. CIT(A). The ld. CIT(A) has allowed the appeal of the assessee by observing as under:—

“5. I have considered the facts of the case, basis of disallowance by AO and submissions of appellant. The AO has worked out the deduction u/s. 80P(2)(d) at Rs. 26,75,475/- by excluding the interest received by appellant from Co-operative banks including Surat Dist. Co-operative Bank Ltd. This amount is further reduced on proportionate basis by taking into account the total receipts and total expenses as shown by appellant and finally the allowable deduction is worked out by him at Rs. 21,45,140/-. Thus, the AO has not allowed the deduction on the interest and dividend received from Co-operative banks and also on gross amount of interest and dividend received from other Co-operative societies. This stand taken by AO does not find support from the facts of the case. As submitted, the appellant society has been statutorily investing its surplus fund from the year 1992 with other Co-operative Societies which include Co-operative Banks. On such investments, the appellant has been receiving interest and dividend which has been claimed as deduction u/s. 80P(2)(d) of the Act. It is not a case where this income has derived out of investments made during the year for which the appellant has incurred any expenditure directly or indirectly. An analysis of interest expenses would show that the same has been incurred by way of interest paid to members societies saving accounts, FD accounts and other deposits. It is evident from the details of interest expenses that there is no direct or indirect nexus between such expenses and interest and dividend earned from investments made with other Co-operative societies. The pro-rata allocation of interest expenses resulting in part disallowance of deduction has been done without examining the issue in details or appreciating the facts in its correct prospective. Therefore, in absence of any expenses directly or indirectly co-related to such income, the part disallowance of the deduction is not justified. On the identical facts, Hon'ble Jurisdictional ITAT in the case DCIT v. The Surat Dist. Co-operative Mills Producer Union Ltd. ITA No. 367 & 3386/Ahd/2010 &. ITA No. 1739/Ahd/2011 vide order dated 02.08.2013 has dealt with the issue and after discussing the various decisions of different Courts and Benches of ITATs, has held as under:—

“5. We have heard the rival contentions and perused the material on record. It is undisputed fact that the appellant had invested surplus fund right from 1951 with other co-operative society. On such investment the appellant had been receiving interest and dividend which had been claimed as deduction u/s. 80P(2)(d). It is not a case that appellant had either earned income or borrowed fund and invested in this investment and deposits…………….

Further the A.O. considered Hon'ble Supreme Court decision in Distributors (Baroda) (P) Ltd. v. Union Of India [1985] 155 ITR 120 (SC), wherein, it was held that deduction u/s. 80M is to be calculated with reference to amount on dividend computed in accordance with the provisions of the Act and forming on the gross total income and not with reference to full amount of dividend received by the assessee. The Hon'ble Supreme Court decision is squarely applicable on deduction under any section in Chapter VIA and is to be a/lowed on the net income. However, in the assessee's case, interest expenses were incurred for acquiring debenture, deposit with member society, Fix Deposit of member society, employee saving accounts, interest on over draft facilitate from bank and bank commission, which was claimed by the appellant u/s. 80P(2)(d)(a)(i). For the sake of convenience, we are reproducing sections as under:

Section 80P(2)(a)(i)- Carrying on the business of banking or providing credit facilities to its members.

Section 80P(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.

After considering the factual as well as legal position on this issue, the appellant had not incurred any expenditure on the earning of the dividend and interest from other co-operative society as this investment was made long back. No new investment had been made by the appellant during the year under consideration. Thus, we confirm the order of the CIT(A) in all the years.”

In view of above, Hon'ble ITAT confirmed the order of CIT(A) who had deleted the addition made by AO by disallowing the deduction claimed on account of interest received from other Co-operative societies. Thus, in the case of appellant also, the proportionate disallowance of interest and dividend cannot be held sustainable.

5.1 The next issue, to be decided, is that whether deduction u/s. 8OP(2)(d) is available on the gross amount or the net amount. The appellant has claimed the gross amount of Rs. 4,05,40,653/- u/s. 80P(2)(d) which includes interest income of Rs. 3,24,40,278/- and dividend income of Rs. 81,00,375/- Received from other Co-operative societies. However, in the computation of income, appellant has restricted the deduction at Rs. 1,36,41,639/- which is it's net income. Section 80AB of the Act stipulates that where any deduction is required to be allowed under any section included in Chapter VI-A, the amount of income computed in accordance with the provisions of this Act alone be deemed to be the amount of income which is derived and received by the assessee and which is included in his gross total income. Thus, the appellant is eligible to avail deduction on the net income i.e. after allowing expenses from the gross amount as deduction under any section in Chapter VI-A which includes 80P(2)(d) of the Act. The net income in the case of appellant is Rs. 1,36,41,639/- which is allowable as deduction u/s. 80P(2)(d) of the Act.

5.2 In view of above discussion, I hold that the appellant is eligible for deduction u/s. 80P(2)(d) of the Act at Rs. 1,36,41,639/- in place of Rs. 5,80,332/- allowed by AO.

5.3 In regards to the ground taken by appellant for statutory deduction of Rs. 50,000/- u/s. 80P(2)(c) of the Act, it can be seen from the assessment order that the AO has already allowed this deduction in his concluding para of assessment order. Therefore, the appellant has wrongly taken this ground which deserves to be dismissed.”

5. We have heard rival contentions. We have also gone through the paper book furnished by the Ld. Counsel containing judicial pronouncements, written submission made before the ld. CIT(A), audit reports etc. We have noticed that the assessee has been statutorily investing its surplus fund from the year 1992 with other Cooperative Societies which include Co-operative Banks and on such investments, the appellant has been receiving interest and dividend which has been claimed as deduction u/s. 80P(2)(d) of the Act. We find that the provision of section 80P(4) are not applicable to the assessee, because section 80P(4) says that provision of this section shall not apply in relation to Co-op Bank other than Primary Agricultural Credit societies or a Primary Co-op agricultural and Rural Development Bank. Regarding eligibility for receiving interest received from the co-operative bank we have noticed from the judicial pronouncement in the case of Surat Vankar Sahakari Sangh Ltd. v. Assistant Commissioner of Income Tax (2016) 72 taxmann.com 169 (Gujarat) in which the Hon'ble High Court of Gujarat held as under:—

“8. Section 80P(2)(d) of the Act allows whole deduction of an income by way of interest or dividends ‘derived by the co-operative society from its investment with any other co-operative society. This provision does not make any distinction in regard to source of the investment because this Section envisages deduction in respect of any income derived by the co-operative society from any investment with a co-operative society. It is immaterial whether any interest paid to the co-operative society exceeds the interest received from the bank on investments. The Revenue is not required to look to the nature of the investment whether it was from its surplus funds or otherwise. The Act does not speak of any adjustment as sought to be made out by learned counsel for the Revenue. The provision does not indicate any such adjustment in regard to interest derived from the co-operative society from its investment in any other cooperative society. Therefore, we do not agree with the argument advanced by learned counsel for the Revenue. In our opinion, the learned Tribunal was right in law in allowing deduction under Section 80P(2)(d) of the Income-tax Act, 1961. in respect of interest of Rs. 4,00,919 on account of interest received from Nawanshaln Central Co-operative Bank without adjusting the interest paid to the hank. Therefore, the reference is answered against the Revenue in the affirmative and in favour of the assessee.”

We have further noticed from the finding of the Ld.CIT(A) that the assessee has claimed the gross amount of Rs. 4,05,40,653/- u/s. 80P(2)(d) which includes interest income of Rs. 3,24,40,278/- and dividend income of Rs. 81,00,375/- Received from other Co-operative societies. However, in the computation of income, assessee has restricted the deduction to Rs. 1,36,41,639/- which was net income. Therefore, we considered that the Ld.CIT(A) is justified in his decision that the net income in the case of assessee of Rs. 1,36,41,639/- allowable as deduction u/s. 80P(2)(d) of the Act. In view of the above stated facts and detailed findings of the Ld.CIT(A) given in his order, we disinclined to interfere in the decision of Ld. CIT(A).

6. In the result, the appeal of the revenue is dismissed.

Cit v. Bardoli Vibhag Gram Vikas Co-Op. Credit Society Ltd.

Tribunal Summary — Revenue Appeal for A.Y. 2009-10 (Order by Amarjit Singh, A.M.)

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Appellant (Revenue)'s Arguments

Respondent (Assessee)'s Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Cit v. Bardoli Vibhag Gram Vikas Co-Op. Credit Society Ltd.

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