Armed Forces Ex-Officers Multiservices Co-operative Society Ltd. vs. ITO, NFAC, Pune

Parties Involved

Facts Summary

The assessee is a multiservices cooperative society registered under Maharashtra Co-operative Societies Act. The assessee derives income under the head 'Income from other sources' mainly from interest income from other cooperative society. The return of income was filed on 21.09.2013 declaring total income of Rs.3,02,59,276/- after claiming deduction of Rs.1,65,02,105/- u/s 80P(2)(d) of the IT Act regarding interest income from other cooperative societies. The case was selected for scrutiny and notice u/s 143(2) was issued and served upon the assessee. The assessment was completed u/s 143(3) of the IT Act on 05.01.2016 accepting the returned income declared by the assessee. Thereafter, a notice u/s 148 was issued on 28.03.2021 and served upon the assessee. The reason for reopening the assessment was that the assessee has claimed deduction u/s 80P2(d) of Rs.1,65,02,105/- on account of interest income earned on its investments with other cooperative banks in the light of judgement of the Hon’ble High Court of Karnataka in the case of PCIT, Hubballi vs. Totagars Co-operative Sale Society, 395 ITR 611 order dated 16.06.2017, wherein, it was held that the interest earned by a cooperative society from surplus, deposits, cash with a cooperative bank was not eligible for deduction u/s 80P(2)(d) of the IT Act. The notice u/s 142(1) was issued along with questionnaire. The Assessing Officer was of the view that the assessee society has to invest funds with cooperative society and not w…

Legal Issues

• 1. The Learned Assessing Officer erred in disallowing the claim of deduction made under section 80P(2)(d) of INR 1,65,02,105.
• 2. The learned Officer erred in considering the income from house property and income from capital gains amounting to INR 20,17,659/- twice while computing the income as per the assessment order under section 147 rws 144 rws 1448 dated 26 March 2022.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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