Rajkot Jilla Co-Op Cotton Marketing Union Ld Vs ITO (ITAT Rajkot)
ITAT Rajkot held that dividend income and interest earned on surplus held with cooperative bank would be eligible for deduction under Sec.80P(2)(d) of the Income Tax Act.
Facts- The assessee is a registered co-operative society engaged in the business of providing pesticides to its members. During the year under consideration, the assessee earned interest and dividend income from its investment in Rajkot District Co-operative Bank Ltd out of it surplus funds. The AO held that the income is neither exempt under section 80P(2)(a)(i) nor under section 80P(2)(d) of the Act. In appeal, Ld. CIT(Appeals) dismissed the assessee’s appeal.
Conclusion- In the case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Cooperative Sale Society (2017) 392 ITR 74 (Karn), the Karnataka High Court has held that the interest income earned by a co-operative society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act.
Held that respectfully following the decision of Honourable High Court of Gujarat and other cases cited above, in our view, dividend income and interest earned by the assessee on surplus held with cooperative bank would be eligible for deduction under Sec.80P(2)(d) of the Act.
FULL TEXT OF THE ORDER OF ITAT RAJKOT
This assessee’s appeal for A.Y. 2016-17, arises from order of the CIT(A)-2, Rajkot dated 16-12-2019, in proceedings under section 143(3) of the Income Tax Act, 1961; in short “the Act”.
2. The assessee has taken the following grounds of appeal:-
Shri Rajkot Jilla Co-operative Marketing Union Ltd. vs. ITO
