A cooperative society can claim deductions under Income Tax Act, 1961, section 80P even if nominal members exist, provided it primarily serves its members.

आदेश/ ORDER

PER DR. DIPAK P. RIPOTE, AM:

The Revenue has filed two appeals for two separate Assessment Years i.e.2017-18 and 2018-19 against two separate orders of ld.Commissioner of Income-tax(Appeals)[NFAC], both dated 06.12.2023 passed under section 250 of the Income Tax Act, 1961 . The assessee has filed two cross objection in C.O.No.23/PUN/2024 and C.O.No.24/PUN/2024 to support order of the ld.CIT(A)[NFAC]. The Revenue in ITA No.450/PUN/2024 for A.Y.2017-18 has raised the following grounds of appeal :

“A. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in allowing deduction on income earned by the assessee from investment in banks and other financial institutions has rendered the provisions of Section 80P (2)(a)(i) nugatory as the said section of the Act allows deduction to a cooperative Society engaged in carrying on business of banking or providing credit facilities to its members ?

B. On the facts and circumstances of the case and in law, Ld. CIT(A) erred in holding that the interest income of Rs.1,47,38,052/- earned by the assessee Cooperative society from fixed deposits kept with various cooperative banks was allowable as deduction u/s 80P(2)(a)(i) of the IT Act, ignoring the decision of Honble High Court of Gujarat in case of State Bank of India vs CIT 389 ITR 578 (Guj) dated 25.04.2016?

C. On the facts and circumstances of the case and in law Ld. CIT (A) erred in holding that the interest income of Rs.1,47,38,052/- earned by the assessee Cooperative Society from fixed deposits kept with various cooperative banks was allowable as deduction u/s 80P(2)(d) of the IT Act, ignoring the decision of Honble High Court of Karnataka in case of PCIT Vs. The Totgars Co-operative Sale Society (2017) 395 ITR 611 dated 16.06.2017?

D. On the facts and circumstances of the case and in law, Ld. CIT(A) erred in relying upon the decision of the. Co-ordinate Bench of the Tribunal in the case of Jankalyan Nagri Sahakari Pat Sanshta Ltd. and ignoring the decision of the Hon'ble Gujarat High Court in the case of State Bank of India vs CIT 389 ITR 578 (GUJ), Wherein it has been held that interest income on deposits kept with banks was not eligible for deduction u/s 80P(2)(a)(i) of the Act?”

1.1 The Revenue in ITA No.451/PUN/2024 for A.Y.2018-19 has raised the following grounds of appeal :

“A. On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in allowing deduction on income earned by the assessee from investment in banks and other financial institutions has rendered the provisions of Section 80P (2)(a)(i) nugatory as the said section of the Act allows deduction to a cooperative Society engaged in carrying on business of banking or providing credit facilities to its members ?

B. On the facts and circumstances of the case and in law, Ld.CIT(A) erred in holding that the interest income of Rs.1,61,20,972/- earned by the assessee Cooperative society from fixed deposits kept with various cooperative banks was allowable as deduction u/s 80P(2)(a)(i) of the IT Act, ignoring the decision of Hon’ble High Court of Gujarat in case of State Bank of India vs CIT 389 ITR 578 (Guj) dated 25.04.2016?

C. On the facts and circumstances of the case and in law Ld.CIT (A) erred in holding that the interest income of Rs.1,61,20,972/- earned by the assessee Cooperative Society from fixed deposits kept with various cooperative banks was allowable as deduction u/s 80P(2)(d) of the IT Act, ignoring the decision of Hon’ble High Court of Karnataka in case of PCIT Vs. The Totgars Co-operative Sale Society (2017) 395 ITR 611 dated 16.06.2017?

D. On the facts and circumstances of the case and in law, Ld.CIT(A) erred in relying upon the decision of the Co-ordinate Bench of the Tribu