RAHEJA GREEN CO-OPERATIVE HOUSING SOCIETY LIMITED,MUMBAI vs. INCOME TAX OFFICER, WARD 32(1)(4), MUMBAI

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ITA 1943/MUM/2023Status: DisposedITAT Mumbai28 September 2023AY 2017-20184 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that even though cooperative banks are excluded from the deduction under Section 80P due to Section 80P(4), they remain cooperative societies. Therefore, interest income earned by a cooperative society from investments in a cooperative bank is eligible for deduction under Section 80P(2)(d).

What were the facts?

The assessee, a cooperative housing society, claimed deduction under Section 80P(2)(d) for interest earned from deposits with cooperative banks. The Assessing Officer disallowed this claim, citing Section 80P(4) which excludes cooperative banks from being treated as cooperative societies for deduction purposes.

What were the issues?

Whether interest income earned by a cooperative society from investments in a cooperative bank is eligible for deduction under Section 80P(2)(d) of the Income Tax Act, despite the exclusion of cooperative banks by Section 80P(4).

Which sections of the Income-tax Act were involved?

Section 80P(2)(d),Section 80P(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Before: SHRI AMARJIT SINGH

Hearing: 04.09.2023Pronounced: 28.09.2023

आदेश / O R D E R Per Amarjit Singh (AM): This appeal filed by the assesse is directed against the order passed by the ld. CIT(A) NFAC, dated 28.03.2023 for A.Y. 2017- 18. The assesse has raised the following grounds before us: “(A) Disallowance of deduction u/s. 80P(2)(d) - Rs.17,64.209/-

1.

1. The learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) [CIT(A)] erred on facts and in law in upholding the order of the Income Tax Officer, Ward - 32(1)(4), Mumbai (AO) disallowing the appellant's claim of deduction u/s 80P(2)(d) amounting to Rs.17,64,209/- P a g e | 2 Raheja Green Co-operative Housing Society Ltd. Vs. ITO, Ward 32(1)(4) 2 The learned CIT(A) erred on facts and in law in upholding the disallowance made by the AO of the appellant's claim of deduction u/s 80P(2)(d) of Rs.17.64,209/- by interpreting section 80P(2)(d) to be eligible to income by way of interest or dividends derived by the co-operative society from its investments with any other co-operative society that is not a co-operative bank.

3.

The learned AO and CIT(A) failed to appreciate that the appellant had earned interest from co-operative banks which were co-operative societies and hence the appellant was entitled to deduction u/s 80P(2)(d) of Rs.17,64,209/-.

4.

The appellant prays that the disallowance made by the AO of the appellant's claim of deduction us. 80P(2)(d) of Rs.17,64,209/- and confirmed by the CIT(A), may be deleted. B) General 5. The above grounds of appeal

are without prejudice to one another and the appellant craves leave to add, alter, amend, delete or modify any of the above grounds of appeal.”

2. Fact in brief is that assesse is a cooperative Housing Society and filed its return of income for the assessment year on 11.03.2018 declaring total income of Rs.456,110/-. The case was subject to scrutiny assessment and assessment u/s 143(3) of the Act was finalised on 29.11.2019. The assessing officer has disallowed the claim of deduction made u/s 80P(2)(d) of the Act in respect of interest amount of Rs.17,64,209/- received from the deposit maintained with the Saraswat Cooperative Bank and SVC Cooperative Bank. The assessing officer was of the view that deduction u/s 80P(2)(d) cannot be given without fulfilling the conditions laid down u/s 80P(4) of the Act. The assessing officer stated that after insertion of subsection (4) of 80P the cooperative bank is not treated as a cooperative society and benefit of deduction u/s 80P cannot be given when there was investment in any Co-operative Bank.

3. Aggrieved, the assesse filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee.

P a g e | 3 Raheja Green Co-operative Housing Society Ltd. Vs. ITO, Ward 32(1)(4) 4. Heard both the sides and perused the material on record. The assessee is a cooperative society formed with the object of maintaining and attracting the builder occupied its members. Copy Pran Gold Coin case consider in the various decision of the ITAT Mumbai benches it is held that claim of deduction u/s 80P(2)(d) in respect of interest earned from investment made in the cooperative bank is allowable. Some of the decision of the ITAT wherein the claim of deduction u/s 80P(2)(d) was allowed on the interest income earned from deposit with cooperative bank are as under: (i) Mittal Park Cooperative Housing Society Ltd. Vs. Asst. Director of Income Tax, Mum, W(125) (95) CPC, Bengaluru, (Ld. ADIT). (ii) Mittal Park Cooperative Housing Society Vs. ITO, Ward 25 (3)(1), Mumbai (iii) Kaliandas Udyog Bhavan Premises Coop Society Ltd. Vs. ITO 21(1)(2). (iv) Aqua Cooperative Housing Society Limited Vs ITO 21(1)(2) (v) Sea Green Cooperative Housing Society Ltd. Vs. ITO 21(3)(2) (vi) lands’ End Cooperative Housing Society Ltd. Vs. ITO 16(1)(3) (vii) The Nutan Laxmi Chs Ltd. Mumbai Vs. ITO 19(2)(4) (viii) M/s Palmera Cooperative Housing Society Ltd. Vs. ACIT, 19(2)

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