SHREE VIJAYA RESIDENCY CO-OP-HSG. SCO. LTD.,MUMBAI vs. CIT, DELHI

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ITA 1993/MUM/2023Status: DisposedITAT Mumbai27 September 2023AY 2017-184 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 interest earned by a cooperative society from its investments with a cooperative bank is eligible for deduction under Section 80P(2)(d). The Tribunal distinguished the Supreme Court's decision, stating it pertained to deductions under Section 80P(2)(a)(i) or (iii), not (d).

What were the facts?

The assessee, a Cooperative Housing Society, claimed a deduction of Rs. 18,78,388/- under Section 80P(2)(d) for interest earned from investments made with cooperative banks. The Assessing Officer disallowed this claim, citing the Supreme Court's decision in Totgar's Co-operative Sale Society Ltd. and the insertion of Section 80P(4).

What were the issues?

Whether interest income earned by a cooperative society from its investments with a cooperative bank is deductible under Section 80P(2)(d), despite the provisions of Section 80P(4) and the Supreme Court's decision in Totgar's case.

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

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Before: SHRI AMARJIT SINGH

Hearing: 06.09.2023Pronounced: 27.09.2023

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 231.03.2023 for A.Y. 2017- 18. The assesse has raised the following grounds before us: “1. The Learned CIT Appeals erred in confirming the disallowance of Rs.18,78,388/- claimed by the Appellant on the ground that the matter u/s. 80P(2)(d) is covered by Hon'ble Supreme Court's decision, in the case of Totgar's Co-operative Sale Society Ltd Vs ITO [2010] 322 ITR 283 (SC) as held by the Learned Assessing Officer

1.

2. The Learned CIT Appeals erred in considering the fact that the Hon'ble Supreme Court's decision, in the case of Totgar's Co- operative Sale Society Ltd Vs ITO [2010] 322 ITR 283 (SC) is distinguished and is fully covered by the decision of Income Tax P a g e | Shree Vijaya Residency Coop Housing Society Ltd. Vs. ITO 20(3)(3) Appellate Tribunal "D" Bench, Mumbai in the case of Mittal Court Premises Co. Op Society Ltd v/s ITO-17(2)(1) in to 1537/Mum/2022 that the Hon'ble Supreme Court decision pertains to the allowability of deductions claimable u/s 80P(2)(a)(i) or 80P(2)(a)(iii), whereas Appellant's claim is with respect to deductions u/s. 80P(2)(d) of the Act.

3.

The Learned CIT Appeals erred in confirming the additions made by the Learned Assessing Officer on the ground that section 80P(4) of the Act distinguishes the co- operative banks from co-operative societies.

4.

The appellant crave leave to add, alter or delete any of the grounds of appeal.”

2. Fact in brief is that assessee is a Cooperative Housing Society and filed return of income for the assessment year under consideration declaring total income of Rs.3,26,270/- on 08.01.2018. The ld. AO also mentioned that vide Finance Act 2006, deduction of income for Co-operative Banks as per provision of section 80P of the Act has been withdrawn by way of insertion of sec. 80P(4) of the Act w.e.f. 01.04.2007. The AO stated that interest earned from the investment made with the Co-operative Bank by the assessee Co- operative Society is not entitled for deduction u/s 80P(2)(d) of the Act. Vide order u/s 154 r.w.s 143(3) of the Act dated 21.12.2019 the assessing officer has disallowed the claim of deduction of the assessee society made u/s 80P(2)(d) of the Act in respect of interest earned from the deposit maintained with the cooperative society.

3. Aggrieved, the assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assesse. 4. Heard both the sides and perused the material on record. The assesse is a cooperative Housing Society registered under the Maharashtra Cooperative Society Act 1960. The assessee has claimed deduction of Rs.18,78,388/- u/s 80P(2)(d) of the Act being interest received from investment made with Shamrao Vittal P a g e | Shree Vijaya Residency Coop Housing Society Ltd. Vs. ITO 20(3)(3) Cooperative Bank & Saraswat Cooperative Bank. On similar issues and identical facts the coordinate benches of the ITAT have held that interest derived by a cooperative society from its investment with a cooperative Bank is entitled for claim of deduction u/s 80P(2)(d) of the Act. 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: “1. Abhinav Nagar Co-op. Hsg. Soc Ltd. Vs. AO,CPC, Vide & 2565/Mum/2022. 2. Bhag Coop Housing Society Ltd. Vs. Asst. CIT, CPC vide ITA No. 1972/Mum/2022. 3. Samapan A & B Wing Co-operative Housing Society Ltd. Vide ITA No. 2121/Mum/2022. 4. Sumer Nagar Co-operative Housing Society Ltd. Vs. ITO, Ward 32(3)(4) vide ITA No. 1239/Mum/2022. 5. ACIT, Circle 23(3) Vs. The Salsette Catholic Co-operative Housing Society vide ITA Nos. 3870 & 3871/Mum/2019.”

In the case of Kaliandas Udyog Bhavan Premises Coop. Society Ltd. Vs. ITO vide dated 25.04.2018 it is held that though the cooperative bank pursuant to the insertion of subsection (4) of Sec. 80P is no more be entitled for claim of deduction u/s 80P of the Act, but however, as a cooperative bank continued to be a cooperative society registered under the Cooperative Society Act, therefore, the interest income earned by a cooperative society from its investment held that cooperative bank would be entitled for claim of deduction u/s 80P(2)(d), therefore, we direct the AO to allow the claim of deduction to the assesse in respect of interest earned from investment made with the cooperative bank, Therefore, the appeal of the assesse is allowed.

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