SUNSHINE HEIGHTS CO OP HOUSING SOCIETY LIMITED,MUMBAI vs. WARD 21(3)(4), MUMBAI

These two appeals by the assessee are directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] for Assessment Years 2016-17 and 2017-18, respectively. Both the impugned orders are of even date i.e. 27/03/2023.

Since the grounds of appeal and the facts germane to the grounds in both appeals are identical, these appeals are taken up together for adjudication and are decided by this common order.

Shri Ajay Wadke appearing on behalf of the assessee submits that the assessee is a Co-operative Housing Society and is registered under the Maharashtra State Co-operative Societies Registration Act, 1960. During the period relevant to assessment year under appeal the assessee earned interest income of Rs.15,48,405/- from deposits with the Co-operative Banks. The assessee claimed deduction u/s. 80P(2)(d) of the Act on the said income. During the course of assessment proceedings the Assessing Officer denied the benefit of deduction u/s. 80P(2)(d) of the Act to the assessee on the ground that as per the provisions of section 80P(2)(d) of the Act, the assessee should have earned interest income from Co-operative Society and not a Co-operative Bank, interest received by the assessee is from the Co-operative Banks which do no fall within the definition of Co-operative Society as defined u/s.2(19) of the Act. The Assessing Officer further placed reliance on the decision in the case of Totgars Co-operative Sale Society Limited vs.ITO. 188 taxmann.com 282(SC) to hold that interest earned on deposits with Bank would not be eligible for deduction u/s. 80P of the Act as the said interest income is taxable under the head “Income from other sources”. The ld. Authorized Representative of the assessee submitted that the Tribunal in various decisions has held that interest income received from deposits/investment with Co-operative Banks is eligible for deduction u/s. 80P(2)(d) of the Act . One of such decision by the Tribunal is in the case of Solitaire CHS Ltd. vs. PCIT in for Assessment Year 2014-15 decided on 29/11/2019.