GUNDECHA GARDENS CO-OPERATIVE HOUSING SOCIETY LIMITED,MUMBAI vs. COMMISSIONER OF INCOME TAX (APPEAL), MUMBAI

The fact in brief is that assessee is a cooperative Housing Society and filed return of income for assessment year 2017-18 on 29.08.2017 showing total income of Rs.10,51,270/-. The case of the assessee was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued on 10.08.2018. During the course of assessment the assessing officer noticed that assessee received bank interest on fixed deposit from cooperative bank, Mumbai district Central Cooperative Bank to the amount of Rs.14,25,131/-. The assessee has also claimed deduction u/s 80P (2)(d) of the Act. On the aforesaid interest the assessing officer disallowed the claim of deduction u/s 80P(2)(d) of the Act on the ground that cooperative bank is a commercial bank and does not fall under the purview of a cooperative society.

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

Heard both the sides and perused the material on record. The assessee is a cooperative housing society registered under the P a g e | 3 Maharashtra Cooperative Society Act, 1960. The assessee has claimed deduction of Rs.14,75,131/- u/s 80P(2)(d) being interest received on the investment made with the cooperative bank. During the course of appellate proceedings before us the ld. Counsel has placed reliance on the various decision of ITAT, Mumbai wherein the claim of deduction u/s 80P(2)(d) was allowed on the interest income earned from the bank deposit with cooperative bank. (i) (vi) lands’ End Cooperative Housing Society Ltd. Vs. ITO 16(1)(3) (vii) M/s Palmera Cooperative Housing Society Ltd. Vs. ACIT, 19(2) With the assistance of ld. Representative we have gone through the decision of ITAT, Mumbai in the case of Kaliandas Udyog Bhavan Premises Co-op Society Ltd. Vs. ITO 21(2)(1) vide ITA No. 6547/Mum/2017, dated 25.04.2018 wherein it is held that though the cooperative bank pursuant to the insertion of sub-section (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 continues to be a cooperative society registered under the Cooperative Society Act, 1912 or under any other law for the time being in force in any state for the registration of cooperative societies, therefore, the interest income derived by a cooperative society from its investment held with a cooperative bank would be entitled for claim of deduction u/s 80P(2)(d) of the Act. Similarly, we consider other various decision of the ITAT, on the same issue referred above by the ld. Counsel wherein 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, therefore, we direct the A.O to allow the claim of the assesse in respect of interest earned from P a g e | 4 Place: Mumbai Date 17.03.2023 Rohit: PS