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Income Tax Appellate Tribunal, SMC BENCH, PUNE
Before: SHRI R.S. SYAL
आदेश / ORDER
PER R.S. SYAL, VP:
This appeal by the assessee arises out of the order
dated 17-03-2023 passed by the CIT(A) in National Faceless Appeal
Centre, Delhi u/s.250 of the Income-tax Act, 1961 (hereinafter also
called ‘the Act’) in relation to the assessment year 2018-19.
The only issue raised in this appeal is against the denial of
deduction u/s.80P of the Act in relation to the interest income earned
from Cooperative banks and also Nationalised banks.
2 ITA No. 487/PUN/2023 Shri Bhagwant Sahakari Nagari Patsanstha Maryadit Barshi
Briefly stated, the facts of the case, are that the assessee society
claimed deduction u/s.80P on net interest income of Rs.25,84,235/-
after reducing the expenses from the gross amount of interest earned
from banks at Rs.70,26,932/-. The Assessing Officer (AO) denied the
deduction which was countenanced in the first appeal.
I have heard both the sides and gone through the relevant
material on record. It is seen that the question is of granting deduction
u/s 80P of the Act on interest income earned from various cooperative
banks as well as Nationalised Banks. The extant issue is no more res
integra in view of the catena of decisions delivered by the Pune
Benches. The Pune Bench in Rena Sahakari Sakhar Karkhana Ltd.
Vs. Pr.CIT (ITA No.1249/PUN/2018) has held, vide its order dated 07-
01-2022, that though co-operative banks, other than primary
agricultural credit society or a primary co-operative agricultural and
rural development bank, are not eligible for deduction pursuant to
insertion of section 80P(4) w.e.f. 1.4.2007, but this provision does not
dent the otherwise eligibility u/s 80P(2)(d) of the Act of a co-operative
society on interest income on investments/deposits parked with a co-
operative bank, which is a registered co-operative society as per
section 2(19) of the Act, defining co-operative society to mean a co-
3 ITA No. 487/PUN/2023 Shri Bhagwant Sahakari Nagari Patsanstha Maryadit Barshi
operative society registered under the Co-operative Societies Act,
1912 or under any law for the time being in force. The payer of
interest is also a Co-operative society registered under the Cooperative
Societies Act. Respectfully following the decision of the Division
Bench, I overturn the impugned order and direct to grant deduction
u/s.80P(2)(d) of the Act on the amount of interest earned from various
cooperative banks.
As far as the allowability of deduction u/s.8P(2)(a)(i) on the
interest income earned from the deposits kept with Nationalized banks
is concerned, I find the Pune Benches in Sureshdada Jain Nagari
Sahakari Patsanstha Maryadit Vs. The Pr.CIT (ITA
No.713/PUN/2016) has decided the question of availability of
deduction u/s 80P on interest income by noticing that the Pune Bench
in an earlier case of Shri Laxmi Narayan Nagari Sahakari Pat Sanstha
Maryadit Vs. ITO (ITA No.604/PN/2014) has allowed similar
deduction. In the said case, the Tribunal discussed the contrary views
expressed by the Hon’ble Karnataka High Court in Tumkur Merchants
Souharda Credit Cooperative Ltd. Vs. ITO (2015) 230 Taxman 309
(Kar.) allowing deduction u/s. 80P on interest income and that of the
Hon’ble Delhi High Court in Mantola Cooperative Thrift Credit
4 ITA No. 487/PUN/2023 Shri Bhagwant Sahakari Nagari Patsanstha Maryadit Barshi
Society Ltd. Vs. CIT (2014) 110 DTR 89 (Delhi) not allowing
deduction u/s.80P on interest income earned from banks. Both the
Hon’ble High Courts took into consideration the ratio laid down in the
case of Totgar’s Cooperative Sale Society Ltd. (supra). No direct
judgment from the Hon’ble jurisdictional High Court on the point
having been pointed out, the Tribunal in Shri Laxmi Narayan Nagari
Sahakari Pat Sanstha Maryadit (supra) preferred to go with the view
in favour of the assessee by the Hon’ble Karnataka High Court in the
case of Tumkur Merchants Souharda Credit Cooperative Ltd. (supra).
The position continues to remain the same before this Tribunal also.
Respectfully following the precedent, the impugned order is
overturned and the interest income earned from the deposits kept with
nationalised bank is also allowed as deduction u/s.80P(2)(a)(i) of the
Act.
In the result, the appeal is allowed. Order pronounced in the Open Court on 19th May, 2023.
Sd/- (R.S.SYAL) VICE PRESIDENT पुणे Pune; िदनांक Dated : 19th May, 2023 सतीश
5 ITA No. 487/PUN/2023 Shri Bhagwant Sahakari Nagari Patsanstha Maryadit Barshi
आदेश की �ितिलिप अ�ेिषत/Copy of the Order is forwarded to: अपीलाथ� / The Appellant; 1. ��थ� / The Respondent 2. 3. The Pr.CIT concerned 4. DR, ITAT, ‘SMC’ Bench, Pune गाड� फाईल / Guard file. 5.
आदेशानुसार/ BY ORDER,
// True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune
Date 1. Draft dictated on 18-05-2023 Sr.PS 2. Draft placed before author 19-05-2023 Sr.PS 3. Draft proposed & placed before JM the second member 4. Draft discussed/approved by JM Second Member. 5. Approved Draft comes to the Sr.PS Sr.PS/PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *