KAI FAKIRA JAIRAM PATIL SAHAKARI PATSANSTHA MARYADIT SHAHADA,NANDURBAR vs. ITO, WARD-1, DHULE, DHULE

3 ITA No.3110/PUN/2025 considering the reply and submissions of the assessee, Ld. CIT(A)/NFAC dismissed the appeal filed by the assessee. 4. It is the above order against which the assessee is in appeal before this Tribunal. 5. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book & written submission furnished by the assessee. In this regard, we find that the assessee has raised as many as 27 grounds of appeal before us which includes legal grounds, as well as, grounds related to merits of the case. 6. In this regard, we find that time and again it has been held by various coordinate benches of this Tribunal that a primary credit cooperative society is entitled to claim deduction u/s 80P(2)(a)(i) of the IT Act with regard to its banking business income and also entitled to claim deduction u/s 80P(2)(d) of the IT Act with regard to interest income earned on its investments from other cooperative banks, which are also cooperative societies. It has also been held that interest earned from other nationalised/private banks also qualifies for deduction u/s 80P(2)(a)(i) of the IT Act being banking business income of the assesse. We also find that in the case of assessee itself a coordinate bench of this Tribunal in ITA No.551,

4 ITA No.3110/PUN/2025 552 & 553/PUN/2023 order dated 26-05-2023 has already allowed deduction u/s 80P2(a)(i) of the IT Act with regard to banking business income & also with regard to interest income earned from investments with other banks & cooperative banks. Accordingly, the issues involved in this appeal are no more res integra except the legal grounds raised by the assessee, therefore, we proceed to decide the appeal on merits of the case and the legal grounds raised by the assessee are left open. 7. With regard to addition of Rs.3,06,54,818/- on account of disallowance of deduction u/s 80P(2)(a)(i) of the IT Act, we find that the Assessing Officer has disallowed the above amount on the ground that the transactions of Rs.3,06,54,818/- were entered into with non-members and therefore does not qualify for deduction u/s 80P(2)(a)(i) of the IT Act. In this regard, we find that the amount of Rs.3,06,54,818/- was neither debited nor credited to profit & loss account for the year under consideration, and it was not part of any deduction claimed u/s 80P(2)(a)(i) of the IT Act. Therefore, there was no occasion with the Assessing Officer to disallow the above transaction in the name of disallowance of deduction u/s 80P(2)(a)(i) of the IT Act. However, we find that the Assessing Officer added this amount in the income of the assessee on the

5 ITA No.3110/PUN/2025 ground that these transactions were done by non-members. In this regard, we find that in Maharashtra State Cooperative Societies Act, there is no distinction between members & nominal members & the income, if any, derived from transactions with them qualifies for deduction u/s 80P(2)(a)((i) of the IT Act. In this regard, we find support from a coordinate bench decision passed in the case of Yuvashakti Nagari Sahkari Path Sanstha Maryadit in ITA No.476/PUN/2023 order dated 08-06-2023 wherein the Tribunal decided the identical issue of deduction u/s 80P(2) of the IT Act with regard to income from member & non-member/nominal member in favour of assesse by relying on various judgements including judgement of Hon’ble Jurisdictional High Court in Jalgaon District Central Cooperative Bank Ltd. vs. Union of India (2004) 134 Taxman 1 (Bom) by observing as under :- “3. Briefly stated, the facts of the case are that the assessee is a cooperative credit society engaged in the business of providing credits facilities to its members. During the year under consideration, the assessee received interest income of Rs.36,20,022/- from its nominal members and claimed the same as deductible u/s.80P. The AO did not allow the deduction on the net interest income of Rs.3,90,600/-, which action came to be countenanced in the first appeal. Aggrieved thereby, the assessee has come up in appeal before the Tribunal. 4. I have heard the rival submissions and gone through the relevant material on record. It is seen that the extant issue of granting deduction on the interest income received from nominal members is no more res integra in view of several orders passed by the Tribunal holding the same in favour of the assessee. The Tribunal in The Vainganga Nagari Sahakari Pat Sanstha Ltd. Vs. ITO (ITA No.49/Nag/2020) has decided the issue in favour of the assessee by its

6 ITA No.3110/PUN/2025 order dt. 21-06-2021. The relevant discussion has been made in Para Nos.4 and 5 of the order, relevant parts of which are reproduced as under : “4. We have heard the rival submissions through Virtual Court and scanned through the relevant material on record. The assessee Cooperative society is admittedly engaged in carrying on the business of banking and providing credit facilities. Section 80P(2)(a)(i) provides that in the case of co-operative society engaged in carrying on the business of banking or providing credit facilities to its members, the whole of the amount of profits and gains of business attributable to such activities shall be deductible in the computation of total income. The claim of assessee for deduction has been negated by the authorities below on the ground that it had admitted certain Members, described as ‘Nominal Members’, who were neither entitled to dividend nor voting rights. It is relevant to note that the term ‘Member’ has been defined u/s 2(19) in the Maharashtra Act to mean: “a person joining in an application for the registration of a Co-operative society which is subsequently registered, or a person duly admitted to membership of a society after registration and includes a nominal, associate or sympathizer member”. On going through the above definition of ‘Member’, it becomes overt that the term ‘Member’ also includes a Nominal Member. Once it is accepted that the assessee, governed by the Maharashtra Act, made advances to certain Nominal Members from whom interest income was earned, there can be no doubt whatsoever that the deduction u/s 80P(2)(a)(i) has to be allowed. The Department has heavily relied on the judgment of Hon'ble Supreme Court in the case of Citizen Co-operative Society Ltd. vs. ACIT (supra). That was a case in which Andhra Pradesh Mutually Aided Co- operative Society Act, 1995 was under consideration, which did not admit `Nominal Member’ within the ambit of the term ‘Member’. Recently, the Hon'ble Supreme Court in Mavilayi Service Co-Operative Bank Ltd. vs. CIT (2021) 123 taxmann.com 161 (SC) considered its earlier judgment in Citizen Cooperative Society Ltd. vs. ACIT (supra) vide para 46 of its order. Taking note of the fact that the Citizen Co- operative Society Ltd. vs. ACIT (supra) judgment dealt with the Andhra Act wherein the term ‘Member’ did not include Nominal Member, the Hon'ble Supreme Court in Mavilayi Service (supra) held that the interest on loans given to Nominal Members under the Kerala Act was eligible u/s 80P(2)(a)(i) of the Act as the term ‘Member’ under the Kerala Act included ‘Nominal Members’. In view of the foregoing discussion, it is evident that when the loans are given to Nominal Members and the relevant State Act includes, ‘Nominal Member’ purview of

7 ITA No.3110/PUN/2025 ‘Member’, there can be no question of denial of benefit u/s 80P(2)(a)(i). 5. Adverting to the facts of the instant case, we find that the provisions of the Kerala Act and the Maharashtra Act, in so far as the term `Member’ including `Nominal member’ is concerned, are similar. The Hon’ble jurisdictional High Court in Jalgaon District Central Cooperative Bank Ltd. VS. Union of India (2004) 134 Taxman 1 (Bom) has held that the definition of `member’ given in section 2(19) of the Maharashtra Act takes within its sweep even a nominal member and there is no distinction between a duly registered member and nominal member. In view of the above discussion, we overturn the impugned order and direct to grant deduction u/s 80P(2)(a)(i), as claimed by the assessee. 5. Following the precedent, I allow this ground of appeal raised by the assessee.” 8. In this regard, we find that in the above decision of Yuvashakti Nagari Sahkari Path Sanstha Maryadit (supra) coordinate bench of this Tribunal followed judgement of Hon’ble Bombay High Court in the case of Jalgaon District Central Cooperative Bank Ltd. (2004) 134 Taxman 1 (Bom) wherein it was held that as per section 2(19) of the Maharashtra Co-operative Societies Act, member includes a nominal/sympathizer/associate member and there is no distinction made between duly registered member and nominal/sympathizer/associate member and hence the society is eligible for deduction u/s 80P(2) of the IT Act. 9. Respectfully following above decision passed by coordinate bench of this Tribunal in the case of Yuvashakti Nagari Sahkari Path Sanstha Maryadi (supra), we are of the considered opinion

8 ITA No.3110/PUN/2025 that the assessee primary credit cooperative society is entitled for deduction u/s 80P(2)(a)(i) of the IT Act on the income resulting with transactions made with non-members/nominal members. Accordingly, we set-aside the order passed by Ld. CIT(A)/NFAC on this issue and direct the Assessing Officer to delete the addition of Rs.3,06,54,818/-. Thus, the grounds raised by the assessee relating to above addition of Rs.3,06,54,818/- are allowed. 10. With regard to addition of Rs.71,57,601/- on account of disallowance of deduction u/s 80P(2)(a)(i)/80P(2)(d) of the IT Act, we find that the Assessing Officer has disallowed the above amount by relying on the judgement passed in the case of Totagar’s Cooperative Sales Society Ltd. and also on the ground that the cooperative banks are not entitled to claim deduction u/s 80P(2)(a)(i)/80P(2)(d) of the IT Act in the light of section 80P(4) of the IT Act and also on the ground that the assessee society has not furnished any details with regard to the fact that the interest income is received from cooperative societies. Ld. CIT(A)/NFAC also confirmed the above disallowance by placing reliance on the judgement passed in the case of Totagar’s Cooperative Sales Society Ltd.

9 ITA No.3110/PUN/2025 11. In this regard, we find that in a number of decisions passed by coordinate benches of this Tribunal, it has been held that interest income earned from its investments with other cooperative banks, who are also cooperative society, is eligible for deduction u/s 80P(2)(d) of the IT Act. Regarding this we find support from decision passed in the case of Marathwada Krishi Vidyapeeth Karmachari Sahkari Patsanstha Ltd. vs. PCIT-1, Aurangabad in ITA No.102/PUN/2020 and others order dated 21.12.2022 wherein the Tribunal on identical issue allowed the appeals filed by various assessees in a common order by observing as under :- “4. Succinctly, the facts common in all these cases are that the assesses filed returns claiming deduction u/s.80P in respect of interest income which was allowed by the respective AOs. The ld. PCIT(s) invoked the jurisdiction u/s 263 of the Act and disputed the allowability of the claim of deduction u/s.80P(2)(a)(i) in some cases and under 80P(2)(d) in others, thereby holding the assessment orders to be erroneous and prejudicial to the interest of the Revenue. Aggrieved thereby, the assessees have approached the Tribunal. 5. We have heard the rival submissions and gone through the relevant material on record. It is seen that all the cases are based on the ld. PCIT(s)’ understanding that the allowing of the deduction by the AO(s) u/s 80P is contrary to law. Insofar as the allowability of deduction u/s.8P(2)(a)(i) is concerned, we find that the Pune Tribunal 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 Society Ltd. Vs. CIT (2014) 110 DTR 89

10 ITA No.3110/PUN/2025 (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. We thus hold that no exception can be taken to the granting of deduction on interest income by the AO u/s 80P(2)(a)(i) of the Act. 6. Coming to the other cases involving deduction u/s.80P(2)(d) of the Act, it is crystal clear from the language of the provision 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 cooperative society registered under the Co-operative Societies Act, 1912 or under any law for the time being in force. The assessees are also Co-operative society registered under the Act and hence qualify for the grant of the deduction. Similar view has been taken by the Pune Tribunal in several cases including The Sesa Goa Employees Coop. Credit Society Ltd. Vs. ACIT (ITA No.203/PUN/2019) vide order dated 16- 11-2022). 7. In view of the foregoing, we hold that the impugned orders questioning the deduction u/s.80P(2)(a)(i)/80P(2)(d) in respect of interest income, cannot be sustained. 8. In the result, all the appeals are allowed.” 12. Respectfully following above decision passed in the case of Marathwada Krishi Vidyapeeth Karmachari Sahkari Patsanstha Ltd. (supra), we are of the considered opinion that the assessee primary credit cooperative society is entitled for deduction u/s

11 ITA No.3110/PUN/2025 80P(2)(d) of the IT Act with regard to interest income earned from its investments with other cooperative societies. 13. It is also the grievance of the assessee that the interest income earned from other banks, the assessee credit cooperative society is entitled for deduction u/s 80P(2)(a)(i) of the IT Act. We are in agreement with the above argument of the assessee & find support from another decision passed in the case of Chhatrapati Nagri Sahkari Patsanstha M. vs. ITO in ITA No.1919/PUN/2025 order dated 18.12.2025 wherein the Tribunal allowed the deduction u/s 80P(2)(a)(i) of the IT Act with regard to interest income earned from other banks (which are not cooperative societies) and allowed the appeal of the assessee by observing as under :- “5. It is an admitted position that Assessee is a Credit Cooperative Society. It is also admitted position that Assessee had claimed deduction u/s.80P(2)(a)(i) of the Act. Assessee has earned interest income of Rs.19,73,718/- from ICICI Bank Limited and HDFC Bank Limited on the funds which were kept with these banks as the funds were not immediately required. 6. Now, the issue before us is whether assessee is eligible for deduction under section 80P(2)(a) of the Act or not! 6.1 The Hon’ble High Court of Andhra Pradesh and Telangana in the case of Vavveru Co-operative Rural Bank Ltd. [2017] 396 ITR 371 analysed the provisions of Section 80P, succinctly distinguished the decision of Hon’ble Supreme Court in the case of Totagars Cooperative Sale Society, and held as under : Quote,“8. Therefore, the real controversy arising in these writ petitions is as to whether the income derived by the petitioners by way of interest on the fixed deposits made by them with the banks, is to be treated as profits and gains of business attributable to any one of the activities indicated in sub-clauses (i) to (vii) of clause (a) of sub-section (2) of section 80P or not.

12 ITA No.3110/PUN/2025 9. While the petitioners place strong reliance upon a decision of the Division Bench of this court in CIT v. Andhra Pradesh State Cooperative Bank Ltd. [2011] 12 taxmann.com 66/200 Taxman 200/336 ITR 516, the Revenue places strong reliance upon the decision of the Supreme Court in Totgar's Co-operative Sale Society Ltd. v. ITO [2010] 188 Taxman 282/322 ITR 283. …………………… 34. The case before the Supreme Court in Totgar's Co- operative Sale Society Ltd.'s case (supra) was in respect of a co-operative credit society, which was also marketing the agricultural produce of its members. As seen from the facts disclosed in the decision of the Karnataka High Court in Totgars, from out of which the decision of the Supreme Court arose, the assessee was carrying on the business of marketing agricultural produce of the members of the society. It is also found from paragraph-3 of the decision of the Karnataka High Court in Totgar's Co-operative Sale Society Ltd.'s case (supra) that the business activity other than marketing of the agricultural produce actually resulted in net loss to the society. Therefore, it appears that the assessee in Totgars was carrying on some of the activities listed in clause (a) along with other activities. This is perhaps the reason that the assessee did not pay to its members the proceeds of the sale of their produce, but invested the same in banks. As a consequence, the investments were shown as liabilities, as they represented the money belonging to the members. The income derived from the investments made by retaining the monies belonging to the members cannot certainly be termed as profits and gains of business. This is why Totgar's struck a different note. 35. But, as rightly contended by the learned senior counsel for the petitioners, the investment made by the petitioners in fixed deposits in nationalised banks, were of their own monies. If the petitioners had invested those amounts in fixed deposits in other co-operative societies or in the construction of godowns and warehouses, the respondents would have granted the benefit of deduction under clause (d) or (e), as the case may be. 36. The original source of the investments made by the petitioners in nationalised banks is admittedly the income that the petitioners derived from the activities listed in sub-clauses (i) to (vii) of clause (a). The character of such income may not be lost, especially when the statute uses the expression "attributable to" and not any one of the two expressions, namely, "derived from" or "directly attributable to". 37. Therefore, we are of the considered view that the petitioners are entitled to succeed. Hence, the writ petitions are allowed, and the order of the Assessing Officer, in so far as it relates to

13 ITA No.3110/PUN/2025 treating the interest income as something not allowable as a deduction under section 80P(2)(a), is set aside.”Unquote. 6.2 Thus, the Hon’ble High Court of AP & TS held that Interest Income earned by investing Income derived from Business of providing credit facilities, Loans by a Co-Operative Society was eligible for deduction u/sec.80P(2)(a) of the Act. 7. In the case of Sahyadri Co-operative Credit Society Limited, the Sahyadri Co-operative Credit Society had deposited excess funds in the Banks or Institutions permitted by the Co-operative Societies Act. In that context, the Hon’ble Kerala High Court in the case of Pr.CIT Vs. Sahyadri Co-operative Credit Society Ltd., [2024] 301 Taxman 36 (Kerala) vide order dated 04.09.2024 has held as under : Quote “7. On a consideration of the rival submissions, we are of the view that for the reasons stated hereinafter, the question of law that arises for consideration before us must be answered against the Revenue and in favour of the assessee. The permissible deduction that is envisaged under Section 80P(2) of the I.T. Act for a Co-operative Society that is assessed to tax under the head of 'Profits and Gains of Business or Profession' is of the whole of the amount of profits and gains of business attributable to any one or more of its activities. Thus, all amounts as can be attributable to the conduct of the specified businesses by a Co-operative Society will be eligible for the deduction envisaged under the statutory provision. The question that arises therefore is whether, merely because the assessee chooses to deposit its surplus profit in a permitted bank or financial institution, and earns interest on such deposits, such interest would cease to form part of its profits and gains attributable to its business of providing credit facilities to its members? In our view that question must be answered in the negative, since we cannot accept the contention of the Revenue that the interest earned on those deposits loses its character as profits/gains attributable to the main business of the assessee. It is not as though the assessee in the instant case had used the surplus amount [the profit earned by it] for an investment or activity that was unrelated to its main business, and earned additional income by way of interest or gain through such activity. The assessee had only deposited the profit earned by it in the manner mandated under Section 63 of the Multi-State Cooperative Societies Act, or permitted by Section 64 of the said Act. In other words, it dealt with the surplus profit in a manner envisaged under the regulatory Statute that regulated, and thereby legitimized, its business of providing credit facilities to its members. Under those circumstances, if the assessee managed to earn some additional income by way of interest on the deposits made, it could only be seen as an enhancement of the profits and gains that it made from its

14 ITA No.3110/PUN/2025 principal activity of providing credit facilities to its members. The nature and character of the principal income [profits earned by the assessee from its lending activity] does not change merely because the assessee acted in a prudent manner by depositing that income in a bank, instead of keeping it in hand. The provisions of the I.T. Act cannot be seen as intended to discourage prudent financial conduct on the part of an assessee.” Unquote 7.1 Thus, even Hon’ble Kerala High Court has held that the character of income does not change. The Hon’ble Kerala High Court held that interest earned from deposits in permitted banks will be eligible for deduction u/s.80P of the Act. The Hon’ble Kerala High Court’s decision is dated 04.09.2024 means, after the decision of Hon’ble Supreme Court in the case of Totagar’s Co.operative Sales Society Ltd. 7.2 Accordingly, we hold that assessee is eligible for deduction u/s.80P of the Act, on the interest income earned by the assessee from Co-operative Banks and ICICI Bank, HDFC Bank. 8. Ld.Departmental Representative(ld.DR) for the Revenue has not brought on record any contrary decision of the Hon’ble Jurisdictional High Court. 9. Respectfully following the judicial precedent, we direct the Assessing Officer to allow deduction u/sec.80P(2)(a)(i) of the Act on the interest earned. Accordingly, Grounds of appeal raised by the assessee are allowed. 10. In the result, appeal of the assessee is allowed.” 14. We further find that in assessee’s own case for assessment year 2017-18, 2018-19 and for assessment year 2020-21 a coordinate bench of this Tribunal in ITA Nos.551, 552 & 553/PUN/2023 order dated 26-05-2023 has already allowed the deduction claimed u/s 80P(2)(a)(i) of the IT Act with regard to interest income earned on its investments from cooperative banks, nationalised banks and private banks by observing as under :- 2. Briefly, the facts of the case are that the appellant is a cooperative credit society registered under Maharashtra Co-operative

15 ITA No.3110/PUN/2025 Societies Act, 1960. The Return of Income for the assessment year 2018-19 was filed on 08.09.2018 disclosing total income of Rs.Nil after claiming deduction u/s 80P(2)(a)(i) of the Income Tax Act, 1961 (‘the Act’) of Rs.78,15,971/-. Against the said return of income, the assessment was completed by the Assessing Officer vide order dated 15.02.2021 passed u/s 143(3) r.w.s. 143(3A) & 143(3B) of the Act at a total income of Rs.42,09,784/-. While doing so, the Assessing Officer denied the exemption u/s 80P(2)(a)(i) in respect of interest income on deposits made out of the surplus funds in cooperative banks and scheduled banks on the ground that the said income does not qualify for deduction u/s 80P(2)(a)(i) or 80P(2)(d) of the Act. 3. Being aggrieved, an appeal was filed before the NFAC, who vide impugned order confirmed the addition made by the Assessing Officer. 4. Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal. 5. When the appeal was called on, none appeared on behalf of the assessee despite due service of notice of hearing. 6. I heard the ld. Sr. DR and perused the material on record. The only issue in the present case is as to the allowability of exemption under the provisions of section 80P(2)(d) in respect of interest income earned by a cooperative society from the cooperative bank. There is a cleavage of judicial opinion among several High Courts on the issue of eligibility of this kind of income for exemption u/s. 80P(2)(a)(i) of the Act. The Hon’ble Punjab & Haryana High Court in the case of CIT vs. Punjab State Cooperative Federation of Housing Building Societies Ltd. 11 taxmann.com 448, the Hon’ble Gujarat High Court in the case of State Bank of India Vs. CIT 389 ITR 578 (Guj.), the Hon’ble Delhi High Court in the case of Mantola Co-operative Thrift & Credit Society Ltd. Vs. CIT 50 taxmann.com 278, the Hon’ble Punjab & Haryana High Court in the case of CIT Vs. Punjab State Cooperative Agricultural Development Bank Ltd. 389 ITR 68 and the Hon’ble Kolkata High Court in the case of CIT Vs. Southern Eastern Employees Cooperative Credit Society Ltd. 390 ITR 524 took a view that the income arising on the surplus invested in short term deposits and securities cannot be attributed to the activities of the society and, therefore, not eligible for exemption u/s.80P(2)(a)(i) of the Act. However, the Hon’ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO (2015) 230 taxmann 309 (Kar.) and the Hon’ble Telangana and Hon’ble Andhra Pradesh High Court in the case of Vaveru Co-operative Rural Bank Ltd. v CIT [(2017) 396 ITR 371 took a view that such interest income is attributable to the activities of the society and, therefore, eligible for exemption u/s 80P(2)(a)(i) of the Act. Similar view has been taken by the Hon’ble Calcutta High Court in the case of PCIT vs. Gunja Samabay Krishi Unnayan Samity Ltd., 147 taxmann.com 518 (Calcutta) and the Hon’ble Madras High Court in the case of Chennai

16 ITA No.3110/PUN/2025 Central Co-operative Bank Ltd. vs. ITO, 148 taxmann.com 17 (Madras). The Coordinate Bench of Pune Benches in the case of M/s. Ratnatray Gramin Bigar Sheti Sah. Pat Sanstha Maryadit Vs. ITO (ITA Nos.559/560/PUN/2018, dated 11-12-2018) taken view in favour of the assessee following the judgment of Hon’ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. (supra). Respectfully following the decision of the Coordinate Bench of the Tribunal, I am of the considered opinion that the interest income earned on fixed deposits with cooperative bank/scheduled bank partakes character of the business income, which is eligible for deduction u/s 80P(2)(a)(i) of the Act. Thus, the grounds of appeal filed by the assessee stand allowed. 7. In the result, the appeal filed by the assessee stands allowed.” 15. We further find that in assessee’s own case for assessment year 2022-23 vide order dated 30.03.2024 regular assessment order u/s 143(3) of the IT Act was passed and the Assessing Officer was pleased to allow deduction u/s 80P(2)(a)(i) of the IT Act with regard to interest income earned from cooperative and other banks and accepted the income returned by the assessee. 16. Considering the totality of the facts of the case and in view of our above discussion and respectfully following decisions passed by coordinate bench of this Tribunal in the assessee’s own case and also following the decision passed by coordinate bench of this Tribunal in the case of Chhatrapati Nagri Sahkari Patsanstha M. (supra) and also in the light of the fact that no adverse material was brought on record by Ld. DR on the issue in hand, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC and direct the Assessing Officer to delete the addition of

17 ITA No.3110/PUN/2025 Rs.71,57,601/- by allowing the deduction u/s 80P(2)(d) of the IT Act with regard to interest income earned from its investments with other cooperative banks & u/s 80P(2)(a)(i) of the Act with regard to interest income earned from other banks (which are not cooperative societies). Thus, the grounds raised by the assessee with regard to addition of Rs.71,57,60/- are allowed. 17. Since we have adjudicated the appeal of the assessee on merits of the case and allowed the appeal in favour of the assessee, the legal grounds raised by the assessee becomes academic hence left open. 18. In the result, the appeal filed by the assessee is allowed. Order pronounced on this 17th day of April, 2026. Sd/- Sd/- (R. K. PANDA) (VINAY BHAMORE) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; �दनांक / Dated : 17th April, 2026. Sujeet/DOC आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Pr. CIT concerned. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “A” ब�च, 4. पुणे / DR, ITAT, “A” Bench, Pune. गाड� फ़ाइल / Guard File. 5. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.