JAGDAMBA GRAMIN BIGAR KRUSHI SAHKARI PATSANSTHA MARYADIT AMADAPUR,BULDANA vs. INCOME TAX OFFICER WARD-1, KHAMGAON, KHAMGAON

PDF · subscribers
ITA 620/NAG/2025Status: DisposedITAT Nagpur02 September 2026AY 2018-193 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 income earned from investments in cooperative banks qualifies for deduction under Section 80P(2)(d) of the Act, as cooperative banks are fundamentally cooperative societies. The Assessing Officer's denial of this deduction was reversed.

What were the facts?

The assessee, a credit cooperative society, claimed a deduction of Rs. 35,07,684/- under Section 80P of the Income Tax Act for interest income earned from investments held with cooperative banks. The Assessing Officer denied this deduction.

What were the issues?

Whether interest income earned by a cooperative society from investments in cooperative banks is eligible for deduction under Section 80P(2)(d) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 80P,Section 80P(2)(a)(i),Section 80P(2)(d),Section 143(3),Section 143(3A),Section 143(3B),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, NAGPUR SMC BENCH, NAGPUR

Before: SHRI MANISH BORAD

For Appellant: Shri K.P. Dewani, Advocate
For Respondent: Shri Shiv Shankar Yadav, Sr.DR
Hearing: 06/08/2026Pronounced: 02/09/2026

This appeal by the assessee is directed against the order of Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi (for short, “CIT(A)”) dated30.09.2025 passed u/sec. 250 of the Income Tax Act, 1961 (for short, “Act”) which is arising out of assessment order dated 20.03.2021 passed u/sec. 143(3) r.w.s. 143(3A) & 143(3B) of the Act for the Assessment Year (A.Y.) 2018-19.

2.

The sole grievance of the assessee is against the denial of deduction amounting to Rs. 35,07,684/- claimed u/sec. 80P(2)(a)(i) / 80P(2)(d) of the Act.

3.

I have heard the rival submissions and perused the material placed before me and also gone through the various

2 ITA No.620/PUN/2025 (Jagdamba Gramin Bigar Krushi Sahkari Patsanstha Maryadit Amadapur) decisions relied on by the learned counsel for the assessee in the paper book running into 54 pages. I observe that assessee, a credit cooperative society, is engaged in providing credit facilities to its members. Return of income for A.Y. 2018-19 filed on 30.10.2018 declaring NIL income after claiming deduction u/sec. 80P of the Act at Rs. 35,07,684/-. Case selected for scrutiny through CASS and after validly serving statutory notices u/sec. 143(2) & 142(1) of the Act, assessment proceedings were carried out. Submissions filed by the assessee were considered. However, the benefit of deduction u/sec. 80P(2)(d) of the Act was not allowed for the interest income earned from investments held with cooperative banks. On perusal of paper book at page No.61, I find that the gross interest income received by the assessee during the year includes interest income from cooperative banks at Rs. 55.31 lacs. The correctness of this amount of interest earned from cooperative banks has not been disputed by the lower authorities. Now, whether assessee is eligible for deduction u/sec. 80P(2)(d) of the Act for the interest earned from cooperative banks, has been adjudicated by various coordinate Benches including this Tribunal in plethora of decisions consistently holding that the cooperative banks are fundamentally cooperative societies. Investment with cooperative/scheduled banks are made for maintaining liquidity norms as well as to maintain normal liquidity for funds and also to fetch optimum return on the investments and such claim u/sec. 80P(2)(d) of the Act has been allowed. Therefore, the issue remains no longer res-integra that the interest earned from investments held with cooperative banks also qualifies for deduction u/sec. 80P(2)(d) of the Act. I find support from the decisions of this Tribunal in the case of The Ismailia Urban Cooperative Society vs. ITO in ITA No. 122/NAG/2023, dated 18.06.2024 and Bharti Maind Nagri Sahakari Pat Sanstha at

3 ITA No.620/PUN/2025 (Jagdamba Gramin Bigar Krushi Sahkari Patsanstha Maryadit Amadapur) Moti Nagar vs. ITO in ITA Nos. 159 & 160/NAG/2023, dt. 08.08.2024 and various other decisions referred in the paper book. Respectfully following the same, I am inclined to hold that assessee’s claim of deduction u/sec. 80P(2)(d) of the Act at Rs. 35,07,684/- deserves to be allowed. Finding of Ld.CIT(A) is reversed and the effective grounds of appeal challenging the deduction u/sec. 80P(2)(d) of the Act are hereby allowed. Other grounds of appeal being alternative and consequential in nature, needs no adjudication.

4.

In the result, appeal of the assessee is allowed.

Order pronounced on 02nd September, 2026 under Rule 34(5) of the Income Tax (Appellate Tribunal) Rules, 1963

Sd/- (MANISH BORAD) ACCOUNTANT MEMBER Pune & Dated : 02nd Sept., 2026 vr/- Copy of the Order forwarded to: 1. Assessee 2. Revenue 3. PCIT concerned. 4. DR, ITAT, “SMC” Bench, Nagpur. 5. Guard File

BY ORDER //True Copy// Senior Private Secretary ITAT, Nagpur

More judgments on Section 80P

All 5,069 judgments and leading authorities on Section 80P →

Recent GST High Court judgments

Search GST case law →