PRABHADEVI SHIVALIK CHS LIMITED,MUMBAI vs. THE INCOME TAX OFFICER, CIRCLE 22(1), MUMBAI, MUMBAI

These four appeals filed by the assessee are directed against the separate orders passed by the learned Commissioner of Income-tax (Appeals) under section 250 of the Income-tax Act, 1961 (“the Act”), arising from orders passed under section 154 of the Act, for the assessment years 2007-08, 2008-09, 2013-14 and 2018-19. Since common issues arise out of identical facts, these appeals were heard together and are being disposed of by this consolidated order. ITA No. 5629/Mum/2026 for A.Y. 2007-08 is taken as the lead appeal.

The effective grounds raised by the assessee in these appeals are that the learned CIT(A) erred in confirming the denial of deduction under section 80P(2)(d) in respect of interest received from The Maharashtra State Co-operative Bank and, for the assessment years 2007-08, 2008- 09 and 2013-14, deduction of Rs. 50,000 under section 80P(2)(c) in respect of income attributable to letting out the terrace for installation of telecommunication equipment. The year-wise claims are as under:

Briefly stated, the assessee is a co-operative housing society registered under the Maharashtra Co-operative Societies Act, 1960. It placed its surplus funds with The Maharashtra State Co-operative Bank and earned interest therefrom. In the first three assessment years, the assessee had also let out its terrace to telecom operators. The deductions 2

The learned Authorised Representative submitted that both issues are squarely covered by the decision of the co-ordinate bench in Abhinav Nagar Co-operative Housing Society Ltd. v. ITO, ITA No. 2593/Mum/2024, order dated 19.08.2024. It was submitted that The Maharashtra State Co-operative Bank is registered as a co-operative society and, therefore, interest derived from fixed deposits made with it is deductible under section 80P(2)(d). Reliance was also placed on The Chitrapur Co-operative Housing Society Ltd vs ITO Circle 19(3), Piramal Chamber Mumbai in ITA 9139 & 9140/Mum/2025. In respect of section 80P(2)(c)(ii), it was submitted that the deduction of Rs. 50,000 is a fixed deduction available to a co-operative society falling outside clauses (a) and (b) and reliance was also placed on Baroda Citizen Community Co- op Credit Society Ltd vs The ITO ward 1(2)(2) Vadodara dated 1.12.2021.

The learned Departmental Representative relied upon the orders of the lower authorities and submitted that a co-operative bank is excluded by section 80P(4). With regard to section 80P(2)(c), it was submitted that the rental receipts were income from other sources and not profits and gains from business.

We have heard the rival submissions and perused the material available on record. The first issue concerns interest derived from deposits with The Maharashtra State Co-operative Bank. Section 80P(2)(d) grants deduction in respect of the whole of any income by way of interest or dividends derived by a co-operative society from its investments with any other co-operative society. The exclusion in section 3

In Abhinav Nagar Co-operative Housing Society Ltd. (supra), the co-ordinate bench considered an identical claim of a co-operative housing society in respect of interest received from co-operative banks. After distinguishing Totgar’s Co-operative Sale Society Ltd. v. ITO (2010) 322 ITR 283 (SC), the bench held as under:

The facts before us are materially identical. The assessee is a co- operative society and the interest was derived from fixed deposits placed with The Maharashtra State Co-operative Bank, which continues to be a co-operative society notwithstanding section 80P(4). Respectfully following Abhinav Nagar Co-operative Housing Society Ltd. (supra), we direct the Assessing Officer to allow the deduction under section 80P(2)(d) in all four assessment years in the amounts stated in paragraph 2 above.

We now take up the deduction under section 80P(2)(c)(ii). This issue also stands directly covered by Abhinav Nagar Co-operative Housing

The assessee is a co-operative housing society and is not shown to fall within clauses (a) or (b) of section 80P(2). Further, the income in question is derived from the activity of permitting telecom operators to use the society’s terrace for installation of telecommunication equipment. Respectfully following Abhinav Nagar Co-operative Housing Society Ltd. (supra), we direct the Assessing Officer to allow deduction of Rs. 50,000 under section 80P(2)(c)(ii) for A.Ys. 2007-08, 2008-09 and 2013-14.

The grounds relating to the consequential tax demand do not require separate adjudication. The Assessing Officer shall recompute the income and demand, if any, after giving effect to the deductions allowed above.

In the result, all four appeals filed by the assessee are allowed.