RADHAKRISHNA NAGARI SAHAKARI PAT SANSTHA LIMITED,AT POST - MALKAPUR, DISTRICT - BULDHANA vs. THE INCOME-TAX OFFICER, WARD - 2, KHAMGAON, KHAMGAON

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ITA 299/NAG/2026Status: DisposedITAT Nagpur31 July 2026AY 2018-194 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 deduction under Section 80P(2)(a)(i) is available for interest earned from both cooperative and non-cooperative banks if the investments were made for business necessity and commercial expediency. The CIT(A)'s finding was reversed.

What were the facts?

The assessee, a Credit Co-operative Society, claimed deduction under Section 80P(2)(a) for interest earned on investments with Nationalized Banks. The Assessing Officer disallowed this deduction, treating the interest as income from other sources, and the CIT(A) upheld this disallowance.

What were the issues?

Whether interest earned on investments made with nationalized banks by a credit co-operative society is eligible for deduction under Section 80P(2)(a) when made for commercial expediency.

Which sections of the Income-tax Act were involved?

Section 80P(2)(a),Section 144,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SMC BENCH,

Before: Dr. MANISH BORAD

For Appellant: Shri Sanjeev Mutha, CA
For Respondent: Shri Abhay Shende, SR, DR (Virtual)
Hearing: 31.07.2026Pronounced: 06.08.2026

आयकर अपीलीय अधिकरण " एस एम सी "न्यायपीठ नागपुर में । IN THE INCOME TAX APPELLATE TRIBUNAL "SMC" BENCH, NAGPUR BEFORE Dr. MANISH BORAD, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.299/NAG/2026 ननिाारण वर्ा / Assessment Year: 2018-19 Vs Income Tax Radhakrishna Nagari Sahakari Pat Sanstha Officer, Ward-2, Limited, Khamgaon Radhakrushna, Near S.B.I.A.D.B. Branch, Buldhana Road, At post- Malkapur, Buldhana- 443101 Maharashtra PAN-AAATR7656R Appellant Respondent

Assessee by : Shri Sanjeev Mutha, CA (Virtual) Revenue by : Shri Abhay Shende, SR DR (Virtual) Date of hearing : 31.07.2026 Date of pronouncement : 06.08.2026 आदेश/ORDER PER DR. MANISH BORAD, AM :

This appeal at the instance of assessee is directed against the order passed by Ld. CIT(A), NFAC, Delhi u/s 250 of the Income-tax Act, 1961 dated 09.03.2026 which is arising out of the Assessment Order passed u/s. 144 r.w.s 250 of the IT Act dated 29.12.2025. 2 2. Assessee has raised following grounds of appeal:-

1.

On the basis of facts, in the circumstances of the case and as per law, the CIT (A) is not justified in not granting deduction of Rs. 4,08,732/-u/s. 80P(2)(a) of the Act in respect of interest earned on investments kept with Nationalized Banks, particularly when the said investments were made on account of commercial expediency and business necessity.

2.

On the basis of facts, in the circumstances of the case and as per law, without prejudice to the claim of deduction u/s. 80P(2) of the Act, the CIT (A) is not justified in non-granting the deduction of Rs. 50,000/-u/s. 80P(2)(c)(ii) of the Act.

3.

The appellant craves for the addition to, deletion, alteration, modification of the above grounds of appeal. The effective grounds of appeal raised is against the denial of deduction u/s 80P(2)(a) of the Act at Rs. 4,08,732/- in respect of interest earned on investment held with Nationalised Banks made on account of commercial expediency and business necessity.

4.

I have heard rival contentions and perused the records placed before me. The assessee is a Credit Co-operative Society and for the A.Y. 2018- 19, in the assessment proceedings framed u/s 144 r.w.s. 250 of the Act, Ld. Assessing Officer (AO) disallowed the deduction u/s 80P(2)(a)(i) of the Act for the interest income received from nationalised banks at Rs. 4,08,732/- and treated it as income from other sources. Assessee failed to get any relief from Ld. CIT(A). I find that the decision referred by Ld. Counsel for the assesse in the case of Banganga Nagri Sahakari Patsanstha maryadit Vs. ITO (ITA No. 1788-1789/PUN/2025) dated

20.01.2026 is squarely applicable on the facts of the instant case as it has been held that in the case of credit co-operative societies, deduction u/s 80P(2)(a)(i) is available for the interest earned from co-operative as well as non-cooperative banks for the investment made for business necessity and commercial expediencies. In absence of any contrary judicial precedence referred by Ld. Sr. Departmental Representative (DR), I respectfully following the decision referred above allow the ground No. 1 of the appeal raised by the assesse and delete the disallowances of deduction u/s 80P(2)(a) of the Act at Rs. 4,08,732/- Finding of Ld. CIT(A) is reversed and ground of appeal No. 1 is allowed.

5.

Ground No. 2 being alternative ground becomes infructuous as ground No. 1 is allowed, ground No. 3 is general in nature which needs no adjudication.

6.

In the result, the appeal of the assessee is allowed as per terms indicated herein above.

Order pronounced on this 06th day of August, 2026. (MANISH BORAD) ACCOUNTANT MEMBER

पुणे /Pune; दिन ांक /Dated: 06th August, 2026. Neeta Neeta Milind Digitally signed by Neeta Milind Shirsath Shirsath Date: 2026.08.11 15:20:28 +05'30' आदेश की प्रनिललपप अग्रेपर्ि /Copy of the Order forwarded to: 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. पवभागीय प्रनिननधि, आयकर अपीलीय अधिकरण, "एस एम सी" बेंच, नागपुर/ DR, ITAT, "SMC" Bench, Nagpur 5. गार्ा फाइल/ Guard File.

आदेशानुसार / BY ORDER,

सहायक रजिस्ट्रार/

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