MAKER TOWER F PREMISES CO OPERATIVE SOCIETY LIMITED,MUMBAI vs. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE 17(1), MUMBAI, MUMBAI

PER SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER: This appeal is filed by the assessee against the order of the learned CIT(A)-NFAC, Delhi, dated 25.02.2026 for the assessment year 2022-23 in denying deduction claimed u/s 80P(2)(d) of the Act in respect of interest income earned from cooperative banks.

ITA 3913/MUM/2026 MAKER TOWER F PREMISES CO OPERATIVE SOCIETY LIMITED 2. Learned Counsel for the assessee, at the outset, submitted that the issue in appeal is squarely covered by the decision of the coordinate bench in assessee's own case for the assessment years 2014-15, 2015-16, 2017-18, and 2021-22. A copy of the order of the Tribunal for the assessment years 2017-18 and 2021-22 in ITAs No. 3852/Mum/2024 and 1362/Mum/2024, dated 30.09.2024 and 25.07.2024 respectively, was placed on record.

“9. In the present case, there is no dispute that the assessee is a Co- Operative Housing Society. Thus, if any income as referred to in sub- section (2) to section 80P of the Act is included in the gross total income of the assessee, the same shall be allowed as a deduction. At this stage, it is pertinent to note that since the assessee is registered under the Maharashtra Co-operative Societies Act, 1960, it is required to invest or deposit its funds in one of the modes provided in section 70 of the aforesaid Act, which includes investment or deposit of funds in the District Central Co-operative Bank or the State Co-operative Bank. 2

ITA 3913/MUM/2026 MAKER TOWER F PREMISES CO OPERATIVE SOCIETY LIMITED Accordingly, the assessee kept the deposits in Co- operative Banks registered under the Maharashtra Co-operative Societies Act and earned interest, which was claimed as a deduction under section 80P(2)(d) of the Act. 10. In the present case, the learned JCIT(A) has not disputed that the Co- operative Banks are Co-operative Societies for the purpose of section 80P(2)(d) of the Act, and has also allowed the deduction in respect of interest income received from fixed deposits in the Co- operative Banks under section 80P(2)(d) of the Act. However, the learned JCIT(A) did not extent the same benefit in respect of interest income received on saving accounts maintained with the Co-operative Banks on the basis that there is a basic difference between interest on investments and interest on saving banks, and section 802(d) of the Act only covers the former. From a careful perusal of the provisions of section 80P(2)(d) of the Act, we find that the term "investment" has not been qualified to be only the investment in the fixed deposits. Thus, from the provisions of section 80P(2)(d) of the Act, it is evident that the same includes interest derived from all investments with any other Co- operative Society, including Co-operative Banks. We find that while dealing with a similar issue, the Co-ordinate Bench of the Tribunal in Punjab State Federation of Co- operative House Building Societies Ltd Vs. ITO, [1982] 2 ITD 617 (Chd.), after considering the meaning of the word "investment" held that the section 80P(2)(d) of the Act also covers interest income from saving accounts. The relevant findings of the Co- ordinate Bench, in the aforesaid decision, are reproduced as follows: - "4. We have heard the parties and we are inclined to accept the claim of the assessee for the following reasons. 5. The fact that the assessee as well as the bank with which the deposits were placed are co-operative societies is not controverted. Insofar as the meaning of the word 'investment' is concerned, we do not have any help from the definitions given in the statute itself. The learned counsel for the assessee has relied upon the meaning of the word 'investment' found in the Chambers Twentieth Century Dictionary as any placing of money to secure income or profit. We also find that the word 'invest' (in the investment clause in a will) has been interpreted to mean, inter alia, to apply money in the purchase of some property from which interest or profile is expected, and which property is purchased in order to be held for the sake of the income which it will yield: Stroud's Dictionary, 4th edition, p. 1419. 3

ITA 3913/MUM/2026 MAKER TOWER F PREMISES CO OPERATIVE SOCIETY LIMITED 6. The savings bank account which the assessee had opened has to be understood in contrast to what the assessee could have done by placing the money in the current account. In the savings bank account, there are restrictions on withdrawals. For example, rule 6 of the Savings Bank Rule regarding deposits, stipulates that a depositor may withdraw money from his account not more than 12 times a month. The very name of the account is savings account and, therefore, by implication it is for the purpose of earning interest on savings. In our opinion. the narrow interpretation given by the authorities below to deny the assessee deduction under section 80P(2)(d) is not justified. We, therefore, reverse their orders and direct that the said amount of interest be treated as exempt under section 80P(2)(d) for the year under appeal. 11. We find that the learned JCIT(A), though referred to the aforesaid decision, however, disregarded the same on the basis that the same is very old, without distinguishing the same on facts or on law. Further, we find no merits in the reliance placed by the learned JCIT(A) upon the provisions of section 194A of the Act, in order to hold that the provisions of the Act differentiate interest on investment and interest on saving accounts, as the provisions of section 194A of the Act does not create any such distinction, and requires TDS to be deducted at the time of payment/credit of interest to the account of the payee, provided other conditions as laid down in the section are satisfied. Therefore, we are of the considered view that the assessee is also entitled to claim deduction under section 80P(2)(d) of the Act on the interest income received on saving accounts maintained with the Co-operative Banks. Accordingly, to this extent the impugned order passed by the learned JCIT(A) is set aside, and the Assessing Officer ("AO") is directed to allow deduction of Rs.4,84,525/- being the interest income received on saving accounts maintained with the Co-operative Banks under section 80P(2)(d) of the Act. As a result, the sole ground raised by the assessee is allowed.” 5. Similarly, the coordinate bench of the Tribunal in ITA No. 3852/Mum/2024, dated 30.09.2024 for the assessment year 2017-18, following the decision of the coordinate bench in assessee's own case for the assessment year 2021-22 in ITA No. 1362/Mum/2024, dated 25.07.2024, allowed the claim for

ITA 3913/MUM/2026 MAKER TOWER F PREMISES CO OPERATIVE SOCIETY LIMITED deduction u/s 80P(2)(d) in respect of interest income earned from cooperative banks.

Order pronounced in the open court on 21/08/2026

Sd/- Sd/- MAKARAND VASANT MAHADEOKAR CHALLA NAGENDRA PRASAD ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 21/08/2026 Prabhat

ITA 3913/MUM/2026 MAKER TOWER F PREMISES CO OPERATIVE SOCIETY LIMITED

Copy to: MAKER TOWER F PREMISES CO OPERATIVE SOCIETY LIMITED, 56, MAKER ARCADE, MAKER TOWER F, 1 G.D.SOMANI ROAD, COLABA S.O, MUMBAI-400005, MAHARASHTRA

DEPUTY COMMISSIONER OF INCOME- TAX, CIRCLE 17(1), MUMBAI, 2 CIRCLE 17(1), KAUTILYA BHAVAN, MUMBAI-400051, MAHARASHTRA

3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAI BENCH 5 GUARD FILE