RAJARSHI SHAHU MULTISTATE COOPERATIVE CREDIT SOCIETY LIMITED,BULDHANA vs. ITO WARD-2, KHAMGOAN

The sole grievance of the assessee relates to disallowance of deduction u/s.80P of the Act at Rs.21,73,229/- for the interest income from the investments held with Cooperative Banks/Nationalized banks.

At the outset, ld. Counsel for the assessee submitted that the issues raised in the instant appeal is squarely covered by the decision of this Tribunal in assessee’s own case for A.Y.

I have heard the rival contentions and perused the record placed before me. I note that the assessee is a Cooperative Society and in the assessment proceedings u/s.143(3) r.w.s.144B of the Act for A.Y. 2022-23 deduction u/s.80P(2)(a)(i) of the Act has been denied at Rs.21,73,229/-. I note that the alleged interest income is not earned from the loans given to the Members but has earned from the investments/balances held with Cooperative Banks/Nationalized banks. It has been consistently held that the interest earned from Investments held with Cooperative Banks is allowable as deduction u/s.80P of the Act as the Cooperative Banks are basically Cooperative Societies. In the case of credit Cooperative Societies the interest earned from Cooperative Banks/Nationalized banks are treated at par as income from banking business and as part of the credit facility business. I note that in assessee’s own case for A.Y. 2018-19 similar issue has been adjudicated by this Tribunal and the copy of the order is placed at pages 1 to 8 of the paper book and this Tribunal following the decision of Coordinate Bench in the assessee’s own case has allowed the claim of deduction u/s.80P(2)(a)(i) of the Act for such type of interest earned from Cooperative Banks/Nationalized banks. Following the same parity of reasoning, I direct the Assessing Officer to allow the deduction claimed by the assessee u/s.80P(2)(a)(i) of the Act. Finding of ld.CIT(A) is reversed and the effective grounds of appeal raised by the assessee are allowed.

In the result, the appeal of the assessee is allowed.

The Pr. CIT concerned. विभ गीय प्रतितनधि, आयकर अपीलीय अधिकरण, न गपुर SMC बेंच, 4. न गपुर / DR, ITAT, “Nagpur SMC Bench, Nagpur ग र्ड फ़ इल / Guard File. 5. आदेशानुसार / BY ORDER,