VIVIDHODDESHA PRATHAMIKA GRAMEENA KRUSHI SAHAKARI SANGHA NIYAMIT,KATGAL vs. INCOME TAX OFFICER, WARD -2, KARWAR, KARWAR

PDF · subscribers
ITA 390/PAN/2025Status: DisposedITAT Panaji01 June 2026AY 2020-215 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 by a co-operative society from investments/deposits with co-operative banks is eligible for deduction under Section 80P(2)(d) of the Act. This is because co-operative banks are essentially co-operative societies.

What were the facts?

The assessee, a primary agricultural co-operative society, claimed deduction under Section 80P(2)(d) for interest income earned from investments held with co-operative banks. The Assessing Officer and CIT(A) disallowed this claim.

What were the issues?

Whether interest income earned by a co-operative society from its investments in co-operative banks is eligible for deduction under Section 80P(2)(d) of the Income-tax Act, 1961.

Which sections of the Income-tax Act were involved?

Section 80P(2)(d)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DB BENCH, PANAJI

Before: Dr. MANISH BORAD & SHRI PAVAN KUMAR GADALE

For Appellant: Shri Subramanya Bhat
For Respondent: Smt. Rijula Uniyal-Sr, DR (Virtual)
Hearing: 22.05.2025

आयकर अपीलीय अधिकरण "डीबी" न्यायपीठ पणजी में । IN THE INCOME TAX APPELLATE TRIBUNAL "DB" BENCH, PANAJI BEFORE Dr. MANISH BORAD, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.390 & 391/PAN/2025 नििाारण वर्ा / Assessment Year: 2020-2021 Vs Income Vividhoddesha Tax Prathamika Grameena Officer, Ward- Krushi Sahakari Sangha 2, Karwar Niyamit, Katgal Society Building Main Road, Katgal, Kumta, Uttara Kannada- 581362 Karnataka PAN-AAAAU6077E Appellant Respondent

Assessee by : Shri Subramanya Bhat (Virtual) Revenue by : Smt. Rijula Uniyal-Sr. DR (Virtual) Date of hearing : 22.05.2025 Date of : 01.06.2026 pronouncement आदेश/ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : These two appeals at the instance of assessee are directed against the order passed by Ld. Commissioner of Income Tax (Appeals) CIT(A)/National faceless Appeals Centre(NFAC) u/s 250 of the Income-tax Act, 1961 dated 05.09.2025 which are arising out of the Assessment Order passed u/s.143(3) dated 19.09.2022.

2.

The common grievance of the assesse is that Ld. CIT(A) erred in not allowing the deduction claimed u/s 80P(2)(d) of the Act for

2 ITA No.390 & 391/PAN/2025 the interest income earned from investments held with Co-operative Banks.

3.

At the outset the Ld. counsel for the assessee submitted that the issue stands squarely covered by plethora of decisions of the Hon’ble Tribunal consistently holding that income earned by the Co- operative Societies from investments/deposits held with Co-operative Banks is also eligible for deduction u/s 80P(2)(d) of the Act. Reliance placed on the decisions mentioned in the Paper Book running into 132 pages and copies of decisions placed from page No. 87-132.

4.

On the other hand Ld. Departmental Representative (DR) vehemently argued supporting the order of Ld. CIT(A).

5.

We have heard rival contentions and perused the record placed before us. The claim of the assesse which is a primary Agricultural Co-operative Society is that the interest income at Rs. 13,03,722/- and Rs. 16,28,809/- for A.Y. 2020-21 and A.Y. 2017-18 respectively from interest earned from investments/deposits held with Co- operative Banks is eligible for deduction u/s 80P(2)(d) of the Act.

ITA No. 2985/PUN/2025 dated 03.02.2026

6.

The issue under consideration is no longer res integra by virtue of catena of decisions taking consistent view that interest income earned from deposits with Co-operative Banks is eligible for deduction u/s 80P(2)(d) of the Act. Recently, this Bench in the case of Annapurna Nagari Sahkari Pathsanstha Maryadit Yawal Vs. ITO in ITA No. 313/PUN/2025, order dated 07.05.2025 has allowed the deduction claimed by the appellant u/s 80P(2)(d) of the Act observing as under: "5. We have heard the rival submissions and perused the record placed before us. There is no dispute to the fact that appellant has Rs. 1,02,95,103/- from deposits/investments with

3 ITA No.390 & 391/PAN/2025 Cooperative Banks. This fact has been accepted by the Assessing Officer in the assessment order also. Admittedly, appellant has not filed the requisite details before Ld.CIT(A). We however considering the fact that the issue regarding allowability of deduction u/s.80P(2)(d) of the Act for the interest earned from Cooperative Banks is no longer res integra as the very same issue has been decided by this Tribunal in catena of decisions and in assesse's own case for A.Y. 2020-21 holding that the appellant is eligible for deduction u/s.80P(2)(d) of the Act as the Cooperative Banks are basically Cooperative Societies. For the sake of brevity, the finding given in ITA No.2471/PUN/2024 is reproduced below:

"7. We have heard both the sides and perused the record placed before us. In the instant case, the Assessing Officer disallowed the interest income of Rs.1,63,98,998/ earned out of the Fixed deposits/Investments made with Cooperative Banks treating the same as Income from Other Source. Ld.CIT(A) dismissed the appeal in limine without discussing anything on merits of the issues and on the ground that the appellant has not provided plausible explanation for admission of additional evidences.

8.

Section 80P(2)(d) of the Act provides that the sum received in respect of any income by way of interest or dividend derived by Cooperative Society from its investment with any other Cooperative Society, the whole of such income is eligible for deduction u/s.80P of the Act. we find that this issue is no more res integra as the Coordinate Benches of this Tribunal has been consistently holding that the interest income earned out of the FDs/Investments kept with Cooperative Banks is allowable u/s.80P(2)(d) of the Act. We find that this Tribunal in case of Kolhapur District Central Co-op. Bank Kanista Sevakanchi Sahakar Pat Sanstha Ltd., Vs. IMO in ITA No. 1365/PUN/2023, dated

4 ITA No.390 & 391/PAN/2025 01.01.2024 dealing with similar issue after placing reliance on another decision of this Tribunal in the case of The Ugar Sugar Works Kamgar & Dr. Shirgaokar Shaikshanik Trust Nokar Co-op Credit Society US. ITO in ITA No.84/PAN/2018, dated 27.05.2022 has held that the interest earned from deposits with Cooperative Banks are also eligible for deduction u/s.80P(2)(d) of the Act as Cooperative Banks are basically Cooperative Societies only but have turned into Bank on getting necessary banking license.

9.

Respectfully following the above referred decisions taking consistent view along with considering the facts of the case, where the appellant made investment with the Cooperative Banks we hold that the appellant is eligible for deduction u/s.80P(2)(d) of the Act for the interest income earned from Cooperative Banks at Rs. 1,63,98,998/-. Findings of the ld. CIT(A) is set-aside and the Assessing Officer is directed to allow the claim made by the appellant. Effective grounds of appeal raised by the appellant are allowed."

6.

Respectfully following the same, we hold that deduction of Rs. 1,02,95,103/u/s.80P(2)(d) of the Act claimed by the appellant on the interest earned from deposits/Investments with Cooperative Banks deserves to be allowed. Relevant finding of ld.CIT(A) on merits is set aside and grounds of appeal No.5 to 8 raised by the appellant are allowed."

7.

In the light of the above decision and other judicial precedents consistently followed by this Tribunal, I hold that the assessee is eligible for deduction u/s 80P(2)(d) of the Act for the interest income of Rs. 13,03,722/- and Rs. 16,28,809/- earned from the investments held with Co-operative Banks. Accordingly the common issues raised by the assessee claiming deduction u/s 80P(2)(d) of the Act are allowed.

5 ITA No.390 & 391/PAN/2025

8.

So far as alternate grounds/contentions are concerned, as we have already allowed the common ground claiming deduction u/s 80P(2)(d) of the Act dealing with the alternate contentions would be merely academic in nature and therefore held to be infructuous. In the result both the appeals of the assesse vide ITA No. 390/PAN/2025 and ITA 391/PAN/2025 are allowed.

9.

In the result, both the appeals of the assessee are allowed.

Order pronounced on this 01st day of June, 2026.

Sd/- Sd/- (PAVAN KUMAR GADALE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/ Pune; दििांक / Dated: 01st June, 2026. Neeta Digitally signed by Neeta Milind Neeta Milind Shirsath Shirsath Date: 2026.06.18 16:16:31 +05'30' आिेश की प्रनिललपप अग्रेपर्ि / Copy of the Order forwarded to: 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. पवभागीय प्रनिनिधि, आयकर अपीलीय अधिकरण, "डीबी" बेंच, पणजी / DR, ITAT, "DB" Bench, Panaji. 5. गाडा फाइल / Guard File.

आिेशािुसार / BY ORDER,

Assistant Registrar आयकर अपीलीय अधिकरण, पणजी / ITAT, Panaji

More judgments on Section 80P(2)(d)

All 2,440 judgments and leading authorities on Section 80P(2)(d) →

Recent GST High Court judgments

Search GST case law →