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Facts
The assessee claimed a deduction of Rs. 6,09,346/- under Section 80P(2)(d) on account of interest received from three cooperative banks. The CPC disallowed this deduction, and the assessee appealed against the CIT(A)'s order upholding the disallowance.
Held
The Tribunal held that cooperative banks are primarily cooperative societies and interest earned from them is eligible for deduction under Section 80P(2)(d), citing various High Court and Tribunal decisions. The AO was directed to verify the interest component and allow relief.
Key Issues
Whether interest income received by the assessee from cooperative banks is eligible for deduction under Section 80P(2)(d) of the Income Tax Act.
Sections Cited
80P(2)(d), 254(1)
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PER PAWAN SINGH, JUDICIAL MEMBER;
This appeal by the assessee is directed against the order passed by the CIT(A)
dated 13.03.2025 for assessment year (A.Y.) 2021-22. Though, the assessee has raised multiple grounds of appeal, however, in my considered view, the substantial ground of appeal raised by them relates to disallowance under section 80P(2)(d)of Rs.6,09,346/.
3. The rival submissions of both the parties have been heard and record perused. The learned authorised representative (ld.AR) of the assessee submits that the assessee claimed deduction of Rs. 6,09,346/-under section 80P(2)(d) of the Act on account of interest received from three different co- operative banks. The assessee received interest from Mumbai District Central Cooperative Bank, Maharashtra State Cooperative bank, TJSB Sahakari Bank Limited and Union Bank of India. All such interest is shown in the computation of total income. The assessee has claimed deduction under section 80P(2)(d) of interest Mumbai District Central Cooperative Bank, Maharashtra State Cooperative bank, TJSB Sahakari Bank Limited only. The return was processed by Central Processing Centre (CPC) vide intimation dated 19.10.202 and made adjustment/ disallowed such deduction. The figure of claim/ deduction under section 80P(2)(d) is mentioned in para-12 of page No.2 of order or CPC. The ld. AR of the assessee submits that in a series of decision by this bench, it has been consistently held that co-operative banks are primarily a co-operative society and the interest received from such co-operative bank are eligible for deduction under section 80P(2)(d) to support its submission. At the time of hearing, the ld AR of the assessee was asked to show the bifurcation of such interest income from all three cooperative bank. The ld AR of the assessee submist that is can be verify by assessing officer.To support his submissions, the ld AR of the assessee relied on the decision of Tribunal in Land Ends CHS Ltd Vs ITO (ITA no. 3566/Mum/2024), Sea Green Cooperative Housing Society Vs ITO (ITA No. 1342/Mum/2017 and ITO Vs MIG Co-operative Society (ITA No. 7327/Mum/2019).
On the other hand, learned senior departmental representative (Sr.DR) for the Revenue supported the order of lower authorities.
We have considered the submissions of both the parties and have gone through the orders of lower authorities. We find that grounds of appeal
raised by the assessee is in fact covered by a series of decision by this Bench as well as other Co-ordinate Benches of Tribunal wherein it has been consistently held that Co-operative Banks are primarily co-operative society and the interest or dividend earned from such Co-operative Bank are eligible for deduction under section 80P(2)(d). Similar View was taken by Gujarat High Court in Gujarat High Court in the case of Surat Vankar Sahakari Sangh Ltd. (2016) 72 taxmann.com 169; Allahabad High Court in the case of U.P. Cooperative Sugar Factories (2013) 17 taxmann.com 58; Punjab Haryana High Court in the case of Haryana Co-operative Sugar Mills Ltd. (1989)
46. Taxman 28 and Pune Tribunal in Niphad Nagari Sahakari Pata Sanstha Ltd. in and in CIT ITO V Sri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha (ITA No. 5006/2013)(Karnataka HC).
I find that the exact details of interest income from all three cooperative bank i.e. Mumbai District Central Cooperative Bank, Maharashtra State Cooperative bank, TJSB Sahakari Bank Limited is not discernible form the record, thus, the jurisdictional assessing officer is directed to verify the component of interest from all three cooperative bank and allow full relief to the assessee on the deduction under section 80P(2)(d) of the Act. Thus, the grounds of appeal raised by the assessee is allowed for statistical purpose.
In the result, the grounds of appeal raised by the assessee are allowed for statistical purpose.
Order pronounced in the open Court on 04/08/2025.