SHREE GAJANAN SAHAKARI PATPEDHI LTD ,MUMBAI vs. ITO -22(3)(2), MUMBAI

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ITA 421/MUM/2025Status: DisposedITAT Mumbai27 March 2025AY 2017-18Bench: SHRI PAWAN SINGH, JUDICIAL MEMBER SHRI GIRISH AGRAWAL (Accountant Member)1 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 co-operative banks are primarily co-operative societies, and the interest or dividend income earned from them is eligible for deduction under section 80P(2)(d). The decisions relied upon by the AO were found not applicable to the present case.

What were the facts?

The assessee, Shree Gajanan Sahakari Patpedhi Ltd., claimed a deduction of Rs. 24,03,094/- under section 80P(2)(d) of the Income Tax Act for interest income received from co-operative banks. The Assessing Officer disallowed this deduction, relying on specific court decisions.

What were the issues?

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

Which sections of the Income-tax Act were involved?

Section 80P(2)(d),Section 250

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show list

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PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by the assessee is directed against the order passed by National Face less Appeal Centre (NFAC)/ the CIT(A), dated 11.11.2024 passed under section 250 of the Income Tax Act, 1961 (“the Act”) for the assessment year 2017-18. Though the assesse has raised multiple grounds of appeal. However, in our considered view the substantial grounds of appeal relate to deduction under section 80P(2)(d) of Rs.24,03,094/-.

2. Rhe rival submissions of both the parties have been heard and record perused. The learned authorised representative (ld.AR) of the assessee submits that while filing return of income, the assessee in its computation of total income claimed deduction of Rs.24,03,094/- under section 80P(2)(d) of the Act on account of interest received from (i) Maharashtra State Co-operative Bank Ltd., (ii) Mumbai District Central Co-operative Bank Ltd. and (iii) The Ajara Urban Co-operative Bank Ltd. The figure of interest income received from co- operative banks are not disputed by lower authorities. The AO disallowed such disallowance by referring / relying upon the decision of Hon’ble Apex Court in Totgars Co-operative Sale Society Ltd. vs. ITO, (2010) 188 Taxman 282 (SC) and Hon’ble Karnataka High Court in PCIT vs. Totagars Co-operative Sale Society (2017) 83 taxmann.com 140 (Karnataka). The ratio of decision relied upon by the AO is not applicable on the facts of the present case. It has been consistently held by various benches of Tribunal that co-operative banks are primarily co-operative society and the interest or dividend income earned from such co-operative bank are eligible for deduction under section 80P(2)(d). Hon’ble Allahabad High Court in CIT vs. U.P. Co-operative Sugar Factory, (2013) 37 taxmann.com 58 (Alld.) also held that where assessee a co-operative society received interest from another co-operative society / co-operative banks, deduction under section 80P(2)(d) would be available to assessee on net income from interest. The ld. AR for the assessee submits that similar view was taken by Hon’ble Punjab & Haryana High Court in CIT vs. Haryana Co- operative Sugar Mills, 180 ITR 631.

1.

Shree Gajanan Sahakari Patpedhi Ltd. 3. On the other hand, learned senior departmental representative (Sr.DR) for the Revenue supported the order of lower authorities. 4. We have considered the submissions of both the parties and have gone through the orders of lower authorities. We have also deliberated on various case laws relied upon by the learned AR of the assessee. 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). We find that Hon’ble Allahabad High Court in CIT vs. U.P. Co-operative Sugar Factory, (supra) also held that where assessee a co-operative society received interest from another co-operative society / co-operative banks, deduction under section 80P(2)(d) would be available to assessee on net income from interest. Similar view was taken by Hon’ble Punjab & Haryana High Court in CIT vs. Haryana Co-operative Sugar Mills(supra).No contrary facts or law is brought to our notice to take other view. Thus, the grounds of appeal raised by the assessee are allowed.

5. In the result, the grounds of appeal raised by the assessee are allowed. Order pronounced in the open Court on 27/03/2025.

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