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Facts
The appellant, a cooperative society, claimed deduction under Section 80P(2)(d) for interest income earned from a cooperative bank. The AO disallowed this claim, and the CIT(A) confirmed the disallowance, relying on the Supreme Court's decision in M/s. Totgar's Sale Cooperative Society Ltd.
Held
The Tribunal held that the issue is covered in favour of the appellant by the Supreme Court decision in Mavilayi Services Cooperative Bank Limited, and several other coordinate bench decisions. Consequently, the appellant society is entitled to the deduction under Section 80P(2)(d) of the Act.
Key Issues
Whether the cooperative society is entitled to deduction under Section 80P(2)(d) on interest income, distinguishing the ruling in Totgar's Sale Cooperative Society Ltd. and relying on Mavilayi Services Cooperative Bank Limited.
Sections Cited
80P(2)(d), 234A, 234B, 234C, 270A
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Income Tax Appellate Tribunal, Mumbai “(SMC
Before: Smt. Kavitha Rajagopal (JM) & Shri Omkareshwar Chidara (AM)
The Ld. ADDL/JCIT(A)-3, Kolkata, erred in confirming the addition of Rs. 16,43,987/- made by the Ld. Mumbai, being disallowance of deduction under section 80P(2)(d) of the Act.
The Ld. AO, Mumbai, has erred in the levying interest under section 234A, 234B and 234C of the Act.
3. The Ld. AO, has erred in initiating penalty proceeding u/s 270A of the Act. 2. From the assessment order, it is observed that the Ld. AO disallowed the claim of appellant-society under section 80P(2)(d) of the Act relating to interest income earned from the Cooperative Bank. The Ld. CIT(A) confirmed the addition for the reasons mentioned in his order by placing reliance on M/s. Totgar’s Sale Cooperative Society Ltd. of Hon'ble Supreme Court.
2 Pragati Premises Co-operative Society Ltd.
Aggrieved by the orders of the lower authorities, the appellant-society filed an appeal before the ITAT with the Grounds of appeal mentioned in page No. 1 of this order.
4. In this appeal, Ld. AR of the appellant has submitted that the issue is covered in favour of the appellant now after decision of Mavilayi Services Cooperative Bank Limited Vs. Ld. CIT(A) (431 ITR 1)(SC). The Ld. AR has filed copy of the decision rendered by the ITAT, Mumbai in the case of Murude Sahakari Patsanstha Maryadit Vs. ITO (ITA No. 901/Mum/2024 for A.Y. 2018-19) in which the ITAT relied on the decisions of Mavilayi Services Cooperative Bank Limited (supra) and gave relief to the appellant-society and held that the society is entitled for deduction u/s. 80P(2)(d) of the Act. Apart from the Supreme Court decision, Ld. AR has argued that the coordinate Benches of Mumbai have consistently taken decision that the cooperative societies are entitled for deduction u/s. 80P(2)(d) of the Act in various decisions like Kaliandas Udyog Bhavan Premises Cooperative Society Ltd. Vs. ITO (ITA No. 6547/Mum/2017) and in the case of Land End Cooperative Housing Society Ltd. Vs. ITO (ITA No. 3566/Mum/2014) etc.
5. The Ld. DR has relied on the orders of lower authorities and placed reliance the decision of Totgar’s Sale Cooperative Society of Hon'ble Supreme Court.
Heard rival submissions. In the case of Kaliandas Udyog (supra), the Coordinate Bench considered and distinguished the decision of Hon'ble Supreme Court of Totgar’s Sale Cooperative Society and held that the appellant society is entitled for deduction under section 80P(2)(d) of the Act. As the issue is squarely covered by the decision of Hon'ble Supreme Court in the case of Mavilayi Services Cooperative Bank Limited (supra) and several other decisions relied upon by Ld. AR of the appellant, it is hereby held that the appellant-society is entitled for deduction u/s. 80P(2)(d) of the Act.
3 Pragati Premises Co-operative Society Ltd.
The appeal of the appellant-society is allowed.
Order pronounced in the open Court on 24/02/2025.