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Facts
The appellant cooperative housing society was denied deduction under section 80P(2)(d) of the Income Tax Act by the Assessing Officer (AO). The CIT(A) confirmed the addition, leading to the present appeal before the ITAT. The issue revolved around whether interest earned on fixed deposits was eligible for deduction.
Held
The Tribunal held that the issue is covered by the decision of the Hon'ble Supreme Court in the case of M/s. Mavilayi Service Cooperative Bank Ltd. and various decisions of coordinate benches. Therefore, the addition made by the AO was deleted, and the appellant society was held eligible for deduction.
Key Issues
Whether interest earned on fixed deposits by a cooperative housing society is eligible for deduction under section 80P(2)(d) of the Income Tax Act.
Sections Cited
80P(2)(d)
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Income Tax Appellate Tribunal, Mumbai “K(SMC
Before: Smt. Kavitha Rajagopal (JM) & Shri Omkareshwar Chidara (AM)
The sole ground taken by the appellant Cooperative Housing Society relates to denial of deduction u/s. 80P(2)(d) of the I.T. Act by Ld. AO.
Aggrieved by the denial of deduction as mentioned above, the appellant filed an appeal before Ld. CIT(A) who has confirmed the addition made by the Ld. AO. As the appellant society did not get relief from the first appellate authority, further appeal was filed before the ITAT stating that the National Faceless Assessment Centre (NFAC) erred in confirming the addition made on interest earned on fixed deposits is not eligible for deduction u/s. 80P(2)(d) of the Act.
During the hearing before the Bench, Ld. AR of the appellant-society filed written submissions stating that the appellant society is entitled for deduction u/s. 80P(2)(d) of the Act and in support of the written submission, Ld. AR of the appellant relied on various decisions of Pathare Prabhu Cooperative Housing Society Ltd. (153 taxmann.com 714); Sai Ankur
2 Dream House Cooperative Housing Society Limited Cooperative Housing Society Ltd. (171 taxmann.com 44); Guru Anand Cooperative Housing Society Ltd. (ITA No. 5691 & 5695/Mum/2024); Ceat Employees Cooperative Credit Society Ltd. (ITA No. 159/Mum/2023) and Grand Paradi Cooperative Housing Society Ltd. (ITA No. 4675/Mum/2023). Finally, the Ld. AR of the appellant brought to the notice of this Bench that the issue is now fully covered in favour of the appellant by the decision of Hon'ble Supreme Court in the case of M/s. Mavilayi Service Cooperative Bank Ltd. (431 ITR 1)(SC) where it was held that the appellant is entitled for deduction u/s. 80P(2)(d) of the Act.
Ld. DR relied on the orders of the lower authorities, where the appellant-society was denied deduction u/s. 80P(2)(d) of the Act.
After hearing rival submissions, it is decided that the issue is squarely covered by the decision of Hon'ble Supreme Court in the case of Mavilayi Services Cooperative Bank Limited (supra) and also various decisions of the Coordinate Benches of Mumbai, addition made by the Ld. AO is deleted and it is held that the appellant society is eligible for deduction u/s. 80P(2)(d) of the Act.
The appeal of the appellant-society is allowed.
Order pronounced in the open Court on 24/02/2025.