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Facts
The appellant, a cooperative housing society, appealed the denial of deduction under section 80P(2)(d) of the Income Tax Act, which was confirmed by the CIT(A) based on the Totgar's Cooperative Sale Society Ltd. decision. The appellant relied on coordinate bench decisions that had distinguished Totgar's and followed the Supreme Court's later ruling in Mavilayi Service Cooperative Bank Ltd.
Held
The Tribunal held that the appellant society is entitled to deduction under section 80P(2)(d) of the Act, reversing the order of the CIT(A). This decision was based on the precedent set by coordinate benches following the Hon'ble Supreme Court's ruling in Mavilayi Service Cooperative Bank Ltd.
Key Issues
Whether interest earned by a cooperative society from deposits is eligible for deduction under Section 80P(2)(d) of the Income Tax Act, following recent Supreme Court judgments.
Sections Cited
80P(2)(d), 90P(2)(d)
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Income Tax Appellate Tribunal, Mumbai “K(SMC
Before: Smt. Kavitha Rajagopal (JM) & Shri Omkareshwar Chidara (AM)
From the order of Ld. CIT(A), it is observed that reliance was placed by him on the decision of Hon'ble Supreme Court in the case of Totgar’s Cooperative Sale Society Ltd. (322 ITR 293)(SC) and the addition made by the Ld. AO was confirmed.
Aggrieved by the orders of Ld. AO and Ld. CIT(A), and appeal was preferred to ITAT with the sole ground mentioned in para 1 of this order.
During the hearing proceedings, the Ld. AR of the appellant has relied on 2 decisions of the Coordinate Bench, i.e., Pantnagar Ashtvinayak CHSL
2 Coover Villa Cooperative Housing Society Ltd.
(ITA No. 1848/Mum/2022 and The MIG Cooperative Housing Society (Bandra East) Group IV Ltd. (ITA No. 1215/Mum/2024) and pleaded that the issue is now squarely covered by the Coordinate Bench decisions. In both these decisions, the Coordinate Bench of Mumbai has considered the decision of Hon'ble Supreme Court in the case of Totgar’s Cooperative Sale Society and held that the Cooperative Society is entitled to deduction u/s. 80P(2)(d) of the Act. In the case of Pantnagar CHSL (supra), the Coordinate Bench has considered the decision of Kaliandas Udyog Bhavan Premises Cooperative Society (94 Taxman.com 15)(Mum), which has distinguished the decision of Hon'ble Supreme Court’s decision of Totgar’s Sale Cooperative Society and held that the appellant society entitled for deduction under section 90P(2)(d) of the Act. Now, the issue is settled after the Hon'ble Supreme Court rendered its decision in the case of Mavilayi Service Cooperative Bank Ltd. Vs. CIT (123 taxamnn.com 161)(SC), where it was held that interest earned by way of deposits in cooperative banks is exempt under section 80P(2)(d) of the Act. This decision of Hon'ble Supreme Court was followed by the Coordinate Bench in the above case of The MIG Cooperative Society (supra).
The Ld. DR relied on the orders of lower authorities, especially on the order of Ld. CIT(A) where this first appellate authority placed reliance on the decision of M/s. Totgar’s Cooperative Sale Ltd. of Hon'ble Apex Court and confirmed the decision.
Heard both sides. Respectfully following the decision of Coordinate Bench which was followed the decision of Hon'ble Supreme Court in the case of Mavilayi Cooperative Bank Ltd. (supra), it is held that the appellant society is entitled to the deduction u/s. 80P(2)(d) of the Act in the impugned case and the order of Ld. CIT(A) is reversed.
3 Coover Villa Cooperative Housing Society Ltd.
The appeal of the appellant is allowed.
Order pronounced in the open Court on 24/02/2025.