ASSISTANT COMMISSIONER OF INCOME TAX, AAYKAR BHAWAN, KOLHAPUR vs. KOLHAPUR ZILLA SAHAKARI DUDH UTPADAK SANGH LIMITED, KOLHAPUR
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCHES “A”, PUNE
BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER
AND SHRI VINAY BHAMORE, JUDICIAL MEMBER
आयकर अपील सं. / ITA No.300/PUN/2024
Assessment Year : 2018-19
B-1, MIDC, Gokul Shirgaon,
Kolhapur – 416234
Maharashtra
PAN : AAAAK0230D
Appellant
Respondent
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of Revenue pertaining to A.Y. 2018-19 is directed against the order dated
21.12.2023 framed by National Faceless Appeal Centre, Delhi
(NFAC) arising out of Assessment Order dated 08.09.2021
passed u/s. 143(3) r.w.s.144B of the Income Tax Act, 1961 (in short ‘the Act’).
Brief facts of the case are that the assessee is a Cooperative Society and e-filed return of income for A.Y. 2018- 19 on 29.10.2018 declaring Nil income after claiming deduction under Chapter VIA at Rs.13,76,32,560/-. Case selected for Scrutiny through CASS for various reasons followed by validly serving notices u/s.143(3) and 142(1) of the Assessee by : Shri Sushant Phadnis (through virtual) Revenue by : Shri Amol Khairnar Date of hearing : 17.02.2026 Date of pronouncement : 11.03.2026 Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd.
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Act. Various issues were raised by the ld. Assessing Officer to which submissions were filed. However, ld. Assessing Officer completed the assessment proceedings making various additions totalling to Rs.87,33,22,821/-. Against the additions made by the Assessing Officer assessee preferred appeal before ld.CIT(A) and partly succeeded. Now the Revenue is in appeal before this Tribunal raising four grounds of appeal to be dealt in the subsequent paragraphs.
Ld. Departmental Representative vehemently argued supporting the order of Assessing Officer.
On the other hand, ld. Counsel for the assessee referring to various paper books filed on 28.05.2024, 20.01.2026 and 12.02.2026 submitted that the issues raised by the Revenue in Ground No.1 and 4 are squarely covered by the decision of this Coordinate Bench in assessee’s own case and for the issues raised in Ground Nos. 2 and 3 he fairly admitted that certain details have not been verified by ld. Assessing Officer inspite of the same being filed during the course of assessment proceedings and therefore if deemed appropriate the issues raised in Ground Nos. 2 and 3 may be restored to the file of ld. Juri ictional Assessing Officer for afresh adjudication.
We have heard the rival contentions and perused the record placed before us. We proceed to adjudicate the issues ground-wise. Ground No.1 raised by the Revenue reads as under : Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd.
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“1. Whether on facts and circumstances of the case the Id.CIT(A) erred in deleting the addition of Rs.4,96,610/-made on account of fixed assets on which project subsidy was received from National
Dairy Development Board as the department has contested the issue before the Supreme Court.”
On due consideration of the submissions filed by the assessee, we find that similar issue came for adjudication before this Tribunal in assessee’s own case for A.Y. 2017-18 vide ITA No.1236/PUN/2023 order dated 25.04.2024 in which this Tribunal on considering the judicial precedents as well as the judgment of Hon’ble Juri ictional High Court in the case of assessee for A.Y. 2007-08, 2008-09 has given relief to the assessee. We find that similar issue has been raised before us regarding the depreciation on Fixed Assets on which project subsidy has been received from National Dairy Development Board and that such alleged claim of depreciation at Rs.4,94,610/- deserves to be allowed in light of the judicial precedents and the decision taken in assessee’s own case by this Tribunal in the immediately preceding assessment year. Thus, we fail to find any merit in the Ground No.1 raised by the Revenue and the same is hereby dismissed.
Ground No.2 raised by the Revenue reads as under :
“2. Whether on facts and circumstances of the case the Id.CIT(A) erred in deleting the addition of Rs.9,15,34,305/- made on account of additional depreciation and not appreciating the fact that the claim of additional depreciation had been disallowed by Ld.CIT(A),
Kolhapur in assessee's own case for AY 2014-15.”
In this ground, Revenue has referred to the claim of additional depreciation denied by ld. Assessing Officer. We note that during the year under consideration assessee has purchased new machineries claiming to have being utilised for Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd.
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increasing the capacity for production for 7 lakh litres milk to 11 lakh litres of milk per day. However, perusal of the observation of the Assessing Officer, we find that ld. Assessing
Officer has stated that such claim of additional depreciation cannot be allowed for the plant and machineries purchased for packaging of milk because same cannot be considered as manufacturing activity. However, ld. Counsel for the assessee has contended that these machineries have been acquired for increasing the manufacturing capacity. It is also submitted that some claim of additional depreciation is for the machineries purchased in the preceding financial year after
30.09.2016 and that 50% additional depreciation has been claimed during the year under consideration. It is also submitted that ld. Assessing Officer has wrongly alleged that assessee has not provided the details regarding the use of new plant and machinery whether it was used in manufacturing activity or packaging of milk. However, considering the prayer made by ld. Counsel for the assessee, we deem it appropriate to remit this issue to the file of ld. Juri ictional Assessing
Officer for afresh adjudication after duly considering the details of new plant and machinery acquired during the year and the purpose of purchasing of such machineries and thereafter decide the claim of additional depreciation in accordance with law. Needless to mention that ld. JAO shall provide reasonable opportunity of hearing to the assessee.
Ground No.2 raised by the Revenue is allowed for statistical purposes.
Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd.
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9. Ground No.3 raised by the Revenue reads as under :
“3. Whether on facts and circumstances of the case the Id.CIT(A) erred in deleting the addition of Rs.4,51,383/-made on account of Mahila Netruva Vikas Gokul Gram Expenditure as claim of said expenditure was done on self made vouchers which is not cogent evidence.”
The above issue relates to disallowance of expenses of Rs.4,51,383/-. It has been fairly admitted by ld. Counsel for the asessee that certain details could not be furnished before the lower authorities. Considering the prayer made by ld. Counsel for the assessee, we deem it appropriate to remit back this issue as well to the file of ld. Juri ictional Assessing Officer since during the assessment proceedings assessee has only furnished copy of ledger account and not bills and vouchers to prove the genuineness of the expenditure. Thus, Ground No.3 raised by the Revenue is allwoed for statistical purposes.
Ground No.4 raised by the Revenue reads as under :
“4. Whether on facts and circumstances of the case the Id.CIT(A) erred in allowing the disallowance made to the tune of Rs.
13,29,65,463/- in respect of interest earned by the assessee from co-operative bank under section 80(P)(2)(d) considering that interest earned by the co-operative assessee from co-operative bank is not eligible for deduction under section 80P(2)(d).”
The issue in this ground relates to finding of ld.CIT(A) allowing the assessee’s claim of deduction u/s.80P(2)(d) of the Act for the interest income earned from investments held with Cooperative Banks. We observe that ld.CIT(A) has granted relief placing reliance on plethora of decisions holding that interest earned from investments with cooperative banks is Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd.
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eligible for deduction u/s.80P(2)(d) of the Act. Relevant extract of finding of ld.CIT(A) is reproduced below :
“14. On a perusal of Sec. 80P(2)(d), it can safely be gathered that interest income derived by an assessee co-operative society from its investments held with any other cooperative society shall be deducted in computing its total income. It may herein be observed that what is relevant for claim of deduction under Sec. 80P(2)(d) is that the interest income should have been derived from the investments made by the assessee co-operative society with any other co-operative society. There is no doubt, with the insertion of sub-section (4) of Sec. 80P, vide the Finance Act, 2006, with effect from 01.04.2007, the provisions of Sec. 80P would no more be applicable in relation to any co-operative bank, other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank. However, at the same time, this appellate authority is not able to subscribe to such amendment jeopardising the claim of deduction of a co-operative society under Sec. 80P(2)(d) in respect of its interest income investments/deposits parked with a co-operative bank. It is obvious that as long as it is proved that the interest income is being derived by a cooperative society from its investments made with any other co-operative society, the claim of deduction under the aforesaid statutory provision, viz. Sec. 80P(2)(d) would be duly available. The term cooperative society" had been defined under Sec. 2(19) of the Act, as under:-*
(19) "Co-operative society" means a cooperative society registered under the Cooperative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any state for the registration of cooperative societies;"
1. Though, the cooperative banks, pursuant to the insertion of subsection (4) to Sec. 80P, would no more be entitled for claim of deduction under Sec. 80P of the Act, but as a cooperative bank continues to be a co-operative society registered under the Co- operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any State for the registration of co- operative societies, therefore, the interest income derived by a cooperative society from its investments held with a co-operative bank would be entitled for claim of deduction under Sec.80P(2) (d) of the Act.
2. Similar view has been taken by Hon'ble High Court of Karnataka in case of Pr. CIT & Anr.Vs. Totgar's Co-operative Sale Society Ltd. (2017) 292 ITR 74 (Kar.) and Hon'ble Gujarat High Court in case of State Bank of India vs. CIT (2016) 389 ITR 578 (Guj.) wherein it is held that interest income earned by a co-operative society on its investment held with cooperative bank would be eligible for claim of deduction under section 80P(2)(d) of the Act. Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd.
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14.3. In a more recent judgment dated 10-10-2023 Hon'ble Madras
High Court Thorapadi Urban Co-op Credit Society Limited Vs ITO
(Madras High Court) in [2023] 156 taxmann.com 419 (Madras) (10-
10-2023] held that where assessee-cooperative society made investments with co-operative bank which was registered under Tamil Nadu Co-operative Societies Act, 1983, assessee-society would be entitled to claim benefit under section 80P(2)(d) with respect to interest income received from said investments.
4. So respectfully following the decisions rendSENT by Hon'ble Karnataka High Court (supra) Hon'ble Gujarat High Court (supra) and Hon'ble Madras High Court (Supra), this appellate authority is of the considered view that appellant society who has earned an amount of Rs. 13,29,65,463/- which is disallowed in the instant assessment order, from its investment of surplus fund with cooperative banks/societies is entitled for deduction under section 80P(2)(d) of the Act. This ground of appeal is therefore allowed.”
Ld. DR failed to bring on record any binding precedent to controvert the finding of ld.CIT(A). We also observe that similar view has been taken by this Tribunal in plethora of decisions. This Bench in the case of Annapurna Nagari No.313/PUN/2025, order dated 07.05.2025 has allowed the deduction claimed by the assessee u/s.80P(2)(d) of the Act observing as under :
“5. We have heard the rival submissions and perused the record placed before us. There is no dispute to the fact that assessee has earned interest income of Rs.1,02,95,103/- from deposits/investments with Cooperative Banks. This fact has been accepted by the Assessing Officer in the assessment order also.
Admittedly, assessee has not filed the requisite details before ld.CIT(A). We however considering the fact that the issue regarding allowability of deduction u/s.80P(2)(d) of the Act for the interest earned from Cooperative Banks is no longer res integra as the very same issue has been decided by this Tribunal in catena of decisions and in assesse’s own case for A.Y. 2020-21 holding that the assessee is eligible for deduction u/s.80P(2)(d) of the Act as the Cooperative Banks are basically Cooperative Societies. For the sake of brevity, the finding given in ITA No.2471/PUN/2024 is reproduced below:
“7. We have heard both the sides and perused the record placed before us. In the instant case, the Assessing Officer
Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd.
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disallowed the interest income of Rs.1,63,98,998/- earned out of the Fixed deposits/Investments made with Cooperative
Banks treating the same as Income from Other Source.
Ld.CIT(A) dismissed the appeal in limine without discussing anything on merits of the issues and on the ground that the assessee has not provided plausible explanation for admission of additional evidences.
Section 80P(2)(d) of the Act provides that the sum received in respect of any income by way of interest or dividend derived by Cooperative Society from its investment with any other Cooperative Society, the whole of such income is eligible for deduction u/s.80P of the Act. we find that this issue is no more res integra as the Coordinate Benches of this Tribunal has been consistently holding that the interest income earned out of the FDs/Investments kept with Cooperative Banks is allowable u/s.80P(2)(d) of the Act. We find that this Tribunal in case of Kolhapur District Central Co- op. Bank Kanista Sevakanchi Sahakar Pat Sanstha Ltd., Vs. ITO in ITA No.1365/PUN/2023, dated 01.01.2024 dealing with similar issue after placing reliance on another decision of this Tribunal in the case of The Ugar Sugar Works Kamgar & Dr. Shirgaokar Shaikshanik Trust Nokar Co-op Credit Society vs. ITO in ITA No.84/PAN/2018, dated 27.05.2022 has held that the interest earned from deposits with Cooperative Banks are also eligible for deduction u/s.80P(2)(d) of the Act as Cooperative Banks are basically Cooperative Societies only but have turned into Bank on getting necessary banking license. 9. Respectfully following the above referred decisions taking consistent view along with considering the facts of the case, where the assessee made investment with the Cooperative Banks we hold that the assessee is eligible for deduction u/s.80P(2)(d) of the Act for the interest income earned from Cooperative Banks at Rs.1,63,98,998/-. Findings of the ld. CIT(A) is set-aside and the Assessing Officer is directed to allow the claim made by the assessee. Effective grounds of appeal raised by the assessee are allowed.”
Respectfully following the same, we hold that deduction of Rs.1,02,95,103/- u/s.80P(2)(d) of the Act claimed by the assessee on the interest earned from deposits/Investments with Cooperative Banks deserves to be allowed. Relevant finding of ld.CIT(A) on merits is set aside and grounds of appeal No.5 to 8 raised by the assessee are allowed.”
Considering the above decision and the consistent view taken by this Tribunal that the interest income earned from Kolhapur Zilla Sahakari Dudh Utpadak Sangh Ltd.
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deposits/Investments with Cooperative Bank is eligible for deduction u/s.80P(2)(d) of the Act, we fail to find any infirmity in the finding of ld.CIT(A) allowing the alleged claim of deduction u/s.80P(2)(d) of the Act. Ground No. 4 raised by the Revenue is dismissed.
In the result, the appeal of the Revenue is partly allowed for statistical purposes.
Order pronounced on this 11th day of March, 2026. (VINAY BHAMORE)
ACCOUNTANT MEMBER
पुणे / Pune; दिन ांक / Dated : 11th March, 2026. Satish
आदेश की प्रतिलिपि अग्रेपिि / Copy of the Order forwarded to :
अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. विभ गीय प्रतितनधि, आयकर अपीलीय अधिकरण, “A” बेंच, पुणे / DR, ITAT, “A” Bench, Pune.
ग र्ड फ़ इल / Guard File.
आिेश नुस र / BY ORDER,
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