THE SALSETTE CATHOLIC CO-OPERATIVE HOUSING SOCIETY LIMITED ,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 23(3), MUMBAI

The assessee has raised following grounds of appeal: “In the facts and circumstances of the case and in law, the Learned National Faceless Appeal Centre (NFAC) CIT (Appeals) has erred in confirming disallowance of deduction claimed of Rs. 3,04,21,874/- under section 80P(2)(d) of the Act.” 1. In the facts and circumstances of the case and in law, the Learned National Faceless Appeal Centre (NFAC) CIT (Appeals) has erred in confirming disallowance of deduction claimed of Rs. 2,94,40,756/- under section 80P(2)(d) of the Act.

In both the appeals, sole issue involved is regarding claim of deduction u/s 80P(2)(d) of the Act. Since facts in both the years are identical, we take up AY 2016-17 as a lead case. 4. Brief facts of the case are that the assessee, is a cooperative housing society and it filed return declaring total income of Rs. 99,18,010/- on 14.09.2016. The assessee claimed deduction u/s 80P(2)(d) of the Act in respect of interest earned from the deposits with Saraswat Co-operative Bank and Maharashtra State Co-operative Bank amounting to Rs. 3,04,21,874/-. The case was selected for limited scrutiny and assessment was completed at an income of Rs. 4,03,39,880/- after making addition on account of interest of Rs. 3,04,21,874/- received from co-operative banks. 5. Aggrieved with the order dated 18.02.2018 of the Ld. AO, the assessee filed an appeal before Ld. CIT(A). Vide order dated 31.09.2024, Ld. CIT(A), dismissed the appeal of the assessee.

Aggrieved with the order of Ld. CIT(A), the assessee is in appeal before us. Ld. AR has submitted a list of decisions in support of its claim that interest earned by a co-0perative housing society from a co-operative bank is eligible for deduction u/s 80P(2)(d) of the Act. Some of the decisions relied upon by the assessee are as under: i. Samarth Surksha Rakshank Co-op. Credit Society Ltd. ITA No. 5495/Mum/2024 ii. Vile Partle Model Cooperative Housing Society Ltd. ITA No. 175/Mum/2024 & others. iii. ASIT v/s The Salsette Catholic Co-operative Housing Ltd. ITA No. 3470/Mum/2019 & others (assessee’s own case)

On the other hand, Ld. DR vehemently argued that the issue is covered against the assessee by the Hon’ble Karnataka High Court’s decision in the case of PCIT v/s Totalgars Cooperative Sales Society in 395 ITR 611 and argued that the interest earned from the co-operative banks does not fall under the purview of section 80P(2)(d) of the Act. 8. We have considered the rival submissions and perused the material placed before us as well as judicial pronouncements on the issue. It is seen that the issue is covered in favour of the assessee in various decisions of the co- ordinate benches as well as subsequent decisions of the Hon’ble Karnataka High Court and Gujarat High Court.

In assessee’s own case for AYs 2013-14 and 2014-15 in ITA Nos. 3870/Mum/2019 and 3871/Mum/2019. The issue has been decided in favour of the assessee with the following observations: “11. Considered rival submissions and perused the material available on record including the case laws relied upon by the parties. We find that the issue in respect of deduction claimed in respect of interest income earned from Co-operative Banks under section 80P(2)(d) of the Act is squarely covered by the decisions relied upon by the learned Counsel for the assessee as aforesaid wherein identical issue, except variation in figures, has been decided by the Tribunal in (i) Amit Tata Employees Co- operative Housing Society Ltd. v/s ACIT, ITA no.292/Mum./2018, Α.Υ. 2014-15, order dated 26.07.2019; (ii) Poonam Chambers Premises Co- Op. Society Ltd. v/s ACIT, ITA no. 4463/Mum./2017, Α.Υ. 2014-15, dated 23.08.2018; (iii) Merwanjee Cama Park Co-operative Housing Society Ltd. v/s ITO, ITA no.6139/ Mum./2014, A.Y. 2010-11, order dated 27.09.2019; and (iv) ITO v/s Eternity Co-operative Housing Society Ltd., ITA no. 6159/Mum./2017, Α.Υ. 2013-14, order dated 15.05.2018. Consistent with the view taken in the aforesaid Co-ordinate Bench decisions in which the decision of the Hon'ble Karnataka High Court in Totagars Co-operative Society (supra), was distinguished by the Co- ordinate Bench. Therefore, we hold that the assessee is a Co-operative Society is entitled for claiming deduction under section 80P(2)(d) of the Act in respect of the interest income earned from either from Co- operative Bank or from Co-operative Society whatsoever that may be. Consequently, we uphold the order of the learned Commissioner (Appeals) by dismissing the ground raised by the Revenue.” 10. Respectfully following the above decision of the co-ordinate bench, we hold that the assessee is entitled to claim deduction u/s 80P(2)(d) of the Act in respect of interest income received from the co-operative banks. As such the deduction of Rs. 3,04,21,874/- in respect of interest received from Saraswat Cooperative Bank and Maharashtra Cooperative Bank is hereby allowed.