SHRI BHAIRAVNATH MULTI STATE CO-OP CREDIT SOCIETY LIMITED,SATARA vs. INCOME TAX OFFICER, WARD 3, SATARA
In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal, relying on a catena of consistent decisions including the assessee's own case for a previous assessment year, held that interest income earned from deposits with Cooperative Banks is eligible for deduction under Section 80P(2)(d) of the Income Tax Act. The order of the ld. CIT(A) was set aside, and the deduction was allowed.
What were the facts?
The assessee, Shri Bhairavnath Multi State Co.op. Credit Society Limited, claimed a deduction under Section 80P(2)(d) of the Income Tax Act for interest income earned from investments held with Cooperative Banks/Societies. The Assessing Officer and the ld. CIT(A) disallowed this deduction, leading to the current appeal.
What were the issues?
Whether interest income earned by a cooperative society from deposits/investments held with Cooperative Banks/Societies is eligible for deduction under Section 80P(2)(d) of the Income Tax Act.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “B”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
आदेश / ORDER
PER DR. MANISH BOARD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of assessee pertaining to A.Y. 2020-21 is directed against the order dated 27.10.2025 framed by National Faceless Appeal Centre, Delhi arising out of Assessment Order dated 19.09.2022 passed u/s.143(3) r.w.s.144B of the Income Tax Act, 1961.
The only grievance of the assessee is that ld.CIT(A) erred in affirming the action of the AO of not granting deduction u/s.80P(2)(d) of the Act for the interest income earned on investments held with Cooperative Banks/Cooperative Societies.
At the outset, ld. Counsel for the assessee submitted that there is no dispute about the fact that assessee earned interest of ₹3,87,34,866 from investments held with Cooperative Banks and this fact is clearly discernible from the assessment order. He submitted that in assessee’s own case for A.Y. 2014-15 similar issue has been decided in favour of the assessee and deduction u/s.80P(2)(d) of the Act has been allowed. He further submitted that a consistent view has been taken by this Tribunal allowing the deduction u/s.80P(2)(d) of the Act for the interest income earned from investments held with Cooperative Banks as well as Cooperative Societies.
Ld. DR supported the order of ld.CIT(A).
We have heard the rival contentions and perused the record placed before us. The issue under consideration is no longer res integra by virtue of catena of decisions taking consistent view that interest income earned from deposits with Cooperative Banks is eligible for deduction u/s.80P(2)(d) of the Act. Recently, this Bench in the case of Annapurna Nagari Sahkari Pathsanstha Maryadit Yawal Vs. ITO in 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 is reproduced below:
“7. We have heard both the sides and perused the record placed before us. In the instant case, the Assessing Officer 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 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 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.
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.”
6. 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, we hold that the interest income earned from deposits/Investments held with Cooperative Bank is eligible for deduction u/s.80P(2)(d) of the Act. We therefore allow the impugned deduction claimed by the assessee u/s.80P(2)(d) of the Act. Impugned order is set aside and the grounds of appeal raised in the instant appeal are allowed.
In the result, the appeal filed by the assessee is allowed.
Order pronounced on this 18th day of December, 2025.
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