ANNAPURNA NAGARI SAHKARI PATHSANSTHA MARYADIT,JALGAON vs. ITO, WARD 1(4), JALGAON, JALGAON

Facts of the case, in brief, are that the assessee is an AOP engaged in the business of running credit co-operative societies by providing credit facilities to its members. It filed its return of income on 13.10.2018 declaring total income of Nil. The case was selected for limited scrutiny under CASS. Accordingly statutory notices u/s 143(2) and 142(1) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) were issued and served on the assessee in response to which the assessee filed the requisite details from time to time. During the course of assessment proceedings the Assessing Officer noted that the assessee has shown to have received interest amount of Rs.1,27,28,099/- from bank investment, the details of which are as under:

The Assessing Officer, therefore, asked the assessee to explain the allowability of deduction u/s 80P(2)(d) of the Act. Rejecting the various explanations given by the assessee and relying on various decisions the Assessing Officer disallowed the claim of deduction u/s 80P(2)(d) of the Act by recording as under:

In appeal, the Ld. CIT(A) / NFAC upheld the action of the Assessing Officer.

Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal by raising the following grounds: 1] The learned CIT(A) erred in confirming the disallowance of deduction u/s 80P of Rs.1,27,28,099/- without appreciating that the disallowance made was not justified at all and accordingly, the said disallowance is required to be deleted. 2] The learned CIT(A) erred in not appreciating the fact that the learned A.O. was not justified in disallowing the deduction of Rs.1,27,28,099/-, claimed u/s 80P in respect of the interest income earned by the assessee from investment in other co-operative banks and hence, the claim made by the assessee should have been allowed. 3] The learned CIT(A) failed to appreciate that the assessee has invested funds in the course of its business of providing credit facilities to its members and accordingly, the deduction u/s 80P(2)(a)(i) was allowable to the assessee in respect of the above referred interest income earned by it. 4] The learned CIT(A) further erred in not appreciating that the interest income of Rs.1,27,28,099/- was earned from the deposits / investments with co-operative banks and hence, the said amount was eligible for deduction u/s 80P(2)(d) of the Act. 5] The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.

The Ld. Counsel for the assessee at the outset referred to the decision of the Co-ordinate Bench of the Tribunal in assessee’s own case for assessment year 2020-21 vide order dated 24.03.2025 and submitted that identical issue has been decided by the Tribunal in favour of the assessee and the claim of deduction u/s 80P(2)(d) of the Act has been allowed. He submitted that following the above decision, the Tribunal again in assessee’s own case for assessment year 2013-14 vide order dated 07.05.2025 has allowed the claim of deduction u/s 80P(2)(d) of the Act. He accordingly submitted that the issue being covered in favour of the assessee, the grounds raised by the assessee should be allowed.

The Ld. DR on the other hand heavily relied on the orders of the Assessing Officer and the Ld. CIT(A) / NFAC.

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.”

We find following the above decision the Tribunal again in assessee’s own case for assessment year 2013-14 vide order dated 07.05.2025 has allowed the claim of deduction u/s 80P(2)(d) of the Act in respect of the interest earned from the fixed deposits / investments with the other co- operative banks.

Respectfully following the above decisions of the Co-ordinate Bench of the Tribunal in assessee’s own case for the two years mentioned above and in absence of any contrary material brought to our notice by the Ld. DR, we, set aside the order of the Ld. CIT(A) / NFAC and direct the Assessing Officer to allow the claim of deduction u/s 80P(2)(d) of the Act on the interest earned from the investments made with the other co-operative banks. The grounds raised by the assessee are accordingly allowed.

In the result, the appeal filed by the assessee is allowed.