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Facts
The assessee, a cooperative society, claimed deduction under Section 80P(2)(d) for interest earned from investments in Cooperative Banks. The Assessing Officer disallowed this claim, which was upheld by the CIT(A).
Held
The Tribunal held that interest income earned from Cooperative Banks is eligible for deduction under Section 80P(2)(d) of the Act, following its consistent view and previous decisions in similar cases. Therefore, the assessee's claim was allowed.
Key Issues
Whether interest income earned by a cooperative society from its investments in Cooperative Banks is eligible for deduction under Section 80P(2)(d) of the Income Tax Act.
Sections Cited
143(3), 80P, 80P(2)(d)
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 BORAD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of assessee pertaining to A.Y. 2015-16 is directed against the order dated 28.03.2025 of National Faceless Appeal Centre, Delhi arising out of Assessment Order dated 29.12.2017 passed u/s.143(3) of the Income Tax Act, 1961 ( in short ‘the Act’).
The only grievance of the assessee is that ld.CIT(A) erred in not granting benefit u/s.80P(2)(d) of the Act for the interest earned from Cooperative Banks.
At the outset, Ld. Counsel for the assessee referring to the decision of this Tribunal in assessee’s own case for A.Y. 2020-21 in order dated 24.03.2025 stated that the issue remains the same and that during the assessee under consideration assessee has made investment with Cooperative Banks and has earned interest of Rs.1,48,18,262/- and therefore net profit for the year at Rs.72,30,149/- deserves to be allowed as deduction u/s.80P(2)(d) of the Act. Ld. Departmental Representative did not oppose this request.
We have heard the rival contentions and perused the record placed before us. We notice that the assessee is a Cooperative Society and has earned interest of Rs.1,48,18,262/- from the investments made with Cooperative Banks. Assessee has claimed deduction u/s.80P at Rs.72,30,149/- which is less than the interest income from Cooperative Banks. This Tribunal is taking consistent view that interest income received from Cooperative Banks is also eligible for deduction u/s.80P(2)(d) of the Act as the Cooperative Banks are basically Cooperative Societies. This issue has come up in assessee’s own case for A.Y. 2020-21 before this Tribunal wherein the Tribunal held in favour of the assessee. Finding of this Tribunal in Para No.7 reads as under :
“7. We have heard rival contentions and perused the records placed before us. We observe that the assessee which is a co-operative society has declared income of Rs.3,92,570/- after claiming deduction u/s 80P at Rs.1,33,50,608/-. We also observe that during the year the assessee society has earned interest income of Rs.18,96,95,893/- and has made interest payments of Rs.13,78,57,308/-. Further, the net total income of Rs.1,37,43,180/- has been assessed after considering the interest income earned from surplus funds deposited with cooperative banks at Rs.4,15,27,813/-. We observe that since the cooperative banks are basically cooperative societies, therefore, the interest earned from cooperative banks are clearly eligible for deduction u/s 80P(2)(d) of the Act and this view has been consistently followed by the Co-ordinate Bench of Tribunal in plethora of decisions including that of Samarth Nagari Shakari Path Sanstha Maryadit (supra) and The Ugar Sugar Works Kamgar & Dr. Shirgaokar Shaikshanik Trust Nokar Co-op Credit Society vs. ITO in order dated 27.05.2022. Therefore, in view of the above, the interest income from cooperative banks at Rs.4,15,27,813/- is eligible for deduction u/s 80P(2)(d) of the Act. However, deposit with MSEDCL at Rs.1,09,529/-, Ld. Counsel for the assessee failed to furnish any judicial precedent, therefore, disallowance to the extent of Rs.1,09,529/- is hereby confirmed. In view of the above, against the total disallowance u/s 80P of the Act at Rs.1,33,50,608/-, we allow the deduction u/s 80P of the Act to the extent of Rs.1,32,41,080/- and confirm the disallowance of Rs.1,09,529/-. Effecting grounds of appeal raised by the assessee are partly allowed.”
Respectfully following the above decision and taking consistent view we are inclined to hold in favour of the assessee and allow the claim of deduction u/s.80P(2)(d) of the Act at Rs.72,30,149/-. Grounds of appeal raised by the assessee are allowed.
In the result, appeal of the assessee is allowed.
Order pronounced on this 05th day of June, 2025.