Loading judgment…
Facts
The assessee, a cooperative bank, earned interest income from investments with other cooperative banks. The Assessing Officer disallowed the deduction under Section 80P(2)(d) of the Income Tax Act, 1961. The CIT(A) also did not allow the deduction.
Held
The Tribunal held that the issue regarding the allowability of deduction under Section 80P(2)(d) for interest income earned from cooperative banks is well-settled. Following its own previous decisions, the Tribunal ruled that the assessee is eligible for the deduction.
Key Issues
Whether interest income earned by a cooperative bank from investments in other cooperative banks is eligible for deduction under Section 80P(2)(d) of the Income Tax Act, 1961.
Sections Cited
250, 147, 144, 144B, 80P(2)(d), 80P
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCHES “SMC”, PUNE
Before: DR.MANISH BORAD & MS. ASTHA CHANDRA
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
The captioned appeal at the instance of assessee relating to A.Y. 2013-14 is directed against the order dated 09.12.2024 framed by National Faceless Appeal Centre, Delhi u/s.250 of the Income-tax Act, 1961 (in short ‘the Act’) arising out of Assessment Order dated 25.03.2022 passed u/s.147 r.w.s.144 r.w.s.144B of the Act.
At the outset, Ld. Counsel for the assessee requested for not pressing the legal issues raised in Grounds of appeal No. 1 to 4 and the same are dismissed as ‘Not pressed’. In remaining Grounds 5 to 8, the only issue is that ld.CIT(A) has not allowed the deduction u/s.80P(2)(d) of the Act for the interest income of Rs.1,02,95,103/- earned on deposits/investments with Cooperative Banks.
Annapurna Nagari Sahkari Pathsanstha Maryadit Yawal 3. Ld. Counsel for the assessee submitted that the issue stands squarely covered in favour of the assessee by plethora of decisions and referred to the decision of this Tribunal in assessee’s own case for A.Y. 2020-21 in order dated 24.03.2025.
On the other hand, Ld. Departmental Representative submitted that assessee failed to furnish any details before the lower authorities and the matters needs to be restored to the file of ld. Assessing Officer.
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.
8. 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.”
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.
In the result, appeal of the assessee is partly allowed.
Order pronounced on this 07th day of May, 2025.