SHARAD NAGARI SAHAKARI PATSANSTHA MARYADIT,SANGLI vs. INCOME-TAX OFFICER, WARD -2,, SANGLI

The factual matrix of the case is that the assessee is the Cooperative Credit society registered under Maharashtra Cooperative Societies Act, 1912. A return was filed claiming deduction u/s.80P(2)(d) amounting to Rs.67,74,783/-, which was restricted to the extent of gross total income amounting to Rs.47,63,695/-. The Assessing Officer (AO) held the interest income of Rs.50,12,157/- earned from Cooperative banks as falling under the head ‘Income from other sources” and hence, ineligible for deduction. The ld. CIT(A) accorded his imprimatur to the point of view canvassed by the AO. Aggrieved thereby, the assessee has approached the Tribunal.

After considering the rival submissions and perusing the relevant material on record, it is observed that the assessee is a Cooperative Credit society and earned interest income from Cooperative banks. The claim of deduction u/s.80P(2)(d) has been disallowed by the AO treating such income as falling under the head ‘Income from other sources’ instead of ‘Profits and Gains of business or profession’ as claimed by the assessee. The ld. AR has Sharad Nagari Sahakari Patsanstha Maryadit brought to my notice copies of certain orders passed by the Pune Bench of the Tribunal on this issue accepting the assessee’s claim. One of such orders is Rena Sahakari Sakhar Karkhana Ltd. Vs. Pr.CIT (ITA No.1249/PUN/2018).

Vide order dated 07-01-2022, the Tribunal accepted the claim of deduction u/s.80P(2)(d) under similar circumstances. No contrary order has been brought to my notice by the ld. DR. In view of the facts and respectfully following the decision of the Division Bench, I overturn the impugned order and direct to grant deduction u/s.80P(2)(d) on the amount of interest income under consideration.

In the result, the appeal is allowed. Order pronounced in the Open Court on 07th November, 2022.