SONAI GRAMIN BIGARSHETI SAH PATSANSTHA MARYADIT,PUNE vs. COMMISSIONER OF INCOME-TAX (A) -11, PUNE

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ITA 638/PUN/2022Status: DisposedITAT Pune02 November 2022AY 2018-194 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that a cooperative society is eligible for deduction under section 80P(2)(d) on interest and dividend income earned from investments/deposits parked with another cooperative society, even after the insertion of section 80P(4).

What were the facts?

The assessee, a credit cooperative society, claimed deduction under section 80P(2)(d) on interest and dividend income earned from a cooperative bank. The Assessing Officer denied this deduction, which was upheld by the CIT(A).

What were the issues?

Whether interest and dividend income earned by a cooperative society from a cooperative bank is eligible for deduction under Section 80P(2)(d) despite Section 80P(4).

Which sections of the Income-tax Act were involved?

Section 80P(2)(d),Section 80P(4)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE

Before: SHRI R.S. SYAL

For Appellant: Shri Rajkumar C. Doshi
For Respondent: Shri Ramnath P. Murkunde

आदेश / ORDER PER R.S. SYAL, VP : This appeal by the assessee arises out of the order passed by the CIT(A), Pune-11 on 17-08-2022 in relation to the assessment year 2018-19. 2. The only issue raised in this appeal is against the denial of deduction u/s.80P(2)(d) on the interest income of Rs.9,75,345/- and dividend of Rs.3,775/-. 3. The factual matrix of the case is that the assessee is a credit cooperative society engaged in providing credit facilities to its members. A return was filed declaring total income at Nil. During the course of assessment proceedings, the Assessing Officer (AO)

1.

Sonai Gramin Bigarsheti Sah. Patsanstha observed that the assessee earned interest on bank deposits of Rs.9,75,345/- and dividend of Rs.3,775/- from Pune District Cooperative Bank, which was claimed as deductible u/s.80P of the Act. The AO denied the deduction, which came to be affirmed in the first appeal. Aggrieved thereby, the assessee has approached the Tribunal.

4.

After considering the rival submissions and perusing the relevant material on record, it is seen that the assessee is a co- operative society which earned interest and dividend from Pune Central District Co-operative Bank. It is seen that the Pune Benches of the Tribunal in Rena Sahakari Sakhar Karkhana Ltd. Vs. Pr.CIT (ITA No.1249/PUN/2018) has held, vide its order dated 07-01-2022, that though co-operative banks, other than primary agricultural credit society or a primary co-operative agricultural and rural development bank, are not eligible for deduction pursuant to insertion of section 80P(4) w.e.f. 1.4.2007, but this provision does not dent the otherwise eligibility u/s 80P(2)(d) of the Act of a co-operative society on interest income on investments/deposits parked with a co-operative bank, which is a registered co-operative society as per section 2(19) of the Act, defining co-operative society to mean a co-operative society registered under the Sonai Gramin Bigarsheti Sah. Patsanstha Co-operative Societies Act, 1912 or under any law for the time being in force. Pune District Central Co-operative Bank is also a co-operative society, being, registered as such. Respectfully following the decision of the Division Bench, I overturn the impugned order and direct to grant deduction u/s.80P(2)(d) of the Act on the amount of interest and dividend income earned from Pune District Central Co-operative Bank, a co-operative society.

5.

In the result, the appeal is allowed. Order pronounced in the Open Court on 09th November, 2022.

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