THODIYOOR SERVICE COOPERATIVE BANK LTD,KOLLAM vs. ITO, WARD 2, ALAPPUZHA

Asst.Year 2017-2018 Thodiyoor Service Co-operative The Income Tax Officer Bank Limited, Thodiyoor PO v. Ward – 2 Edakulangara, Kallelibhagam Alappuzha. Kollam – 690 523. PAN : AADAT8397D. (Appellant) (Respondent) Appellant by : Smt.Varsha, Advocate Respondent by : Smt.Leena Lal, Senior AR Date of Date of Hearing : 10.02.2025 Pronouncement :13.02.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Assessment Centre / Commissioner of Income- tax (Appeals) [“CIT(A)” for short] dated 05.12.2024 having DIN & Order No.ITBA/NFAC/S/250/2024-25/1070915594(1) for the assessment year 2017-2018.

“12.2 Section 80P deals with co-operative societies' computation of income. As already noted, it has four sub-sections and several clauses and sub-clauses. Parliament has considered the various situations in which the exigible income and the deductible income of the assessee is considered while computing the income of the assessee. For getting deduction, in our considered view, the assessee must also establish that the interest income earned by the assessee is from a co-operative society. As a matter of fact, in the case on hand, there is no dispute that it is not from a co-operative society registered under Kerala Co-operative Societies Act. The interest income earned from District co-operative bank/State co-operative bank, in the facts and circumstances of the case, do come within section 80P(2)(d). Therefore, the income constitutes income from other sources and the only eligible deduction is covered by section 80P(2)(d), viz., interest or dividend derived by the assessee from its investments with any other co-operative society. The source of interest income is from bank and treasury, interest income received from treasury be included in the computation of total income of the assessee. In other words, interest earned from treasury is registered under the Kerala inadmissible for deduction and interest income from co- operative societies Co-operative Societies Act are eligible for deduction. The contra consideration of the Commissioner of Income-tax (Appeals) and the Tribunal is incorrect and liable to be modified as stated above. Hence, it is held that the interest income earned by the assessee does not come within the ambit of section 80P(2)(a)(i) and permissible deduction of interest income is limited to co-operative societies/banks registered under Kerala Co-operative Societies Act under clause (d) of the Act and effect order on the above lines is made by the Assessing Officer. The questions are accordingly answered.