SISODARA VIBHAG VIVIDH KARYAKARI SAHAKARI MANDLI LTD.,NA vs. ARIVS.ITO, WARD-5, NAVSARI

Facts

The assessee, a primary cooperative credit society, challenged the denial of deduction under Section 80P(2)(d) for interest and dividend income received from Valsad District Central Co-op Bank Ltd. The Assessing Officer and CIT(A) had made additions totalling Rs.9,49,939/-, Rs.1,29,864/-, and Rs.8,20,075/- to the income, based on their interpretation of Section 80P(4). The assessee contended that Section 80P(4) withdrew exemption for co-op banks, not primary co-op credit societies earning income from other co-op banks.

Held

The Tribunal, relying on consistent decisions of its bench and jurisdictional High Court judgments, held that interest and dividend income earned by primary co-operative societies from other co-operative banks are eligible for deduction under Section 80P(2)(d) of the Act. It directed the Assessing Officer to delete the disallowed additions, finding the issue squarely covered by precedents.

Key Issues

Whether a primary co-operative credit society is eligible for deduction under Section 80P(2)(d) of the Income Tax Act for interest and dividend income received from another co-operative bank, considering the scope of Section 80P(4).