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Facts
The assessee claimed a deduction of Rs. 20,79,895/- on account of interest income earned from Co-Operative banks under section 80P(2)(d) of the Income Tax Act. This deduction was disallowed by the Assessing Officer and upheld by the CIT(A). The assessee appealed the decision.
Held
The Tribunal noted that while co-operative banks may not be entitled to deduction under Section 80P(4), a co-operative society earning interest income from investments held with a co-operative bank would be entitled to deduction under Section 80P(2)(d). Following coordinate benches and its own previous order, the Tribunal decided to allow the deduction.
Key Issues
Whether the assessee is entitled to claim deduction of interest income earned from Co-Operative banks under section 80P(2)(d) of the Act.
Sections Cited
80P(2)(d), 250, 143(1), 57, 80P(4)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, MUMBAI BENCH “J(SMC
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI GAGAN GOYAL
Per : Narender Kumar Choudhry, Judicial Member:
This appeal has been preferred by the Assessee against the order dated 29.06.2024, impugned herein, passed by the Ld. ADDL/Joint Commissioner of Income Tax (Appeal) – 1, Visakhapatnam, under section 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the Assessment Year 2020-21.
Sr. Bank name Interest received in no. Rs. 01 Saraswat Co-op Bank 19,22,145/- 02 SVC Co-op Bank 32,983/- 03 Bharat Co-op Bank Mumbai 49,427/- Ltd. 04 Mumbai District Co-op Bank 81,112/- Ltd. Total 20,79,895/-
The Assessee by filing its return of income for the assessment year under consideration on dated 30/01/2021 claimed a deduction of Rs. 20,79,895/- on account interest income earned from Co- Operative banks u/s. 80P(2)(d) of the act. The return filed by the Assessee was processed vide intimation/ order dated 23/12/2021 by the CPC/Assessing officer. The CPC vide intimation dated 23/12/2021 u/s. 143(1) of the act disallowed the aforesaid deduction claimed by the Assessee.
The Assessee being aggrieved challenged the aforesaid addition before the Ld. Commissioner, who though affirmed decision of assessing officer in making the disallowance on account of deduction claimed by the assessee u/s. 80P(2)(d) of the act, however, directed the AO to grant deduction to the Assessee, as per provisions of section 57 of the act, to extent applicable after verification.
The Assessee being aggrieved within appeal before us.
The question emerge “whether the Assessee is entitled to claim deduction of Rs. 20,79,895/- on account interest income earned from Co-Operative banks u/s. 80P(2)(d) of the act or not”. We observe various coordinate benches of the tribunal in various M/s. Vasant Sagar Krishna Co-op Hsg Soc Ltd cases including in the case of Mumbai bench “SMC” in the case of Ashok Tower “D” Co. Op. Housing Society Ltd. Vs. Income Tax Officer (ITA No. 3501/M/2023) decided on 05/04/2024 has decided the identical issue as involved in this case by observing and holding as under:
“We are of the considered view, that though the co- operative bank pursuant to the insertion of Sub-section (4) of Sec. 80P would no more be entitled for claim of deduction under Sec. 80P of the Act, but however, as a co-operative bank continues to be a co-operative society registered under the Co- operative Societies Act, 1912 (2 of 1912), or under any other law for the time being enforced in any state for the registration of cooperative societies, therefore, the interest income derived by a cooperative society from its investments held with a co- operative bank, would be entitled for claim of deduction under Sec.80P(2)(d) of the Act”
We also observe as contained by the assessee that the then ADDL/JCIT (appeal) Agra in the Assessee’s own case for the Assessment Year 2021-22 decided on 29/03/2023 has also allowed the identical deduction claimed by the Assessee, by deleting the identical addition made by the AO.
Thus respectively, following the aforesaid judgment of the coordinate bench of the tribunal and considering the facts the Ld. ADDL./JCIT (appeal) Agra in the Assessee’s own case has allowed the identical deduction, we are inclined to allow deduction claimed by the Assessee, by deleting the addition made by the AO and affirmed by the ADDL/ JCIT commissioner. Consequently, the addition is deleted and claim of deduction u/s 80P(2)(d) of the Act, as claimed by the Assessee is allowed.
Order pronounced in the open court on 23.10.2024.