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Facts
The Revenue filed appeals against the order of the CIT(A) for A.Ys. 2015-16 and 2018-19. The core issue was whether the cooperative credit society was entitled to deduction under Section 80P(2)(d) of the Income Tax Act on interest income received. The Assessing Officer had denied this deduction.
Held
The Tribunal held that the cooperative society is entitled to deduction under Section 80P(2)(d) of the Income Tax Act on interest received. This decision was based on several previous pronouncements by the ITAT and High Courts, which established that interest income earned by cooperative societies on investments with cooperative banks is eligible for deduction.
Key Issues
Whether the cooperative credit society is entitled to deduction under Section 80P(2)(d) of the Income Tax Act on interest received from cooperative banks.
Sections Cited
80P(2)(d)
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Income Tax Appellate Tribunal, Mumbai “B” Bench, Mumbai.
Before: Shri Amit Shukla (JM) & Shri Omkareshwar Chidara (AM)
Both the appeals are filed by the Revenue against the order of the Ld. CIT(A) for A.Ys. 2015-16 & 2018-19. Since grounds of appeal are identical, they were heard together and disposed of by this common order, for the sake of convenience.
In the aforesaid Departmental appeals, even though several grounds of appeal were mentioned, crux of appeal is whether the aforesaid cooperative credit society is entitled for deduction u/s. 80P(2)(d) of the Income Tax Act (the Act for short) on the interest received by it. In this case, the learned Commissioner of Income Tax (Appeals) [the Ld. CIT(A) for short] passed an order stating that the appellant society is entitled for 80P(2)(d) deduction on the interest received by following various decisions of Hon'ble ITAT, Mumbai.
2 The Best Employees Cooperative Credit Society Ltd.
Aggrieved by the order of the Ld. CIT(A), the Revenue filed appeals before the ITAT, Mumbai relying on the Hon'ble Supreme Court decision of Totgars Cooperative Sale Society.
During the proceedings before the Bench, Ld. DR relied on the grounds of appeal and also assessment order where the appellant society was denied benefit of section 80P(2)(d) of the Act. In reply to the arguments of the Revenue, Ld. AR of the appellant society supported the orders of the Ld. CIT(A) and pleaded that the society is entitled for deduction u/s. 80P(2)(d) of the Act on the interest received from the cooperative banks. The Ld. AR of the appellant society has cited several decisions of the Coordinate Bench decisions of Mumbai and also the decision of Hon'ble Madras High Court in the case of Thorapadi Urban Cooperative Credit Society Limited. In view of these judicial pronouncements, Ld. AR of the appellant society argued that the appellant society is eligible for 80P(2)(d) deduction.
5. After hearing both sides, it is decided that the appellant society is entitled for deduction u/s. 80P(2)(d) of the Act. This issue was examined and decided in favour of the appellant in several decisions which are mentioned below :- i) M/s. Solitaire CHS Ltd. Vs. PCIT, dated 29.11.2019. ii) Land and Cooperative Housing Society Ltd. Vs. ITO, 46 CCH 52 (MUM) iii) M/s. C. Green Cooperative Housing Society Ltd. Vs. ITO, dated 31.3.2017. iv) Marvwanjee Cama Park Cooperative Housing Society Ltd. Vs. ITO (ITA No. 6139/Mum/2014 dated 27.9.2017. v) Kaliandas Udyog Bhavan Premises Cooperative Society Ltd. Vs. ITO.
6. The issue as to the allowability of deduction claimed by the appellant u/s. 80P(2)(d) is no longer res-integra as the issue was decided by the 3 The Best Employees Cooperative Credit Society Ltd. Coordinate Bench of the Tribunal in the case of Palm Court M. Premises Cooperative Society Limited in dated 9.9.2022 by settling the issue in favour of the appellant by distinguishing Judgment rendered by Hon'ble Supreme Court in the case of Totgars Cooperative Sales Society Ltd. Vs. ITO 188 Taxman 288 (SC) and after discussing the decision rendered by Hon'ble Bombay High Court and Hon'ble Gujarat High Court wherein it was clearly held that the interest income earned by the cooperative society on its investments with the cooperative banks would be eligible for deduction u/s. 80P(2)(d) of the Act. Similar decision was rendered by the Jurisdictional Mumbai ITAT in the case of Amore Commercial Premises Cooperative Society Ltd. Vs. CPC dated 17.1.2023. Similarly Hon'ble Gujarat High Court in the case of State Bank of India Vs. THE LD. CIT(A), 389 ITR 578, it was held that 80P(2)(d) specifically exempts interest earned from funds invested by the cooperative societies.
7. Following the above judicial pronouncements, it is hereby held that the appellant society is entitled for deduction u/s. 80P(2)(d) of the Act and the Revenue’s appeals are dismissed.
Order pronounced in the open court on 5th September, 2024.