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Facts
The assessee, a co-operative housing society, claimed deduction under section 80P(2)(d) of the Income Tax Act for interest income earned from co-operative banks. The Assessing Officer disallowed this claim, a decision upheld by the CIT(A), relying on a Karnataka High Court judgment.
Held
The Tribunal noted that similar issues have been decided in favor of the assessee by referring to decisions of the Kerala High Court and previous ITAT orders, allowing the claim for deduction of interest income.
Key Issues
Whether the interest income earned by a co-operative housing society from co-operative banks is eligible for deduction under Section 80P(2)(d) of the Income Tax Act.
Sections Cited
143(3), 80P(2)(d)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘D ‘ BENCH
Before: SHRI AMIT SHUKLA & SHRI GAGAN GOYAL
The aforesaid appeal has been filed by assessee against order dated 28.8.2023, passed by the National Faceless Appeal Centre (NFAC), Delhi for the quantum of assessment passed u/s. 143(3) of the Income Tax Act, 1961 (‘the Act’) for Assessment Year (AY) 2016- 17. The only issue raised is regard to addition of Rs.50,16,338/-
The Mangalorean Garden Homes Co-op Hsg. Soc. Ltd.. made by the Learned Assessing Officer (Ld. AO) on account of the dis-allowance of deduction u/s. 80P(2)(d) of the Act.
The assessee is a co-operative housing society having income from Citizen Credit Cooperative Bank Ltd., Saraswat Co-operative Bank Ltd. and Maharashtra State Co-operative Bank Ltd. The Ld. AO noted that the assessee has an interest of Rs.50,16,338/- on bank fixed deposits and savings account, which was claimed as exempt u/s. 80P(2)(d) received from various co-operative societies and banks.
Accordingly, the Ld. AO relying upon the decision of Hon’ble Karnataka High Court in the case of Principal Commissioner of Income Tax, Hubballi vs. Totagars Co-operative Sale Society (2017) 83 taxmann.com 140 (Karnataka) disallowed the claim u/s. 80P(2)(d). The Learned CIT(A) too has confirmed the said addition following the same judgment of Hon’ble Karnataka High Court.
4. Before us it has been brought on record that this issue has come before the Tribunal in several cases wherein after discussing the decision of Hon’ble Karnataka High Court, claim of section 80P (2)(d) has been allowed interest received from co-operative banks of the co-operative societies. For sake of ready reference, the decision of ITAT order No. 1195/Mum/2023, dated 10.7.2023, in case of Rustomjee Aspiree Premises Co-op. Soc. Ltd., wherein the Tribunal after referring to various decisions has allowed the claim of 2
The Mangalorean Garden Homes Co-op Hsg. Soc. Ltd.. deduction. Mostly according to the decision of Hon’ble Kerala High Court in the case of PCIT vs. Percoorkada Services Company Bank Ltd. (2022) 442 ITR 141 (Kerala), the claim of deduction of interest income is allowed.
In the result, appeal of the assessee is allowed.
Order pronounced on 29th February, 2024