Section 56 of the Income Tax Act

Income-tax Act, 2025: s.92

Section 56 of the Income-tax Act, 1961 corresponds to section 92 (Income from other sources) of the Income-tax Act, 2025.

Read section 92 of the 2025 Act

Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.

The decision most relied on for Section 56 is Totgars Co-operative Sale Society Ltd. v. ITO (322 ITR 283), cited in 1,283 of the 1,790 judgments on BharatTax that turn on this section.

Leading authorities on Section 56

Totgars Co-operative Sale Society Ltd. v. ITO
322 ITR 283 · 2010 · Supreme Court
1,283
citing judgments

The interest income earned by a cooperative society from investing its surplus funds in fixed deposits with banks is not "derived from" its eligible business activities and is taxable as "income from other sources" under Section 56, thus not qualifying for deduction under Section 80P.

Pr. CIT v. Totagars
395 ITR 611 · 2017 · High Court
1,074
citing judgments

Interest income earned by a cooperative society from surplus deposits or investments held with a cooperative bank is not eligible for deduction under Section 80P(2)(d) of the Act.

Mavilayi Service Co-operative Bank Ltd. v. CIT
431 ITR 1 · 2021 · Supreme Court
999
citing judgments

Section 80P(4) serves as a proviso to Section 80P(1) and (2), excluding only cooperative banks that are cooperative societies and possess an RBI license for banking business. Its purpose is to exclude cooperative banks operating like commercial banks that lend money to the public.

Tumkur Merchants Souharda Credit Cooperative Ltd. v. ITO
230 Taxmann 309 · 2015 · High Court
527
citing judgments

A cooperative society is eligible for deduction under Section 80P(2)(a)(i) if it is engaged in cooperative activities. It also clarifies the allowability of deduction under Section 80P(2)(d) for interest income received from investments made in cooperative banks, after duly considering the Supreme Court's decision in Totgars Co-operative Sale Society Ltd.

Citizen Co-operative Society Ltd. v. ACIT
397 ITR 1 · 2017 · Supreme Court
499
citing judgments

A co-operative credit society engaged in banking business with the general public, accepting deposits from non-members and advancing loans to non-members, is treated as a co-operative bank. Such a society falls under the exclusionary clause of Section 80P(4) and is not eligible for deduction under Section 80P(2)(a)(i).

Totgar's Co-operative Sale Society Ltd. v. ITO
188 Taxmann 282 · 2010 · Supreme Court
486
citing judgments

Interest income earned by a co-operative society from investments, particularly with co-operative banks, is not eligible for deduction under Section 80P as it is not attributable to the core business activities of the society and constitutes "other income", not "profits and gains of business".

CIT v. Andhra Pradesh State
200 Taxmann 220 · 2011 · High Court
348
citing judgments

Interest earned by a Co-operative Society from investing fixed deposits in banks is entitled to a deduction under Section 80P(2)(a)(i) of the Income-tax Act.

Pr. CIT v. Totagars Co-operative Sales Society
83 Taxmann.com 140 · 2017 · High Court
306
citing judgments

Interest income earned by a co-operative society from deposits or investments made in a co-operative bank is not eligible for deduction under Section 80P(2)(d) of the Income Tax Act, 1961, in view of Section 80P(4).

Tumkur Merchants Souharda Credit Co-op. Ltd. v. ITO
55 Taxmann.com 447 · 2015 · High Court
267
citing judgments

Interest income earned by a co-operative society from temporary deposits with other banks, when such deposits are made from its business funds, qualifies as business income eligible for deduction under Section 80P(2)(a)(i) and not as income from other sources.

Bangalore Club v. CIT
350 ITR 509 · 2013 · Supreme Court
247
citing judgments

The Supreme Court affirmed the doctrine of mutuality, holding that contributions received from and returned to members for a common purpose do not constitute taxable profits. However, income from transactions with non-members or interest earned from investments in external entities (like cooperative banks) may break the mutuality chain and be taxable under Section 56, falling outside the scope of Section 80P deductions.

Judgments on Section 56

The Kalkulam Co-Operative Credit Society Ltd., Kanyakumari vs. ITO, Ward-5, Nagercoil

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 1517/CHNY/2024[2020-21]Status: DisposedITAT Chennai24 Jul 2024AY 2020-21

Bench: Shri S.S. Viswanethra Ravi & Shri S.R. Raghunathaआयकर अपील सं./I.T.A. No.1517/Chny/2024 िनधा"रण वष"/Assessment Year: 2020-21 The Kalkulam Co-Operative Credit Vs. The Income Tax Officer, Ward 5, Nagercoil, 13B, 1St Floor, Society Ltd., No. 949, 1 Main Road, Thuckalay, Kanyakumari Dt. 629 175. Popular Building, Mead Street, Nagercoil 629 003. [Pan:Aabtt9232C] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri Harshavardhan, Advocate ""थ" की ओर से/Respondent By : Shri Aroon Prasad, Addl. Cit सुनवाई की तारीख/ Date Of Hearing : 22.07.2024 घोषणा की तारीख /Date Of Pronouncement : 24.07.2024 आदेश /O R D E R Per S.S. Viswanethra Ravi:

For Appellant: Shri Harshavardhan, AdvocateFor Respondent: Shri Aroon Prasad, Addl. CIT
Section 143(3)Section 144BSection 56Section 80P(2)(d)

Sree Kanyaka Mutually Aided Co-Op Thrift Credit and Marketg. Society Limited, Hindupur vs. Income Tax Officer, Ward 1, Hindupur

In the result, the appeal of the assessee is treated as partly allowed for statistical purposes

ITA 224/HYD/2024[2018-19]Status: DisposedITAT Hyderabad22 Jul 2024AY 2018-19

Bench: Shri Laliet Kumar, Hon’Ble & Shri Madhusudan Sawdia

For Appellant: Shri D. Shree Raksha, CAFor Respondent: Shri Shakeer Ahamed, DR
Section 143(3)Section 56Section 80PSection 80P(2)(a)

Shri Umiya Cooperative Credit Society Ltd., 1, Senetary Road, Kutchhi Patidar Vadi, Petlad Tal. Petlad Dist. Anand vs. Income Tax Officer, Ward-1(3)(1), Petlad

In the result, Ground No. 2 of the assessee’s appeal is allowed

ITA 277/AHD/2022[2017-18]Status: DisposedITAT Ahmedabad18 Jul 2024AY 2017-18

Bench: Smt. Annapurna Gupta & Shri Siddhartha Nautiyal

For Appellant: Shri S. N. Divatia, A.RFor Respondent: Ms. Saumya Pandey Jain, Sr. DR
Section 115BSection 56Section 68Section 80PSection 80P(2)(a)

Dtps Employees Co-Op Credit Society Limited Dahanu, Dahanu vs. Jurisdiction Ward 1, Palghar

ITA 1883/MUM/2024[2020-21]Status: DisposedITAT Mumbai18 Jul 2024AY 2020-21

Bench: Shri Satbeer Singh Godara & Shri Girish Agrawalassessment Year: 2020-21 Dtps Employees Co-Op Credit Jurisdiction Ward 1, Palghar Society Ltd. Dahanu, Shop No.7, Adani Township, Dahanu Thermal Power Station, Vs. Dahanu Road, Dahanu, Palghar, Maharashtra – 401608

For Appellant: Ms. Pallavi Limaye, C.A RevenueFor Respondent: Smt. Mahita Nair, Sr. DR
Section 143(3)Section 56Section 80PSection 80P(2)(a)Section 80P(2)(d)Section 80P(4)

Uday Jawahar Kotnis, Pune vs. Income Tax Officer, Pune

In the result, the appeal filed by the assessee is dismissed

ITA 1/PUN/2024[2017 - 2018]Status: DisposedITAT Pune10 Jul 2024

Bench: Shri R. K. Panda

Section 143(3)Section 156Section 2(27)Section 234ASection 270A(9)(a)Section 274

Govind Sharan Rawat, Jaipur vs. Assessing Officer, NFAC, Income Tax Officer, Ward-1(2), Jaipur

In the result, the appeal of the assessee stands allowed with no orders as to costs

ITA 590/JPR/2024[2020-21]Status: DisposedITAT Jaipur10 Jul 2024AY 2020-21

Bench: SHRI SANDEEP GOSAIN (Judicial Member)

For Appellant: Shri S.R. Sharma, CA &For Respondent: Mrs. Monisha Choudhary, Addl. CIT-DR
Section 143Section 56

Shri Sharanabasaveshwar Credit Souhard Sahakari Niyamit, Halingali vs. Income Tax Officer, Ward and Tps

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 596/BANG/2024[2020-21]Status: DisposedITAT Bangalore09 Jul 2024AY 2020-21

Bench: Shri Chandra Poojari & Shri Keshav Dubey

For Appellant: Sri.Monish Sowkar, AdvocateFor Respondent: Sri.Ganesh R.Gale, Standing Counsel
Section 143(3)Section 19Section 250Section 56Section 57Section 80Section 80PSection 80P(2)(a)Section 80P(2)(d)

Laxman Gore Shreshtha, Mumbai vs. Dy Commissioner of Income Tax, Circle-22(1), Mumbai

In the result, both the appeals of the assessee bearing ITA Nos

ITA 1909/MUM/2024[2013-14]Status: DisposedITAT Mumbai09 Jul 2024AY 2013-14

Bench: Shri Prashant Maharishi & Shri Anikesh Banerjee

For Appellant: Shri J.P. Bairagra& Ms. Rupa NandaFor Respondent: ShriManoj Kumar Sinha (SR.DR.)
Section 10Section 143(3)Section 147Section 151Section 250Section 57Section 80C

Laxman Gore Shreshtha, Mumbai vs. Deputy Commissioner of Income Tax, Circle 22(1), Mumbai

In the result, both the appeals of the assessee bearing ITA Nos

ITA 1908/MUM/2024[2012-13]Status: DisposedITAT Mumbai09 Jul 2024AY 2012-13

Bench: Shri Prashant Maharishi & Shri Anikesh Banerjee

For Appellant: Shri J.P. Bairagra& Ms. Rupa NandaFor Respondent: ShriManoj Kumar Sinha (SR.DR.)
Section 10Section 143(3)Section 147Section 151Section 250Section 57Section 80C

Income Tax Officer, Yavatmal vs. Yavatmal Dist. Co-Op. Bank Employee Co-Op. Pat Sanstha Ltd., Yavatmal

In the result, appeal filed by the Revenue’s is dismissed

ITA 359/NAG/2023[2015-16]Status: DisposedITAT Nagpur08 Jul 2024AY 2015-16

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: NoneFor Respondent: Shri Abhay Y. Marathe
Section 142(1)Section 143(2)Section 147Section 148Section 56Section 80P(2)(a)Section 80P(2)(d)

Mahaveera Credit Co-Operative Society Limited, Mangalore vs. Income Tax Officer, Ward-1(1), Mangalore

In the result, the appeal filed by the assessee is partly allowed

ITA 301/BANG/2024[2020-21]Status: DisposedITAT Bangalore08 Jul 2024AY 2020-21

Bench: Shri Chandra Poojari & Shri Keshav Dubeyassessment Year : 2020-21

For Appellant: Ms. Roopa Arun, AdvocateFor Respondent: Standing Counsel for Department
Section 250Section 58Section 80PSection 80P(2)(a)Section 80P(2)(d)

The Commercial Co.Op. Credit Soc. Ltd., Panchmahal vs. The Income Tax Officer, Ward-3(1)(2), Vadodara

The appeal of the assessee is allowed for statistical purposes

ITA 786/AHD/2023[2018-19]Status: DisposedITAT Ahmedabad05 Jul 2024AY 2018-19

Bench: MRS. ANNAPURNA GUPTA (Accountant Member), SHRI SIDDHARTHA NAUTIYAL (Judicial Member)

For Appellant: Shri Dhinal Shah, ARFor Respondent: Shri Vipul Chavda, Sr DR
Section 250Section 56Section 57

K 2080 P Kariampalayam Primary Agricultural Cooperative Credit Society, Coimbatore vs. Assessing Officer, Coimbatore

In the result, the appeal of the assessee is allowed for statistical purpose

ITA 856/CHNY/2024[2017-2018]Status: DisposedITAT Chennai05 Jul 2024AY 2017-2018

Bench: HON’BLE SHRI MANU KUMAR GIRI (Judicial Member), SHRI S.R. RAGHUNATHA (Accountant Member)

For Appellant: Shri. Maruthachalamoorthy, AdvocateFor Respondent: Shri. D. Hema Bhupal, IRS, JCIT
Section 143(3)Section 56

M/S. Gonikoppal Primary Rural Agricultural Credit So-Operative Society Limited, Kodagu vs. Income Tax Officer, Ward-1, Madikeri

ITA 1016/BANG/2024[2018-19]Status: DisposedITAT Bangalore04 Jul 2024AY 2018-19

Bench: Shri Waseem Ahmed & Shri Prakash Chand Yadavgonikoppal Primary Rural The Income Tax Officer Agricultural Credit Co-Op. Ward - 1, Madikeri Society Ltd. Vs. Main Road, Gonikoppal Virajpet Taluk, Kodagu 571213 Pan – Aaaag1109M (Appellant) (Respondent) Assessee By: Smt. Sunaiana Bhatia, Ca Revenue By: Shri Chinmay Anand Jain, Jcit-Dr Date Of Hearing: 02.07.2024 Date Of Pronouncement: 04.07.2024 O R D E R Per: Prakash Chand Yadav, J.M. This Appeal Filed By The Assessee Challenges The Din & Order No. Itba/Nfac/S/250/2004-25/1064689295(1) Of The National Faceless Appeal Centre, Delhi (Cit(A)) Dated 07.05.2024 Passed Under Section 250 Of The Income Tax Act, 1961 (The Act) In Respect Of Assessment Year (Ay) 2018-19. 2. The Brief Facts Of The Case Are That The Assessee Is A Primary Agricultural Credit Co- Operative Society Registered Under The Karnataka State Co-Operative Societies Act, 1959 & Engaged In Providing Credit Facilities To Its Members. It Has Filed Its Return Of Income (Roi) On 13.09.2018 Declaring An Income Of Rs. 1,41,320/-. The Case Of The Assessee Was Selected For Scrutiny & Proceedings U/S. 143(3) Of The Act Were Initiated By The Assessing Officer (Ao).

For Appellant: Smt. Sunaiana Bhatia, CAFor Respondent: Shri Chinmay Anand Jain, JCIT-DR
Section 143(3)Section 250Section 80P(2)(a)

Shri Neelakanteshwar Pattin Sahakari Sangh Niyamit, Guledgudd vs. ITO W(1) Bagalkot, Bagalkot

In the result, appeal filed by the assessee is allowed for statistical purposes

ITA 600/BANG/2024[2021-22]Status: DisposedITAT Bangalore03 Jul 2024AY 2021-22

Bench: Shri George George K & Shri Waseem Ahmedr Assessment Year : 2021-22 M/S. Shri Neelakanteshwar Pattina Sahakari Vs. Ito, Sangh Niyamit Guledgudd, Ward – 1, No. Ward No.4 Colleg Road, Bagalkot. Guledgudd – 587 203, Karnataka. Pan : Aawas 7201 C Appellant Respondent Assessee By : S/Shri. Deepak Gunashekar, Ca, Prasanna N. Urala, Advocate Revenue By : Shri. Ganesh R Ghale, Standing Counsel. Date Of Hearing : 30.05.2024 Date Of Pronouncement : 03.06.2024

For Appellant: S/Shri. Deepak Gunashekar, CAFor Respondent: Shri. Ganesh R Ghale, Standing Counsel
Section 143Section 250Section 56Section 57Section 80PSection 80P(2)(a)Section 80P(2)(d)

Alnavar Credit Souhardha Co-Operative Limited, Alnavar vs. Income Tax Officer, Ward-1(1), Hubli

ITA 738/BANG/2024[2020-21]Status: DisposedITAT Bangalore28 Jun 2024AY 2020-21

Bench: Smt. Beena Pillai & Shri Laxmi Prasad Sahuassessment Year : 2020-21

For Appellant: Ms. Shreeraksha, CAFor Respondent: Shri Ganesh R. Ghale, Standing Counsel
Section 56Section 80P(2)(a)Section 80P(2)(d)

Alankar Primary Agricultural Credit Co Operative Society, Alankar vs. Income Tax Officer, Ward-1, Puttur

ITA 814/BANG/2024[2020-21]Status: DisposedITAT Bangalore26 Jun 2024AY 2020-21

Bench: Smt. Beena Pillai & Shri Laxmi Prasad Sahuassessment Year : 2020-21

For Appellant: Shri Srikrishna Kantilia, CAFor Respondent: Shri Ganesh R. Ghale, Standing Counsel
Section 250Section 80P(2)Section 80P(2)(a)Section 80P(2)(d)

Yadagere Souharda Co-Operative Society Limited., Chikkamagaluru vs. Income Tax Officer, Ward-1, Chikkamagaluru

In the result, the appeal by the assessee is allowed for statistical purposes

ITA 444/BANG/2024[2018-19]Status: DisposedITAT Bangalore24 Jun 2024AY 2018-19

Bench: Smt. Beena Pillai & Shri Laxmi Prasad Sahuassessment Year : 2018-19

For Appellant: Shri Varun Bhat, CAFor Respondent: Shri V. Parithivel, Jt.CIT(DR)(ITAT), Bengaluru
Section 56Section 80PSection 80P(2)(a)

Irla Co-Op Hsg Soceity Ltd, Mumbai vs. Ward 25(2)(5), Mumbai

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 4269/MUM/2023[2016-17]Status: DisposedITAT Mumbai21 Jun 2024AY 2016-17

Bench: Shri Amarjit Singh & Shri Rahul Chaudhary, Irla Co-Op Hsg Society Vs. Ito, Ward 25(2)(5) Limited, 191/A, Prime Maharashtra – 400054 Mall Irla, Vile Parle (West) Mumbai – 400056 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aaaai4878F Appellant .. Respondent Appellant By : Pramod Parida Respondent By : H.M. Bhatt Date Of Hearing 13.05.2024 Date Of Pronouncement 21.06.2024 आदेश / O R D E R Per Amarjit Singh (Am): The Present Appeal Filed By The Assessee Is Directed Against The Assessment Order Dated 23.11.2018 Passed U/S 143(3) Of The Income Tax Act, 1961 For The Assessment Year 2016-17. The Assessee Has Raised The Following Grounds Before Us: “1. Disallowance U/S 43B- 61,01,040/- I) The Id. Cit(A) Erred In Confirming The Disallowance Of Statutory Liabilities Without Appreciating That The Same Had Been Paid Before The Due Date Of Filing Of Return U/S 139(1) & Further Erred In Holding That The Appellant, A Co-Op Housing Society (Chs), Is Doing Business Activity, Therefore, As Sec 438 Is Not Applicable On The Face It Being Eligible For The Benefit U/S 80P, The Disallowance Of Rs.61.01.040/- Is Uncalled For & The Same May Be Deleted Ii) Without Prejudice To Above, The Id Cit(A) Erred In Holding That The Concept Of Mutuality Does Not Apply To The Appellant Where There Is Close Nexus Of All Its Funds Flow Are Utilized Exclusively For The Benefit Of Its Members, Hence The Disallowance Made May Be Deleted As Consistency Needs To Be Respected. 2. Taxability U/S. 22 Or U/S. 56- Rental Or Hire Charges Rs.8,73,634/-

For Appellant: Pramod ParidaFor Respondent: H.M. Bhatt
Section 139(1)Section 143(2)Section 143(3)Section 22Section 24Section 43BSection 56Section 80P

Akbar Pasha Khadri Sayad, Nuzvid vs. Income Tax Officer, Ward-3(1), Vijayawada

In the result, appeal of the assessee is allowed for statistical purpose

ITA 38/VIZ/2024[2013-14]Status: DisposedITAT Visakhapatnam20 Jun 2024AY 2013-14

Bench: Shri Duvvuru Rl Reddy, Hon’Ble & Shri S Balakrishnan, Hon’Bleआयकर अपील सं./I.T.A.No.38/Viz/2024 (ननधधारण वर्ा/ Assessment Year : 2013-14) Akbar Pasha Khadri Sayad Vs. Income Tax Officer 1-146, Main Road Ward-3(1) Boravancha Vijayawada Nuzvid [Pan : Ebqps5611] (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent)

For Appellant: None (Shri K.Siva RamFor Respondent: Dr.Aparna Villuri, DR
Section 147Section 148Section 56Section 69A