Bella Vista Co-operative Housing Society Limited Vs ITO (ITAT Mumbai)
80P(2)(d) Deduction Allowed on Interest from Co-operative Bank: ITAT Mumbai Grants Relief to Housing Society
Mumbai ITAT allowed the appeal of the Assessee-society and directed deletion of the addition of ₹73,210 made by denying deduction u/s 80P(2)(d).
The Assessee, a co-operative housing society, had earned interest income on deposits placed with Thane Bharat Sahakari Bank Ltd., a co-operative bank registered under the Maharashtra Co-operative Societies Act, 1960, and claimed deduction u/s 80P(2)(d). The CPC, while processing the return u/s 143(1), denied the deduction, which was later sustained by the CIT(A).
The Tribunal held that section 80P(2)(d) lays down only two conditions—(i) the Assessee must be a co-operative society, and (ii) interest income must be derived from investments with any other co-operative society. Once these conditions are satisfied, no further restriction can be read into the provision. It was undisputed that a co-operative bank continues to be a co-operative society for this purpose.
Relying on the Supreme Court ruling in Mavilayi Co-operative Bank Ltd. and a consistent line of Mumbai ITAT decisions, the Bench reiterated that section 80P is a benevolent provision and must be interpreted liberally. The Tribunal also distinguished Totgar’s (SC), holding that it dealt with section 80P(2)(a)(i) and not section 80P(2)(d).
Accordingly, the ITAT set aside the order of the CIT(A), directed the AO to allow deduction u/s 80P(2)(d), and deleted the addition in full. The appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This is an appeal filed by the assessee against the order of the Ld.ADDL/JCIT(A)-3, Bengaluru, dated 26-09-2025, pertaining to Assessment Year (AY) 2020-21.
