Pune Zilla Sahakari Dudh Utpadak Sangh Maryadit Vs DCIT (ITAT Pune)
ITAT Pune Allows Section 80P(2)(d) Deduction on Interest & Dividend from Co-operative Banks
The Pune Bench of the ITAT allowed the assessee-society’s appeals for AYs 2017-18 and 2018-19, holding that interest and dividend income earned from co-operative banks and other co-operative societies qualifies for deduction under section 80P(2)(d).
The Tribunal rejected the Revenue’s stand that a co-operative bank is not a co-operative society for the purposes of section 80P(2)(d). Relying on the Karnataka High Court in PCIT v. Totagar’s Co-operative Sale Society Ltd. (392 ITR 74) and the Gujarat High Court in PCIT v. Ambika Co-operative Credit Society Ltd. (2025), the ITAT clarified that Totagar’s (SC) dealt with section 80P(2)(a)(i) and is not applicable to claims under section 80P(2)(d).
Accordingly, the Tribunal directed deletion of the disallowance of ₹1.46 crore (interest and dividend) for AY 2017-18. For AY 2018-19, the 80P(2)(d) issue was allowed on the same reasoning, while the claim under section 80P(2)(c) was restored to the AO for de-novo verification due to lack of details.
FULL TEXT OF THE ORDER OF ITAT PUNE
These two appeals filed by the Assessee are against the separate orders of ld.Commissioner of Income Tax(Appeal)[NFAC], passed under section 250 of the Income Tax Act, 1961 both dated 30.07.2025 emanating from the separate assessment orders under section 143(3) of the Act, 1961 dated 19.12.2019 and 19.01.2021 for the A.Y.2017-18 and 2018-19 respectively. For the sake of convenience, both the appeals were heard together and decided in a common order. We treat appeal in ITA No.2194/PUN/2025 as lead case. The Assessee for A.Y.2017-18 has raised the following grounds of appeal :
“1] The learned CIT A NFAC erred in sustaining the rejection of the assessee society’s claim for deduction under section 80 P(2)(d) in respect of interest and dividend received from Cooperative banks.
2] The learned CIT A NFAC erred in sustaining the addition of Rs.1,18,71,993/- relating to interest on fixed deposits with Cooperative banks and Rs.28,19,001/- relating to dividend on shares of Cooperative banks.
3] The total addition of Rs.1,46,90,994/- under section 80P(2)(d) be deleted and the society’s assessed income be reduced to that extent.
4] Such other orders be passed as deemed fit and proper.
5] The appellant prays for leave to add to, modify or amend its Grounds of Appeal and lead evidence.”
Findings & Analysis:
