Amrapur Vikas Seva Vs ITO (ITAT Pune)
The Pune Bench (SMC) of the ITAT held that interest income earned by a co-operative credit society from investments with co-operative banks / co-operative societies is eligible for deduction under section 80P(2)(d), and remanded the matter to the Assessing Officer for limited factual verification.
The assessee, a primary agricultural credit society, had claimed deduction u/s 80P(2)(d) on interest income earned from investments with the Kolhapur District Central Co-operative Bank and other co-operative entities. The Assessing Officer disallowed the deduction on the presumption that part of the interest was earned from “other banks”, and the CIT(A) confirmed the disallowance.
Before the Tribunal, it was contended that proper bifurcation of interest income was already available, showing that interest was largely earned from co-operative banks/societies, which squarely qualifies for deduction under section 80P(2)(d). Reliance was placed on binding precedents including Mavilayi Service Co-op Bank Ltd. (SC), Quepem Urban Co-op Credit Society Ltd. (Bom HC), and consistent ITAT rulings.
The Tribunal reiterated that the term “co-operative society” in section 80P(2)(d) includes co-operative banks, and therefore interest earned from investments with such entities is eligible for deduction. Since the Assessing Officer had not properly verified the bifurcation of interest income, the matter was remanded back for limited verification, with a direction to allow the deduction in accordance with law after due examination.
Accordingly, the appeal was allowed for statistical purposes.
FULL TEXT OF THE ORDER OF ITAT PUNE
The captioned appeal at the instance of assessee pertaining to the Assessment Year 2015-16 is directed against the order dated 25.07.2025 of National Faceless Appeal Centre, Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of the Assessment Order dated 13.03.2023 passed u/s.147 r.w.s.144 r.w.s.144B of the Act.
