Avkar Urban Co-op Credit Society Ltd Vs ACIT (ITAT Surat)
Interest from Co-operative Bank Eligible for Section 80P(2)(d) Deduction: ITAT Surat Grants Relief to Credit Society
The Surat SMC Bench of the ITAT allowed the appeal of a co-operative credit society for AY 2018-19 and held that deduction under Section 80P(2)(d) is allowable on interest and dividend income earned from investments with a co-operative bank. The Assessing Officer had disallowed the deduction of ₹7.45 lakh (net claim ₹3.80 lakh) on the ground that interest from a co-operative bank does not qualify for deduction under Section 80P(2)(d). The CIT(A) upheld the disallowance.
The Tribunal noted that the interest income was received from a co-operative bank registered under the Co-operative Societies Act and relied on binding judgments of the Gujarat High Court, including Katlary Kariyana Merchant Sahkari Sarafi Mandali Ltd. and Sabarkantha District Milk Producers Union Ltd., which categorically held that interest received by a co-operative society from a co-operative bank qualifies for deduction under Section 80P(2)(d).
Observing that the lower authorities failed to follow the jurisdictional High Court decisions, the ITAT set aside the disallowance and allowed the assessee’s claim in full.
FULL TEXT OF THE ORDER OF ITAT SURAT
This is an appeal filed against the order dated 19-082025 passed by National Faceless Appeal Centre(NFAC), Delhi for assessment year 2018-19.






