Interest From Co-op Banks Fully Deductible U/s 80P(2)(d), Totgars Misapplied

DCIT Vs Larsen & Toubro Group Employees Co-op. (ITAT Chennai) The ITAT Chennai dismissed the Revenue’s appeal and upheld deletion of ₹2.00 crore disallowance, firmly holding that interest earned by a co-operative society from deposits with co-operative banks qualifies for deduction u/s 80P(2)(d). The assessee, an employees’ co-operative thrift & credit society, earned interest of ₹1.21 crore from Chennai Central Co-operative Bank and ₹79 lakh from George Town Co-operative Bank. The AO denied deduction by mechanically relying on Totgars (SC), treating the interest as taxable i...