Eldora Co-Operative Vs ITO (ITAT Mumbai)
Section 80P(2)(d) Deduction Allowed- Interest from Co-op Banks Eligible, AO Directed to Delete Addition
AO denied deduction u/s 80P(2)(d) to a co-operative housing society on interest income of ₹26.39 lakh earned from deposits with co-operative banks. CIT(A) upheld the disallowance.
ITAT held:
- Conditions of Sec 80P(2)(d) satisfied: Interest earned by a co-op society from investments with another co-op society- fully eligible
- Co-operative bank = co-operative society: Despite Sec 80P(4), co-op banks continue to be co-op societies for this purpose
- No additional restriction can be read into statute: Provision to be interpreted liberally (SC in Mavilayi case)
- Consistent judicial view in favour of assessee: Multiple ITAT decisions allow deduction on interest from co-op banks
Accordingly, AO directed to allow deduction & delete addition of ₹26.39 lakh
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [`Ld.CIT(A)’], dated 16-12-2025, pertaining to Assessment Year (AY) 2020-21.
2. The limited issue for consideration in the present matter relates to claim of exemption u/s. 80P(2)(d) of the Act by the assessee co-operative housing society in respect of interest incomes earned on deposits placed with co-operative banks.
