Case Law Details
Annapurna Nagari Sahkari Vs ITO (ITAT Pune)
The appeal concerned Assessment Year 2013-14 and arose from the order of the National Faceless Appeal Centre passed under Section 250 of the Income-tax Act against an assessment framed under Sections 147, 144 and 144B. At the outset, the assessee did not press Grounds Nos. 1 to 4, which were dismissed as not pressed. The surviving issue in Grounds Nos. 5 to 8 was whether the assessee was entitled to deduction under Section 80P(2)(d) on interest income of ₹1,02,95,103 earned from deposits and investments with Cooperative Banks. The assessee submitted that the issue was covered by the Tribunal’s decision in its own case for Assessment Year 2020-21. The Revenue contended that the assessee had not furnished the necessary details before the lower authorities and sought restoration of the matter to the Assessing Officer. The Tribunal noted that the Assessing Officer had accepted that the interest income was earned from deposits with Cooperative Banks and observed that the allowability of deduction under Section 80P(2)(d) on such interest was no longer res integra. Following its decision in the assessee’s own case and earlier coordinate bench decisions holding that Cooperative Banks are basically Cooperative Societies for the purpose of Section 80P(2)(d), the Tribunal held that the assessee was entitled to deduction of ₹1,02,95,103. The findings of the CIT(A) on merits were set aside, Grounds Nos. 5 to 8 were allowed, Ground No. 9 was held to be general in nature requiring no adjudication, and the appeal was partly allowed.
FULL TEXT OF THE ORDER OF ITAT PUNE
The captioned appeal at the instance of assessee relating to A.Y. 2013-14 is directed against the order dated 09.12.2024 framed by National Faceless Appeal Centre, Delhi u/s.250 of the Income-tax Act, 1961 (in short ‘the Act’) arising out of Assessment Order dated 25.03.2022 passed u/s.147 r.w.s.144 r.w.s.144B of the Act.
2. At the outset, Ld. Counsel for the assessee requested for not pressing the legal issues raised in Grounds of appeal No. 1 to 4 and the same are dismissed as ‘Not pressed’. In remaining Grounds 5 to 8, the only issue is that ld.CIT(A) has not allowed the deduction u/s.80P(2)(d) of the Act for the interest income of Rs.1,02,95,103/-earned on deposits/investments with Cooperative Banks.
3. Counsel for the assessee submitted that the issue stands squarely covered in favour of the assessee by plethora of decisions and referred to the decision of this Tribunal in assessee’s own case for A.Y. 2020-21 in ITA No.2471/PUN/2024 order dated 24.03.2025.
4. On the other hand, Ld. Departmental Representative submitted that assessee failed to furnish any details before the lower authorities and the matters needs to be restored to the file of ld. Assessing Officer.
5. We have heard the rival submissions and perused the record placed before us. There is no dispute to the fact that assessee has earned interest income of Rs.1,02,95,103/-from deposits/investments with Cooperative Banks. This fact has been accepted by the Assessing Officer in the assessment order also. Admittedly, assessee has not filed the requisite details before ld.CIT(A). We however considering the fact that the issue regarding allowability of deduction u/s.80P(2)(d) of the Act for the interest earned from Cooperative Banks is no longer res integra as the very same issue has been decided by this Tribunal in catena of decisions and in assesse’s own case for A.Y. 2020-21 holding that the assessee is eligible for deduction u/s.80P(2)(d) of the Act as the Cooperative Banks are basically Cooperative Societies. For the sake of brevity, the finding given in ITA No.2471/PUN/2024 is reproduced below :
“7. We have heard both the sides and perused the record placed before us. In the instant case, the Assessing Officer disallowed the interest income of Rs.1,63,98,998/- earned out of the Fixed deposits/Investments made with Cooperative Banks treating the same as Income from Other Source. Ld.CIT(A) dismissed the appeal in limine without discussing anything on merits of the issues and on the ground that the assessee has not provided plausible explanation for admission of additional evidences.
8. Section 80P(2)(d) of the Act provides that the sum received in respect of any income by way of interest or dividend derived by Cooperative Society from its investment with any other Cooperative Society, the whole of such income is eligible for deduction u/s.80P of the Act. we find that this issue is no more res integra as the Coordinate Benches of this Tribunal has been consistently holding that the interest income earned out of the FDs/Investments kept with Cooperative Banks is allowable u/s.80P(2)(d) of the Act. We find that this Tribunal in case of Kolhapur District Central Co-op. Bank Kanista Sevakanchi Sahakar Pat Sanstha Ltd., Vs. ITO in ITA No.1365/PUN/2023, dated 01.01.2024 dealing with similar issue after placing reliance on another decision of this Tribunal in the case of The Ugar Sugar Works Kamgar & Dr. Shirgaokar Shaikshanik Trust Nokar Co-op Credit Society vs. ITO in ITA No.84/PAN/2018, dated 27.05.2022 has held that the interest earned from deposits with Cooperative Banks are also eligible for deduction u/s.80P(2)(d) of the Act as Cooperative Banks are basically Cooperative Societies only but have turned into Bank on getting necessary banking license.
9. Respectfully following the above referred decisions taking consistent view along with considering the facts of the case, where the assessee made investment with the Cooperative Banks we hold that the assessee is eligible for deduction u/s.80P(2)(d) of the Act for the interest income earned from Cooperative Banks at Rs.1,63,98,998/-. Findings of the ld. CIT(A) is set-aside and the Assessing Officer is directed to allow the claim made by the assessee. Effective grounds of appeal raised by the assessee are allowed.”
6. Respectfully following the same, we hold that deduction of Rs.1,02,95,103/- u/s.80P(2)(d) of the Act claimed by the assessee on the interest earned from deposits/Investments with Cooperative Banks deserves to be allowed. Relevant finding of ld.CIT(A) on merits is set aside and grounds of appeal No.5 to 8 raised by the assessee are allowed.
7. Ground No.9 raised by the assessee is general in nature and needs no adjudication.
8. In the result, appeal of the assessee is partly allowed.
Order pronounced on this 07th day of May, 2025.
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