Chitrapur Co-Operative Housing Society Limited Vs ITO (ITAT Mumbai)
Interest from Co-operative Bank FDs Qualifies for Section 80P(2)(d) Deduction: Mumbai ITAT
In The Chitrapur Co-operative Housing Society Ltd. v. ITO, the issue was whether interest earned by a co-operative housing society from fixed deposits maintained with co-operative banks was eligible for deduction under section 80P(2)(d).
The first appellate authority had denied the deduction. Before the Tribunal, the assessee relied on the Mumbai ITAT’s orders in its own cases for AYs 2021-22 and 2023-24, where the identical issue had already been decided in its favour.
Following those orders and the decision in Premium Tower Co-operative Housing Society Ltd. v. CIT, the Tribunal held that interest received from investments with a co-operative bank qualifies for deduction under section 80P(2)(d).
The Tribunal accordingly directed the Assessing Officer to allow the entire deduction claimed on interest from fixed deposits with co-operative banks and allowed the society’s appeal.
List of Cases Discussed / Relied Upon
- Chitrapur Co-Operative Housing Society Limited Vs ITO (ITAT Mumbai)
- Premium Tower Co-operative Housing Society Ltd. v. CIT
- Totagars Cooperative Sale Society
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal is filed by the assessee against the order of the Additional/Joint Commissioner of Income Tax (Appeals)-3, Bangalore, dated 29.10.2025 for the assessment year 2022-23 in denying deduction claimed u/s 80P(2)(d) on the interest income earned on FDs with cooperative banks.
2. Learned Counsel for the assessee, at the outset, submitted that the issue is squarely covered in assessee’s own case by the order of the Tribunal for the assessment years 2021-22 and 2023-24 in ITA Nos. 9139 and 9140/Mum/2025, dated 24.03.2026. Learned Counsel referring to the said decision of the Tribunal submitted that the Tribunal after analysing various decisions including the decision of the Hon’ble Supreme Court in the case of Totagars Cooperative Sale Society, (2010) 323 ITR 283 (SC), held that the assessee is entitled to deduction u/s 80P(2)(d) of the Act in respect of interest income earned from cooperative banks.
3. On the other hand, learned DR placed reliance on the orders of the authorities below.
4. Heard rival contentions, perused the orders of the authorities below and the decisions relied upon. On perusal of the order of the Tribunal in assessee’s own case in ITA Nos. 9139 and 9140/Mum/2025, dated 24.03.2026, we find that the issue in appeal is squarely covered in favour of the assessee, wherein the Tribunal following the decision of the coordinate bench in the case of M/s. Premium Tower Cooperative Housing 05-2023 held that the assessee is entitled for deduction u/s 80P(2)(d) of the Act on the interest income earned on FDs with cooperative banks.
5. Thus, respectfully following the above decision, we direct the Assessing Officer to allow deduction u/s 80P(2)(d) of the Act in respect of interest income earned on FDs with cooperative banks. The grounds raised by the assessee are allowed.
6. In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 21/08/2026
