Interest earned by co-operative society from deposit with co-operative banks eligible for deduction u/s 80P(2)(d)

Gautam Dhan Co-op Housing Society Ltd Vs ITO (ITAT Mumbai)

ITAT Mumbai held that deduction u/s 80P(2)(d) of the Income Tax Act is duly available to co-operative society on the interest income/dividend received/earned from deposits with the co-operative banks.

Facts- The assessee is a Housing cooperative society and has filed the return of income for the A.Y 2019-20 disclosing a total income of Rs. Nil after claiming deduction u/s 80P(2)(d) of the Act of 1,58,305/-and setoff of loss of Rs1,20,750/-.

The return of income was processed u/s 143(1) of the Act. Whereas the AO/CPC has denied the claim of setoff of loss and has not allowed deduction of claim u/s 80P(2)(d) of the Act as the cooperative bank is an urban commercial bank and does not fall under the purview of cooperative society referred in the Sec. 80P(2)(d) of the Act and therefore the interest income from cooperative banks has to be taxed under income from other sources and assessed the total income of Rs.2,79,060/- Further the assessee has filed the rectification petition u/s. 154 of the Act and was rejected.

Aggrieved by the rectification order, the assessee has filed an appeal before the CIT(A), whereas the CIT(A) has considered the grounds of appeal, submissions of the assessee and findings of the A.O has granted relief in other grounds of appeal and has sustained the disallowance u/s. 80P(2)(d) of the Act and partly allowed the assessee appeal. Aggrieved by the order of the CIT(A), the assessee has filed an appeal with the Hon’ble Tribunal.

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