Case Law Details
Konkan Education Society Sevak Sahakari Patpedhi Ltd Vs ITO (ITAT Pune)
Introduction: The case of Konkan Education Society Sevak Sahakari Patpedhi Ltd versus the Income Tax Officer (ITO), as adjudicated by the Income Tax Appellate Tribunal (ITAT) Pune, sheds light on the eligibility of deductions under Section 80P(2)(D) of the Income Tax Act. This article delves into the details of the case, the arguments presented, and the tribunal’s ruling.
Detailed Analysis: The appeals brought forth by the assessee center around the disallowance under Section 80P(2) of the Act. The crux of the matter lies in whether interest and dividend income earned by a cooperative society from investments made with another cooperative society is eligible for deduction. The appellant, a credit cooperative society engaged in providing credit facilities to its members, claimed deductions under Section 80P(2)(a)(i) and 80P(2)(d) of the Act for the relevant assessment years.
During the assessment, the lower authorities accepted the deduction under Section 80P(2)(a)(i) but denied it for the interest and dividend income earned from investments made with RDCC bank, citing precedents and interpretations of the law. However, the appellant contested this denial, arguing that the income was derived from a registered cooperative society and thus qualified for deduction under Section 80P(2)(d).
The tribunal meticulously analyzed the provisions of Section 80P(2)(d) and examined relevant judicial precedents, including the decision of the Hon’ble High Court of Karnataka in ‘PCIT Vs Totagars Co-op. Sale Society’. It observed that interest and dividend income derived from investments made with cooperative banks, such as RDCC, constitutes income eligible for deduction under Section 80P(2)(d). The tribunal emphasized that cooperative banks are fundamentally cooperative societies and held that the denial of deduction by the tax authorities was not in line with established legal principles.
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