Khedbrahma Taluka Primary Teachers Co-operative Credit Society Limited Vs ITO (ITAT Ahmedabad)
ITAT Ahmedabad held that interest income earned by the assessee (i.e. Cooperative society) from deposits with Cooperative Banks shall be allowed as deduction u/s 80P(2)(d) of the Income Tax Act.
Facts- The assessee is Co-operative society having filed its return of income on 29.10.2018 declaring Nil Income after claiming deduction u/s 80P to the tune of Rs. 37,16,371/- . The AO issued statutory notices u/s 143(2) and 142(1), during the course of assessment proceedings. The assessee filed its reply, during the course of assessment proceedings. The AO while framing assessment made additions to the tune of Rs. 2,55,000/- by denying the deduction u/s 80P with respect to interest received by the assessee from The Sabarkantha District Central Co-operative Bank, Khedbrahma.
CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Held that interest income earned from deposits with Cooperative Banks shall be allowed as deduction u/s 80P(2)(d). However, similar directions as were given by Division Bench in the appellate order in the case of Sardar Patel Co-operative Credit Society Limited ( ITA No. 525 & 526/Ahd/2023) are now given by us to the AO to verify that the entity from whom the interest income of Rs. 2,55,000/- is claimed to have been earned by the assessee namely The Sabarkantha District Central Co-operative Bank, Khedbrahma which is claimed to be a Co-operative societies is duly registered under the Cooperative Societies Act or under the State Act , and to this limited extent, we are directed AO to verify the facts before granting relief to the assessee. The appeal of the assessee is allowed as indicated above. We order accordingly.
