Belgaum Coal & Coke Consumer Co-Operative Association Ltd. Vs ITO (ITAT Panaji)
Income Tax Appellate Tribunal (ITAT) Panaji recently ruled on an appeal by Belgaum Coal & Coke Consumer Co-operative Association Ltd. against the Income Tax Officer (ITO). The case concerned tax deductions under Sections 80P(2)(d) and 80P(2)(e) of the Income Tax Act, 1961. The appeal was directed against an order issued by the Commissioner of Income Tax (Appeals), Belagavi, which upheld the Assessing Officer’s (AO) decision to disallow deductions claimed by the assessee for the assessment year 2010-11. The tribunal’s ruling provides clarity on the eligibility of cooperative societies for tax deductions on interest income from cooperative banks and rental income from leased industrial sheds.
The primary issue in the appeal was the AO’s disallowance of deductions under Section 80P(2)(d), which allows cooperative societies to claim deductions on interest income earned from investments with other cooperative societies. The AO, citing the 2007 amendment under Section 80P(4), held that cooperative banks do not qualify as cooperative societies for tax exemption purposes. However, the ITAT, relying on judicial precedent, ruled that cooperative banks fall within the definition of “cooperative society” under Section 2(19) of the Act. The tribunal cited the Mumbai ITAT ruling in M/s Solitaire CHS Ltd vs. PCIT (ITA No. 3155/Mum/2019), which upheld similar deductions, and concluded that the assessee was entitled to the deduction under Section 80P(2)(d).
