Shree Mahaveer Dhamani Vikas Society Limited Vs ITO (ITAT Pune)
ITAT Pune held that interest income earned by cooperative society on deposits made out of surplus funds with cooperative banks qualifies for deduction under the provisions of section 80P(2)(a)(i). Accordingly, appeal of assessee allowed.
Facts- Assessee is a Primary Agricultural Co-operative Credit Society. Assessee had filed Return of Income electronically declaring total income of Rs.1,89,560/- after claiming deduction u/s. 80P(2)(a)(i) of Rs.36,08,160/-. The Assessee’s case was selected for scrutiny. AO disallowed Assessee’s claim for deduction 80P(2)(a)(i) of the Act, for interest earned from Sangli District Central Co-operative Bank. CIT(A) confirmed the addition. Being aggrieved, the present appeal is filed.
Conclusion- Hon’ble ITAT Pune Bench in the case of Kolhapur District Central Co-op. Bank Kanista Sevakanchi Sahakar Pat Sanstha Ltd. Vs. Income-tax Officer held that even the interest income earned by cooperative society on deposits made out of surplus funds with cooperative banks as well as schedule bank qualifies for deduction both under the provisions of section 80P(2)(a)(i) and section 80P(2)(d) of the Act, therefore, the reasoning given by the lower authorities on this issue cannot be accepted. Therefore, I direct the Assessing Officer to allow deduction u/s 80P(2)(a)(i) and 80P(2)(d) in respect of interest income earned from cooperative bank/scheduled bank.
