Karad Urban Sevak Vs ITO (ITAT Pune)
The ITAT, Pune (SMC) held that interest income earned by a co-operative society from deposits with Co-operative Banks qualifies for deduction u/s 80P(2)(d). In this case, the AO disallowed ₹39.69 lakh being interest from deposits with Satara District Central Co-op Bank Ltd. and Karad Urban Co-op Bank Ltd., which was upheld by NFAC.
The Tribunal reiterated the settled position that Co-operative Banks are essentially Co-operative Societies, and therefore interest derived from investments with them falls squarely within s.80P(2)(d). Relying on a catena of Pune Bench decisions (including Annapurna Nagari Sahakari Patsanstha Maryadit), the Bench held that the issue is no longer res integra.
Accordingly, the disallowance was deleted and the AO was directed to allow deduction of ₹39,69,439 u/s 80P(2)(d). With this finding, other grounds became academic. The appeal was allowed in full.
FULL TEXT OF THE ORDER OF ITAT PUNE
The captioned appeal at the instance of assessee pertaining to the Assessment Year 2020-21 is directed against the order dated 24.10.2025 of National Faceless Appeal Centre, Delhi (NFAC) passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Assessment Order dated 09.09.2022 passed u/s.143(3) r.w.s.144B of the Act.
