Case Law Details
Ashoka Palace Co-op. Hsg. Soc. Ltd. Vs ITO (ITAT Mumbai)
The issue whether interest income derived from deposits with cooperative banks is eligible for deduction under section 80P(2)(d) of the Act or not has been considered by Tribunal in catena of decisions. The Co-ordinate Bench in the case of Kaliandas Udyog Bhavan Premises Co-op Society Ltd. Vs. ITO, 94 taxmann.com 15 (Mumbai) after considering various decisions by Hon’ble High Courts and the Tribunal and the provisions of the Act, has held that interest income derived by a co-operative society from investments with a co-operative bank, would be entitled for deduction under section 80P(2)(d) of the Act.
Hon’ble Karnataka High court in the case of PCIT vs. Totagars, Cooperative Sale Society 392 ITR 74 has held that for the purpose of section 80P(2)(d) of the Act, co-operative bank should be considered as cooperative society. Similar view has been taken by the Hon’ble Gujarat High court in the case of Surat Vankar Sahakari Sangh Ltd. vs. ACIT, 421 ITR 134.
The judgment rendered by Hon’ble Apex Court in the case of Totagars Co-operative Sale Society Ltd. Vs. ITO 188 Taxman 282 on which CIT(A) has placed reliance to dislodge the claim of assessee is also considered. The facts in the said decision are distinguishable, therefore, the ratio laid down in said decision would not apply to the facts of present case. Therefore, following the decision of Hon’ble Karnataka High Court in the case of Totagars Co-operative Sale Society Ltd.(supra) and the decision in the case of Hon’ble Gujarat High Court in the case of Vankar Sahakari Sangh (supra), the deduction claimed by the assessee under section 80P(2)(d) of the Act in respect of interest derived from investments with the cooperative banks is allowed.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
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