Raj Crystal Co-op. Housing Society Ltd. Vs Asst. Director of Income Tax (ITAT Mumbai)
The appeal before the Mumbai Bench of the Income Tax Appellate Tribunal Mumbai arose from an order passed by the National Faceless Appeal Centre under Section 250 of the Income-tax Act, 1961 for Assessment Year 2021-22. The assessee, a co-operative housing society, had claimed a deduction of ₹4,85,800 under Section 80P(2)(d) in respect of interest income earned from fixed deposits maintained with Saraswati Co-operative Bank. The return of income was filed on 18 October 2021, but the claim was disallowed by the Assessing Officer through an intimation issued under Section 143(1) dated 19 October 2022. The first appellate authority upheld the disallowance, prompting the assessee to approach the Tribunal.
The Tribunal examined the material on record and noted that the interest income in question was earned from deposits with a co-operative bank. The authorities below had denied the deduction on the ground that interest earned from co-operative banks was not eligible for deduction under Section 80P(2)(d). The Tribunal observed that the issue was not res integra and had already been decided in favour of assessees by several judicial authorities, including coordinate benches of the Tribunal.
Reliance was placed on the decision of the coordinate bench in Pathare Prabhu Co-operative Housing Society Ltd. vs. ITO, where an identical issue was examined in detail. In that decision, the Tribunal had analysed the scope of Section 80P(1) and Section 80P(2)(d), which provides for deduction of income by way of interest or dividends derived by a co-operative society from its investments with any other co-operative society. It was held that two conditions are required to be satisfied: the income should be by way of interest or dividend, and it should be derived from investments with another co-operative society.
