Ahmedabad Co-operative Department Stores Ltd. Vs DCIT (ITAT Ahmedabad)
The appeals before the Income Tax Appellate Tribunal Ahmedabad were filed by Ahmedabad Co-operative Department Stores Ltd. against orders passed by the Commissioner of Income Tax (Appeals), NFAC, Delhi for Assessment Years 2018-19 and 2020-21. The Tribunal dealt primarily with the issue of deduction under Section 80P(2)(d) of the Income-tax Act, 1961 in respect of interest income earned from deposits with co-operative banks and dividend income received from co-operative institutions.
The assessee, a co-operative departmental store, was engaged in running departmental and medical stores at Ahmedabad and Gandhinagar. It also operated an Indian Oil gas agency and acted as a collection centre for Torrent Power Ltd. For Assessment Year 2018-19, it filed its return declaring taxable income of ₹38,11,600 after claiming deduction under Section 80P amounting to ₹2,91,93,822.
The Assessing Officer completed assessment under Sections 143(3) read with 144B and made various additions, including disallowance of deduction under Section 80P in relation to interest income from fixed deposits with Gujarat State Co-operative Bank Ltd. and Ahmedabad District Co-operative Bank Ltd., as well as dividend income.
Before the Tribunal, the assessee relied upon the judgment of the Gujarat High Court in PCIT v. Ashwinkumar Arban Co-Operative Society Ltd. The Gujarat High Court had held that deduction under Section 80P(2)(d) is available to co-operative societies in respect of interest earned from investments made with co-operative banks because co-operative banks are themselves co-operative societies.
