ITAT allows section 80P(2)(d) deduction for interest income earned from cooperative banks

Totgars Co-operative Sale Society Ltd. Vs ACIT (ITAT Bangalore)

The case of Totgars Co-operative Sale Society Ltd. vs. ACIT revolves around the interpretation and application of Section 80P(2)(d) of the Income Tax Act, 1961, concerning the eligibility of cooperative societies to claim deductions on interest income earned from cooperative banks.

Background and Legal Context

Totgars Co-operative Sale Society Ltd. (the assessee) is a cooperative society registered under the Karnataka Cooperative Societies Act, 1959. Its primary activities include marketing agricultural produce and providing credit facilities to its members. The dispute arose when the Assessing Officer (AO) disallowed the deduction claimed under Section 80P(2)(d) of the Act on interest income received from cooperative banks. The AO’s contention was that such income did not qualify for the deduction under the provisions of the Act.

Assessment and Appeal Proceedings

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