Sambhau Tirth Co Operative Housing Society Ltd. Vs DCIT (ITAT Mumbai)
In Sambhau Tirth Co-operative Housing Society Ltd. vs DCIT, the Income Tax Appellate Tribunal (ITAT), Mumbai, adjudicated appeals for Assessment Years 2015–16 and 2017–18 involving two primary issues: eligibility of deduction under Section 80P(2)(d) on interest earned from co-operative banks, and classification of income from hoardings.
The Assessing Officer (AO) had disallowed deduction of ₹13,58,165 under Section 80P(2)(d), invoking Section 80P(4) on the basis that co-operative banks are excluded from the scope of deduction. The AO also treated ₹66,30,000 received as hoarding charges as “Income from Other Sources,” thereby denying standard deduction under Section 24(a). These findings were upheld by the Commissioner of Income Tax (Appeals).
Before the Tribunal, the assessee contended that the interest income was derived exclusively from co-operative banks and qualified for deduction under Section 80P(2)(d), which allows deduction on interest received from another co-operative society. The Tribunal noted that the issue is settled by Supreme Court decisions, including Kerala State Cooperative Agricultural and Rural Development Bank Ltd. and Annasaheb Patil Mathadi Kamgar Sahakari Pathpedi Ltd., which held that co-operative banks are to be treated as co-operative societies for the purpose of Section 80P. It was observed that Section 80P(4) does not negate the eligibility where the income is received from a co-operative society.
