Laxmi Jyot Industrial Premises Co-op Society Limited Vs ACIT (ITAT Mumbai)
Assessee, a co-operative premises society, claimed deduction u/s 80P(2)(d) in respect of interest income of Rs.30.55 lakh earned on deposits placed with various co-operative banks. AO denied the claim holding that interest from co-operative banks is not eligible for deduction u/s 80P(2)(d). CIT(A) confirmed the disallowance.
ITAT reversed the lower authorities. Tribunal held that section 80P(2)(d) requires only two conditions — income should be by way of interest or dividend & it should be derived by a co-operative society from investments with any other co-operative society. A co-operative bank continues to be a co-operative society registered under the Co-operative Societies Act, even though it may not itself be eligible for deduction u/s 80P due to section 80P(4). Section 80P being a benevolent provision must be interpreted liberally. Reliance on Totgars was held to be misplaced, as that decision dealt with section 80P(2)(a)(i) and not section 80P(2)(d).
Accordingly, ITAT directed deletion of the addition & allowed deduction u/s 80P(2)(d) on interest earned from deposits with co-operative banks.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This is an appeal filed by the assessee against the order of the Ld. ADDL/JCIT(A)-Mysore, dated 12-08-2025, pertaining to Assessment Year (AY) 2018-19.
