Gajanan Nagari Sahakari Pat Sanstha Ltd. Vs ITO (ITAT Pune)
Section 80P Relief Survives: Co-operative Bank Interest Gets an Alternative Route
Denial of deduction under Section 80P(2)(a)(i) did not end the matter for a co-operative credit society earning interest from deposits with co-operative banks. In Shri Gajanan Nagari Sahakari Pat Sanstha Ltd. v. ITO, the Pune ITAT accepted the alternative claim under Section 80P(2)(d). However, it expressly restricted the total aggregate deduction to the amount originally claimed in the return, making this limitation an important part of the relief granted.
Background: Deduction of ₹76.54 Lakh Denied
The assessee was a co-operative credit society registered under the Maharashtra Co-operative Societies Act, 1961, engaged in accepting deposits from members and providing credit facilities to them.
For Assessment Year 2018-19, it filed its return on 29 September 2018, declaring total income of ₹3,38,810, after claiming a deduction of ₹76,53,839 under Section 80P(2)(a)(i).
The case was selected for scrutiny on issues concerning expenditure of a personal nature, investments, advances and loans, and deductions under Chapter VI-A. During assessment, the society furnished details of its members and disclosed interest income of ₹93,74,627 from deposits with co-operative banks.
The Assessing Officer examined the submissions and activities but held that the society was not eligible for the deduction claimed under Section 80P(2)(a)(i). The entire deduction of ₹76,53,839 was denied, and total income was assessed at ₹79,92,650.
