ITO Vs Ammunition Factory Co-op. Credit Society Limited (ITAT Pune)
The Society, a primary credit co-operative institution, had claimed deduction u/s 80P(2)(d) on interest & dividend earned from investments placed with the Pune District Central Co-operative Bank Ltd. The AO denied the deduction by relying on Totgars (SC) & taxed the income u/s 56.
CIT(A)/NFAC allowed the deduction following multiple ITAT decisions which held that a co-operative bank continues to be a co-operative society for the purpose of s.80P(2)(d), & interest/dividend received from such co-operative banks qualifies for deduction. The ITAT found that these issues were already settled by several Pune Bench rulings (including Gurudatta Gramin Bigersheti & Sharadchandra Nagari Sahakari Patsanstha) & reinforced by the Bombay High Court decision in Annasaheb Patil Mathadi Kamgar Sahakari Pathpedhi Ltd. (14-10-2019), which allowed identical claims.
The Tribunal held that Totgars (SC) does not apply because the assessee is not a marketing society but a credit co-operative society governed by the Maharashtra State Co-operative Societies Act, where investment with district co-operative banks is statutory. Respectfully following jurisdictional High Court & consistent ITAT precedents, the Tribunal upheld the deletion of additions & confirmed the allowability of deduction u/s 80P(2)(d) for both years.
Result: Both Revenue appeals dismissed; deduction u/s 80P(2)(d) sustained.
