LA Royal Co-Operative HSG SOC Ltd. Vs Assessing Officer (ITAT Mumbai)
Assessee Co-op Housing Society earned interest of ₹1.03 lakh from deposits with Maharashtra State Co-operative Bank and claimed deduction u/s 80P(2)(d). CPC disallowed the claim u/s 143(1), which was upheld by CIT(A).
ITAT held that:
- Issue is squarely covered by consistent ITAT rulings (Pathare Prabhu / Kaliandas etc.)
- Interest earned from investments with a co-operative bank qualifies for deduction
- Sec 80P(4) restricts deduction only to co-operative banks claiming deduction, not to societies earning interest
Tribunal further noted:
- Co-op bank continues to be a co-operative society u/s 2(19)
- In case of conflicting HC views, favourable interpretation to assessee must be adopted (Vegetable Products principle)
Accordingly:
- Disallowance deleted
- Deduction u/s 80P(2)(d) allowed
FULL TEXT OF THE ORDER OF ITAT MUMBAI
This appeal has been preferred by the Assessee against the order dated 24.12.2025, impugned herein, passed by Ld. Commissioner of Income Tax (Appeals) ADDL/JCIT (A) – 1, Jaipur [in short Ld. Commissioner] u/s 250 of the Income Tax Act, 1961, [in short ‘the Act’] for the A.Y. 2021-22.
2. In the instant case, the Assessee has earned the interest income of Rs.1,03,363/- on fixed deposit made with the MAHARASHTRA STATE COOPERATIVE BANK – Kandivali (W) which was claimed being exempt by the Assessee, however, the same were disallowed by the CPC vide intimation/order dated 19.10.2022 u/s 143(1) of the Act.
