Clover Everest World Co-operative Housing Society Limited Vs ITO (ITAT Mumbai)
Interest from Co-operative Bank Still Qualifies for 80P(2)(d): ITAT Deletes CPC/AO Disallowance
Assessee, a co-operative housing society, claimed deduction u/s 80P(2)(d) in respect of interest income earned on deposits placed with co-operative banks. CPC u/s 143(1) denied the claim, which was also sustained by CIT(A), holding that interest from co-operative banks was not eligible for deduction.
ITAT held that section 80P(2)(d) requires only two conditions — income should be by way of interest or dividend & such income should be derived from investments with any other co-operative society. Co-operative banks, though excluded from claiming deduction for themselves u/s 80P(4), continue to be co-operative societies as defined u/s 2(19). Therefore, interest earned by a co-operative society from deposits with co-operative banks squarely qualifies for deduction u/s 80P(2)(d).
Tribunal reiterated that section 80P is a benevolent provision to be interpreted liberally, relying on Supreme Court decision in Mavilayi Co-operative Bank, and followed consistent Mumbai ITAT precedents. Addition made by CPC/AO was directed to be deleted & deduction u/s 80P(2)(d) was allowed in full.
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)-2, Visakhapatnam, dated 25-08-2025, pertaining to Assessment Year (AY) 2021-22.
