Case Law Details
Reserve Bank Staff and Officers Vs ITO (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT) Mumbai has provided a significant ruling on the application of Section 80P(2)(d) of the Income-tax Act, 1961, concerning the deduction eligibility for interest income earned by cooperative societies from cooperative banks. The series of appeals filed by Reserve Bank Staff and Officers Co-Op Society for Assessment Years (AYs) 2013-14, 2014-15, 2017-18, 2018-19, and 2020-21 have brought to light the nuances surrounding this deduction. This analysis delves into the tribunal’s decision and its implications on the interpretation of Section 80P(2)(d).
Legal Background and Issue at Hand: The core issue revolves around whether a cooperative society is entitled to deductions under Section 80P(2)(a) or 80P(2)(d) for interest income from cooperative banks. The ITAT was tasked with clarifying the conditions under which such interest income qualifies for deduction, especially considering the distinctions between cooperative societies and cooperative banks, and whether a banking license from the Reserve Bank of India (RBI) influences this eligibility.
ITAT’s Analysis and Verdict: The ITAT, in its comprehensive judgment, addressed several critical aspects:
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