Bhairavnath Multi State Co.op. Credit Society Limited Vs ITO (ITAT Pune)
The ITAT Pune considered whether a cooperative credit society was entitled to deduction under Section 80P(2)(d) of the Income-tax Act, 1961 on interest income of ₹3,87,34,866 earned from investments with Cooperative Banks and Cooperative Societies for AY 2020-21. The Assessing Officer denied the deduction, and the CIT(A) affirmed the disallowance. Before the Tribunal, the assessee submitted that the issue had already been decided in its own favour for AY 2014-15 and that consistent decisions of the Tribunal had held interest earned from investments with Cooperative Banks to be eligible for deduction under Section 80P(2)(d). The Tribunal observed that the issue was no longer res integra, noting a consistent judicial view that interest earned from deposits with Cooperative Banks qualifies for deduction under Section 80P(2)(d). Referring to its recent decision in Annapurna Nagari Sahkari Pathsanstha Maryadit Yawal Vs. ITO and earlier coordinate bench decisions, the Tribunal reiterated that Cooperative Banks are basically Cooperative Societies that have obtained banking licences, and therefore interest earned from investments with them is eligible for deduction under Section 80P(2)(d). Following these precedents, the Tribunal held that the assessee was entitled to the claimed deduction, set aside the impugned order, allowed the deduction under Section 80P(2)(d), and allowed the appeal.
