Case Law Details
Minority Co-op. Credit Society Ltd. Vs ITO (ITAT Bangalore)
In a landmark judgment, the Income Tax Appellate Tribunal (ITAT) Bangalore, in the case of Minority Co-op. Credit Society Ltd. Vs ITO, has provided clarity on the eligibility of deductions under section 80P(2)(d) of the Income Tax Act, 1961, for co-operative societies. This ruling, dated 22nd August 2023, specifically addresses the deduction claims on interest income derived from investments in unlicensed cooperative banks by co-operative societies for the assessment year 2017-18.
Detailed Analysis
The appeal was filed against the National Faceless Appeal Centre’s (NFAC) order, which denied the deduction claimed under section 80P(2)(d). The main contention revolved around the interpretation of “member” as defined under the Karnataka Co-operative Societies Act, 1959, and its relevance to the eligibility for deductions under section 80P of the Income Tax Act.
The ITAT observed that the NFAC had erred in its decision by not considering the broader definition of “member” which includes nominal and associate members. This interpretation is critical as it determines the scope of activities that qualify for deductions under section 80P(2)(d), particularly concerning interest income on investments made in cooperative banks.
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