The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT), presided over by Judicial Member Vikas Awasthy, decided that the cooperative society is entitled to claim a deduction for said interest on deposits deposited with cooperative banks under Section 80P(2)(d).
The assessee Ashoka Palace Co-operative Housing Society Ltd.,a Co-Operative Housing Society filed an appeal before the ITAT against the order of Commissioner of Income Tax (Appeals) [CIT(A)], National Faceless Appeal Center, Delhi [NFAC].
The succinct fact is that the assessee had made deposits with the Co-Operative Bank and has earned income out of it which shall be subjected to the benefit of deduction u/s 80P(2)(d) of the Income Tax Act, 1961.
The assessee filed its return of income for the impugned assessment year declaring income of Rs.130/- after claiming deduction of Rs.10,93,368/- under Section 80P(2)(d) of the Income Tax Act, 1961. The Assessing Officer (AO) disallowed assessee’s claim of deduction under Section 80P(2)(d).
This assessee then submitted a rectification petition pursuant to Section 154 of the Income Tax Act, which the AO dismissed. The assessee’s appeal, which was also lodged with the CIT(A) was dismissed.
As a representative of assessee Dharan Gandhi submitted that ‘there are several decisions in favour of the assessee, wherein the Tribunal has allowed deduction claimed under Section 80P(2)(d) of the Act in respect of interest income.’
Conversely, Beena Santosh, representative of the Department, strenuously defended the impugned order and requested that the appeal be dismissed.
The appellate tribunal held that the assessee is entitled to make a deduction under Section 80P(2)(d) of Income Tax Act with respect to income accrued on deposits in cooperative banks by citing a handful of High Court decisions.
While making this decision, the bench took into consideration the Co-ordinate Bench’s decision in the case of Kaliandas Udyog Bhavan Premises Co-op Society Ltd. vs. ITO, which mentioned‘that interest income derived by a co-operative society from investments with a co-operative bank, would be entitled for deduction under Section 80P(2)(d) of the Act.’To Read the full text of the Order CLICK HERE
Ashoka Palace Co-op. Hsg. Soc.Ltd vs Income Tax Officer
Counsel for Appellant: Shri Dharan Gandhi
Counsel for Respondent: Ms. Beena Santosh
CITATION: 2022 TAXSCAN (ITAT) 1808
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