AGRICULTURE COLLEAGE FARM CO-OPERATIVE CREDIT SOCIETY LTD,PUNE V. ITO WARD-2(1), PUNE

ITA 1697/PUN/2025

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The case involves the Agricultural College Farm Co-operative Credit Society Ltd., which appealed against the order of the CIT(A) that upheld the disallowance of a deduction claimed under section 80P(2)(d) of the Income Tax Act, 1961. The deduction pertained to interest income of Rs. 10,89,512 earned from deposits with Cooperative Banks. The Tribunal referenced several precedents where it was held that such income is eligible for deduction, emphasizing that Cooperative Banks, despite their banking functions, are essentially Cooperative Societies.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 774247 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Appeal Filed On: 21-07-2025
• Other Referred Cases: M/s Maharashtra JPAHPECCS Pvt. Ltd. in ITA 1021/PUN/2025, Annapurna Nagari Sahkari Pathsanstha Maryadit Yawal Vs. ITO in ITA No.313/PUN/2025, Kolhapur District Central Co-op. Bank Kanista Sevakanchi Sahakar Pat Sanstha Ltd., Vs. ITO in ITA No. 1365/PUN/2023, The Ugar Sugar Works Kamgar & Dr. Shirgaokar Shaikshanik Trust Nokar Co-op Credit Society vs. ITῸ in ΠΑ No.84/PAN/2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARSHIT BARI
• Assessee Lawyers: C.V.DESHPANDE
• Keywords: Set aside; Additional evidence; Co-operative Credit Society
• Section: 143(3)

Judgement Text

" आयकर अपीलीय अधिकरण \" एस एम सी \"न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL \"SMC\" BENCH, PUNE BEFORE Dr. MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं / ITA No.1697/PUN/2025 धििाारण वर्ा / Assessment Year: 2018-2019 Agricultural College Farm Co-operative Credit Society Ltd, Agricultural College Pune, Shivaji Nagar, Pune-411005 Maharashtra PAN-AADAA3783A Vs ITO Ward-2(1), Pune Appellant Respondent Assessee by : Shri C.V. Deshpande Pritesh Raka Revenue by : Shri Harshit Bari, Addl. CIT Date of hearing : 21.08.2025 Date of pronouncement : 01.09.2025 आदेश/ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER :- This appeal at the instance of the assessee is directed against the order passed by Ld. CIT(A) NFAC, Delhi dated 22.05.2025 u/s 250 of the Income Tax Act, 1961 and is arising out of assessment order passed u/s 143(3) dated 23.02.2021. 2. The only issue for our consideration is regarding the disallowance of deduction of Rs. 10,89,512/- u/s 80P(2)(d) of the Act. Printed from counselvise.com 2 ITA No.1697/PUN/2025 3. At the outset Ld. Counsel for the assessee placing reliance on the decision of this Tribunal in the case of M/s Maharashtra JPAHPECCS Pvt. Ltd. in ITA 1021/PUN/2025 dated 16.06.2025 submitted that this Tribunal is consistently holding that interest and dividend received from co-operative Banks is eligible for deduction u/s 80P(2)(d). 4. Ld. Departmental Representative (DR) supported the order of the Ld. CIT(A). 5. We have heard rival contentions and perused the record placed before us. In the assessment proceedings of assessee which is a co-operative society for A.Y. 2018-19 completed on 23.02.2021, Ld. AO has disallowed the deduction u/s 80P(2)(d) of the Act at Rs. 10,89,512/- claimed by the assessee towards income from Co-operative Banks. The account of the Assessing Officer (AO) has been affirmed by Ld. CIT(A). We however find that the instant issue is no longer “res integra” by virtue of catena of decisions taking consistent view that interest income erred from deposits with Co-operative Banks is eligible for deduction u/s 80P(2)(d) of the Act. Recently this Tribunal in the case of M/s Maharashtra JPAHPECCS Limited (Supra) dealing with the similar issue has allowed the deduction u/s 80P(2)(d) of the Act observing as follows:- 4. We have heard the rival contentions and perused the record placed before us. It is an admitted fact that impugned addition is regarding denial of deduction u/s.80P(2)(d) of the Act for the interest income earned from Cooperative Bank namely PDCC at Rs.17,51,124/-. Lower authorities have denied the deduction as PDCC is not a Cooperative Society. Before us, assessee has furnished paper book and referring to page 12 of the paper book our attention has been drawn to Certificate of Registration as per which Registrar of Cooperative Societies, Bombay Presidency has certified that PDCC Ltd, has been registered u/s.9 of the Act, 1992 and assessee is Printed from counselvise.com 3 ITA No.1697/PUN/2025 basically a Cooperative Bank registered under Maharashtra Cooperative Societies Act, 1960. 5. This issue is no longer res integra by virtue of catena of decisions taking consistent view that interest income earned from deposits with Cooperative Banks is eligible for deduction u/s.80P(2)(d) of the Act. Recently, this Bench in the case of Annapurna Nagari Sahkari Pathsanstha Maryadit Yawal Vs. ITO in ITA No.313/PUN/2025, order dated 07.05.2025 has allowed the deduction claimed by the assessee u/s.80P(2)(d) of the Act observing as under : “5. We have heard the rival submissions and perused the record placed before us. There is no dispute to the fact that assessee has earned interest income of Rs. 1,02,95,103/- from deposits/investments twith Cooperative Banks. This fact has been accepted by the Assessing Officer in the assessment onter also. Admittedly, assessee has not filed the requisite detala before Id. CITIA). We however considering the fact That the issue regarding allowability of deduction u/s.80P(2)(d) of the Act for the interest earned from Cooperative Banks is no longer res integra as the very same issue has been decided by this Tribunal in catena of decisions and in assesse's oun case for A.V. 2020-21 holding that the assessee is eligible for deduction u/s.80P(2)(d) of the Act as the Cooperative Banks are basically Cooperative Societies. For the sake of brevity, the finding given in ITA No.2471/PUN/2024 is reproduced below “7. We have heard both the sides and perused the record placed before us. In the instant case, the Assessing Officer disallowed the interest income of Rs.1,63,98,998/ earned out of the Fixed deposits/Investments made with Cooperative Banks treating the same as Income from Other Source. Ld.CIT(A) dismissed the appeal in limine without discussing anything on merits of the issues and on the ground that the assessee has not provided plausible explanation for admission of additional evidences, 8. Section 80P(2)(d) of the Act provides that the sum received in respect of any income by way of interest or dividend derived by Cooperative Society from its investment with any other Cooperative Society, the whole of such income is eligible for deduction u/s.80P of the Act. we find that this issue is no more res integra as the Coordinate Benches of this Tribunal has been consistently holding that the interest income earned out of the FDs/Investments kept with Cooperative Banks is allowable u/s.80P(2)(d) of the Act. We find that this Tribunal in case of Kolhapur District Central Co-op. Bank Kanista Sevakanchi Sahakar Pat Sanstha Ltd., Vs. ITO in ITA No. 1365/PUN/2023, dated 01.01.2024 dealing with similar issue after placing reliance on another decision of this Tribunal in the case of The Ugar Sugar Works Kamgar & Dr. Shirgaokar Shaikshanik Trust Nokar Co-op Credit Society vs. ITῸ in ΠΑ No.84/PAN/2018, dated 27.05.2022 has held that the interest earned from deposits with Cooperative Banks are also eligible for deduction u/s.80P(2)(d) of the Act as Cooperative Banks are basically Cooperative Societies only but have turned into Bank on getting necessary banking license. 9. Respectfully following the above referred decisions taking consistent view along with considering the facts of the case, where the assessee Printed from counselvise.com 4 ITA No.1697/PUN/2025 made investment with the Cooperative Banks we hold that the assessee is eligible for deduction u/s.80P(2)(d) of the Act for the interest income earned from Cooperative Banks at Rs. 1,63,98,998/ Findings of the Id. CIT(A) is set aside and the Assessing Officer is directed to allow the claim made by the assessee. Effective grounds of appeal raised by the assessee are allowed.\" 6. Respectfully following the same, we hold that deduction of Rs. 1,02,95,103/-u/s.80P(2)(d) of the Act claimed by the assessee on the interest earned from deposits/Investments with Cooperative Banks deserves to be allowed. Relevant finding of ld.CIT(A) on merits is set aside and grounds of appeal No.5 to 8 raised by the assessee are allowed.\" 6. Respectfully following the same, we hold that deduction claimed by the assessee on the interest income earned from deposits/Investments with PDCC u/s.80P(2)(d) of the Act at Rs.17,51,124/- deserves to be allowed. Impugned finding of ld.CIT(A) is set aside and effective Grounds of appeal raised by the assessee are allowed. 7. In the result, appeal of the assessee is allowed. 6. Respectfully following the above decision we are inclined to hold that the assessee’s claim of deduction u/s 80P(2)(d) of the Act for income earned from PDCC Bank (Co- operative Bank) is allowable. We thus set aside the finding of Ld. CIT(A) and direct the AO to allow the deduction u/s 80P(2)(d) of the Act at Rs. 10,89,512/- to the assessee for the income earned from Co-operative Banks. Effective grounds of appeal raised by the assessee are allowed. 7. In the result appeal of the assessee is allowed. Order pronounced on this 01st day of September, 2025. Sd/- Sd/- (VINAY BHAMORE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/ Pune; दििांक / Dated: 01st September, 2025. Neeta Printed from counselvise.com 5 ITA No.1697/PUN/2025 आिेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to: 1. अपीलार्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. . 3 The Pr. CIT concerned. . 4 धवभागीय प्रधिधिधि, आयकर अपीलीय अधिकरण, \"SMC\" बेंच, पुणे / DR, ITAT, \"SMC\" Bench, Pune. 5. गार्ा फाइल / Guard File. आिेशािुसार / BY ORDER, Senior Private Secretary आयकर अपीलीय अधिकरण, पुणे / ITAT, Pune. Printed from counselvise.com "