ITO-17(2)(1), MUMBAI, MUMBAI V. THE BEST EMPLOYEES CO-OP CREDIT SOCIETY LIMITED, MUMBAI

ITA 6733/MUM/2024

AI Insights

The case involves the Best Employees Co-op Credit Society Limited, which appealed against the order of the National Faceless Appeal Centre, Delhi, concerning the disallowance of an interest deduction under section 80P(2)(d) of the Income-tax Act, 1961 for the Assessment Year 2020-21. The primary contention was whether the co-operative banks from which the society earned interest qualify as co-operative societies under the Act. The Assessing Officer initially disallowed the deduction, leading to an addition of Rs. 11,57,02,565 to the assessee's income. However, the CIT(A) reversed this decision, which was contested by the revenue in the current appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474467 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2020-2021
• Other Referred Cases: Totgars Co-operative Sale Society Ltd vs ITO (2010) 322 ITR 283 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: G.P. MEHTA; MONIKA KHARE; PCIT
• Section: 143(3); 250; 80P

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “B”, MUMBAI BEFORE SHRIAMARJIT SINGH, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A No.6733/Mum/2024 (Assessment Year: 2020-21) ITO-17(2)(1), Mumbai Room NO.234, Kautilya Bhavan, BKC, Bandra, Mumbai-400 051 vs The Best Employees Co-op Credit Society Limited, 3rd Floor, Parivahan Bhavan, Shahid Bhagat Singh Marg, Colaba, Mumbai-400 001 PAN : AADAT1884F APPELLANT RESPONDENT Assessee by : Shri. G.P. Mehta Respondent by : Ms. Monika Khare,PCIT-DR Date of hearing : 24/02/2025 Date of pronouncement : 24/02/2025 O R D E R PER ANIKESH BANERJEE, J.M: The instant appeal of the revenue was filed against the order of theNational Faceless Appeal Centre, Delhi [for brevity, ‘Ld.CIT(A)’] passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’), for Assessment Year 2020-21, date of order24.10.2024.The impugned order was emanated from the order of the Assessment Unit, Income-tax Department (for brevity the “Ld. AO”), passed under section 143(3) read with section 144B of the Act, date of order 16/09/2022. 2 ITA No.6733 /Mum/2024 The Best Employees Co-op Credit Sty Ltd 2. The key facts of the case are as follows: The assessee, a co-operative credit society, invested in co-operative banks by way of deposits and earned interest totaling Rs. 11,57,02,565/-. The assessee filed a regular return and claimed an interest deduction under section 80P(2)(d) of the Act. However, during the assessment, the Ld. AO did not recognize the co-operative bank as a co-operative society from which the assessee received the interest and dividend. Consequently, the deduction under section 80P(2)(d) was disallowed, and an addition of Rs. 11,57,02,565/- was made. The aggrieved assessee then filed an appeal before the Ld. CIT(A), who, considering the rulings of various High Courts and Tribunals, allowed the assessee’s appeal. Dissatisfied with this decision, the revenue has now filed an appeal before us. 3. We heard the rival submissions and considered the documents available in the record. The Ld.DR vehemently argued and submitted that the assessee has claimed deduction under section 80P(2)(d) of the Act and accordingly, this deduction is not at all applicable for the assessee as the assessee has invested the amount in the co-operative bank, which has not been considered as co-operative society. Accordingly, in pursuance to the insertion of sub section 4 of section 80P of the Act, the assessee is no more entitled for claiming deduction under section 80P(2)(d) of the Act. She fully relied on the impugned assessment order. 4. The Ld.AR argued and relied on the order of the co-ordinate bench of ITAT- Mumbai in assessee’s own case bearing ITA No.3993/Mum/2024, date of pronouncement 17/10/2024 where the co-ordinate bench has considered the co- operative bank as a co-operative society and the interest and dividend which were received by the assessee from the co-operative banks is held to be eligible 3 ITA No.6733 /Mum/2024 The Best Employees Co-op Credit Sty Ltd for deduction under section 80P(2)(d) of the Act. The Bench has considered the ruling of Hon’ble Supreme Court in the case of Totgars Co-operative Sale Society Ltd vs ITO (2010) 322 ITR 283 (SC)which was rendered in the context of section 80P(2)(d) of the Act in connection with expression use “any income by way of interest”. Thus, “any income by way of interest” derived by co-operative society is eligible and the deduction under section 80P(2)(d) of the Act irrespective of the fact, is also applicable as for co-operative banks also as the co-operative banks are also the co-operative society. The same view was followed in assessee’s own case for A.Y. 2015-16 and 2018-19 in ITA Nos 1267/Mum/2024 and 1275/Mum/2024, respectively, order dated 05/09/2024 where the bench rejected the appeal filed by the revenue and upheld the view taken by the Ld. CIT(A). 5. We respectfully follow both the orders of the co-ordinate bench of ITAT, Mumbai Benches cited supra and accordingly, the grounds taken by the revenue are dismissed. 6. In the result, the appeal of the revenue bearing ITA No.6733/Mum/2024 is dismissed. Order pronounced in the open court on 24th day of February, 2025. Sd/- sd/- (AMARJIT SINGH) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,दिन ांक/Dated: 24/02/2025 Pavanan 4 ITA No.6733 /Mum/2024 The Best Employees Co-op Credit Sty Ltd Copy of the Order forwarded to: 1. अपील र्थी/The Appellant , 2. प्रदिव िी/ The Respondent. 3. आयकरआयुक्त CIT 4. दवभ गीयप्रदिदनदि, आय.अपी.अदि., मुबांई/DR, ITAT, Mumbai 5. ग र्डफ इल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, Mumbai "