KOLHAPUR Z P K S P S M,MAHARASHTRA V. INCOME TAX OFFICER, WARD 1(1), KOLHAPUR, WARD ONE (ONE)

ITA 153/PUN/2025

AI Insights

The case involves an appeal by Kolhapur Z P K S P S M against the order of the CIT(A) which confirmed the disallowance of deductions under section 80P of the Income Tax Act, 1961, for the assessment year 2018-19. The primary issue was whether the interest and dividends earned from cooperative banks, amounting to Rs. 9,14,916, were eligible for deduction under section 80P(2)(a)(i) and section 80P(2)(d). The Tribunal examined the definitions and applicability of section 80P to cooperative banks and referenced a similar case involving Kolhapur District Central Cooperative Bank to conclude that such income is indeed eligible for deduction under section 80P(2)(d).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298626 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Other Referred Cases: Kolhapur District Central Co-operative Banks Kanista Sevakanchi Sahakar Pat Sanstha Ltd. vs. ITO in ITA No. 1365/PUN/2023 dated 01.01.2024
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AKHILESH
• Section: 250

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 MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.153/PUN/2025 धििाारण वषा / Assessment Year: 2018-2019 Kolhapur Z P K S P S M 854 B Raviwar Peth, Kolhapur-416012 Maharashtra PAN-AAAAK4021A Vs ITO, Ward 1(1), Kolhapur Appellant Respondent Assessee by : None Revenue by : Shri Akhilesh Srivastava, Additional CIT Date of hearing : 22.04.2025 Date of pronouncement : 25.04.2025 आदेश/ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : This appeal by the assessee pertaining to Assessment Year 2018-19 is directed against the order dated 21.11.2024 passed by CIT(A) National Faceless Appeal Centre, (NFAC) Delhi u/s 250 of the Income- tax Act, 1961 which in turn is arising out of the Assessment Order passed u/s.143(3) dated 24.02.2021. 2. Assessee has raised following grounds of appeal:- 1. Whether on the facts and in the circumstances of case and in law, AO and CIT(A), NFAC was correct in disallowing the deduction when the income is part of business of assessee and eligible for deduction. 2 ITA No.153/PUN/2025 2. Whether AO and CIT(A), NFAC is correct in not treating co operative bank in the definition of co operative society and disallowing the deduction u/s 80P. 3. Whether on the facts and circumstances of the case and the law AO and CIT(A) is correct in concluding that interest earned from co operative bank of RS 9,14,916 being interest earned on investment is not eligible for deduction under section 80P(2)(a)(i)without appreciating the fact that these deposit are part and parcel of business activity. 4.Whether on the facts and circumstances of the case and the law AO and CIT(A) is correct in not allowing interest earned from co operative bank of RS 9,14,916 as deduction under section 80P(2)(d) without appreciating the fact that these deposit or investment are with co operative societies which includes co operative bank. 5. AO and CIT (A) have earred in calculating penalty /interest. 6. The assessee craves leave to amend, alter or delete any of the above grounds of appeal. 7. It is prayed that the above claims and allowacnes be allowed. 3. The sole grievance of the assessee is that Ld. CIT(A) erred in confirming the disallowance of deduction u/s 80P(2)(d) of the Act for the interest earned from Cooperative banks at Rs. 9,14,916/- The assessee has requested to decide the issues based on the return submissions filed on 21.02.2025 running into 21 pages. 4. On the other hand Ld. AO supported the orders of the lower authorities. 5. We have heard rival contentions and perused the record placed before us. The assessee has been denied deduction u/s 80P(2)(a)(i) of Rs. 9,14,916/- which includes interest and dividend from Co-operative Banks and Form fees. The alternate ground is that the assessee is entitled for its deduction u/s 80P(2)(d) of the Act for the interest and dividends earned from Co-operative Banks. From the perusal of written submissions filed by the assessee out of the alleged sum of Rs. 9,14,916/-, Rs. 9,12,640/- is interest and dividend received from Kolhapur District Central Co-operative Banks Kanista Sevakanchi Sahakar Pat Sanstha Ltd. and NKGSB Co-operative Bank. Section 3 ITA No.153/PUN/2025 80P(2)(d) provides that interest on dividend earned by the Co- operative Society from its investment from any other Co- operative Society is eligible for deduction u/s 80P(2)(d) the Act. We further notice that a consistent view has been taken in Plethora of decisions including that of Kolhapur District Central Co-operative Banks Kanista Sevakanchi Sahakar Pat Sanstha Ltd. vs. ITO in ITA No. 1365/PUN/2023 dated 01.01.2024 that since the co-operative Banks are basically Co-operative Societies, therefore even the interest and dividends earned from Co-operative Banks is eligible for deduction u/s 80P(2)(d) of the Act. Taking consistent view we are inclined to up hold that in the instant case interest and dividend from Co-operative Bank at Rs. 8,72,600/- and Rs. 40,040/- respectively total Rs. 9,12,640/- is to be allowed as deduction u/s 80P(2)(d) of the Act. Finding of Ld. CIT(A) is partly affirmed. Effective grounds of appeal raised by the assessee are partly allowed. 6. In the result, appeal of the assessee is partly allowed. Order pronounced on this 25th day of April, 2025. Sd/- Sd/- (ASTHA CHANDRA) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे/ Pune; दििांक / Dated: 25th April, 2025. Neeta आिेश की प्रधिधलधप अग्रेधषि / 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. 4 ITA No.153/PUN/2025 5. गार्ा फाइल / Guard File. आिेशािुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अधिकरण, पुणे / ITAT, Pune. "