MALAYINKIL SERVICE CO-OPERATIVE BANK LTD,THIRUVANANTHAPURAM V. ITO, THIRUVANANTHAPURAM

ITA 457/COCH/2025

AI Insights

The case involves the Malayinkil Service Co-op Bank Ltd., which appealed against the order of the National Faceless Appeal Centre, Delhi, concerning the Assessment Year 2016-17. The primary issue was the eligibility of the bank to claim deductions on interest income received from the District Co-operative Bank and Treasury under section 80P of the Income Tax Act. The tribunal referenced a decision by the Hon'ble Jurisdictional High Court, which clarified the applicability of section 80P(2)(d) concerning interest income from non-Co-operative Society sources. The tribunal's decision favored the assessee, allowing the deductions claimed.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 713024 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2016-2017
• Other Referred Cases: PCIT v. Peroorkada Service Co-op. Bank Ltd. [2022] 442 ITR 141 (Ker)
• Laws Referred To: Section 80P of the Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM ITA Nos. 457 & 458/Coch/2025 Assessment Years : 2016-17 & 2012-13 Malayinkil Service Co-op Bank Ltd. .......... Appellant Head Office, Market Junction, Malayinkil P.O., Trivandrum [PAN: AABAM 1559 Q] vs. ITO, Ward-2(4), .......... Respondent Trivandrum. Appellant by: ------- None ------- Respondent by: Smt. Leena Lal, Sr. DR Date of Hearing: 22.07.2025 Date of Pronouncement: 31.07.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 17.01.2025 for Assessment Year (AY) 2016-17. 2. I notice that the issue related to interest income received from the District Co-operative bank stands adjudicated by the Hon'ble Jurisdictional High Court’s decision in the case of PCIT v. Peroorkada Service Co-op. Bank Ltd. [2022] 442 ITR 141 (Ker) Printed from counselvise.com 2 ITA No. 676/Coch/2024 Meat Products of India Ltd. wherein their Lordships have rejected the Revenue’s identical stand as under: - “12.2 Section 80P deals with Co-operative Societies' computation of income. As already noted, it has four sections and several sub- sections and clauses. The Parliament has considered the various situations in which the exigible income and the deductable income of the assessee is considered while computing the income of the assessee. For getting deduction, in our considered view, the assessee must also establish that the interest income earned by the assessee is from a Co-operative Society. As a matter of fact, in the case on hand, there is no dispute that it is not from a Co-operative Society registered under Kerala Co-operative Societies Act. The interest income earned from District Co-operative Bank/State Co-operative Bank, in the facts and circumstances of the case, do come within Section 80P(2)(d). Therefore, the income constitutes income from other sources and the only eligible deduction is covered by Section 80P(2)(d) viz. Interest or dividend derived by the assessee from its investments with any other Co-operative Society. The source of interest income is from Bank and Treasury, interest income received from Treasury be included in the computation of total income of the assessee. In other words, interest earned from Treasury is inadmissible for deduction and interest income from Co-operative Societies registered under the Kerala Co-operative Societies Act are eligible for deduction. The contra consideration of Commissioner of Income Tax (Appeals) and the Tribunal is incorrect and liable to be modified as stated above. Hence, it is held that the interest income earned by the assessee does not come within the ambit of Section 80P(2)(a)(i) and permissible deduction of interest income is limited to Co-operative Societies/Banks registered under Kerala Co-operative Societies Act under clause (d) of the Act and effect order on the above lines is made by the Assessing Officer. The questions are accordingly answered.” 3. Respectfully following the above decision of the Hon'ble Jurisdictional High Court, I hold that the assessee is entitled for Printed from counselvise.com 3 ITA No. 676/Coch/2024 Meat Products of India Ltd. deduction under section 80P(2)(d) of the Act on account of interest received from District Co-operative Bank and Treasury. 4. In the result, appeal filed by the assessee is allowed. Order pronounced in the open court on 31st July, 2025. Sd/- (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 31st July, 2025 vr/- Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar ITAT, Cochin Printed from counselvise.com "