P B CO STY LTD SWD,SAWANTWADI V. INCOME TAX OFFICER, KUDAL

ITA 665/PUN/2025

AI Insights

The case involves P B CO STY LTD SWD, the appellant, contesting the denial of a deduction under section 80P(2)(d) of the Income-tax Act, 1961, for interest income earned from investments with Cooperative Banks during the assessment year 2020-21. The National Faceless Appeal Centre (NFAC), Delhi, had upheld the Assessing Officer's decision, which was challenged in this appeal. The Tribunal referenced a series of precedents where it was consistently held that interest income from Cooperative Banks is eligible for deduction under section 80P(2)(d), as these banks are considered Cooperative Societies.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705819 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2020-2021
• Other Referred Cases: Annapurna Nagari Sahkari Pathsanstha Maryadit Yawal Vs. ITO, Kolhapur District Central Co-op. Bank Kanista Sevakanchi Sahakar Pat Sanstha Ltd. Vs. ITO, The Ugar Sugar Works Kamgar & Dr. Shirgaokar Shaikshanik Trust Nokar Co-op Credit Society vs. ITO
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S. SADANANDA SINGH
• Keywords: Set aside; Additional evidence

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.665/PUN/2025 Assessment Year : 2020-21 P B CO STY LTD SWD Sawantwadi, Sindhudurg, Mazgaon B.O Majgaon - 416510 Maharashtra PAN: AAATP995D Vs. Income Tax Officer, Ward-3, Kudal Appellant Respondent आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The captioned appeal at the instance of assessee pertaining to A.Y. 2020-21 is directed against the order dated 28.02.2025 of National Faceless Appeal Centre(NFAC), Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Assessment Order dated 23.09.2022 passed u/s.143(3) r.w.s 144B of the Act. Appellant by : None Respondent by : Shri S. Sadananda Singh, JCIT Date of hearing : 18.06.2025 Date of pronouncement : 30.06.2025 ITA No.665/PUN/2025 P B CO STY LTD SWD 2 2. The only grievance of the assessee is that ld.CIT(A) erred in confirming the action of the Assessing Officer denying claim of deduction u/s.80P(2)(d) of the Act for the interest earned on investments made with Cooperative Banks. 3. When the appeal was called for none appeared on behalf of the assessee despite due service of hearing. With the assistance of ld. Departmental Representative and considering the fact that the issue raised in the instant appeal has already been decided by this Tribunal in catena of decisions holding in favour of the assessee, I proceed to adjudicate the appeal. 4. I have heard the ld. Departmental Representative and perused the record placed before me. I find that during the year under consideration assessee society has earned interest income of Rs.27,19,740/- from the investments held with Cooperative Banks. This Tribunal is consistently holding that Cooperative Banks are basically Cooperative Societies and therefore the interest income earned from investments with Cooperative Banks is also eligible for deduction u/s.80P(2)(d) of the Act. Lower authorities have denied the deduction as the above Cooperative banks are ITA No.665/PUN/2025 P B CO STY LTD SWD 3 not Cooperative Societies. Ld. Departmental Representative did not controvert this contention by placing any binding precedent in favour of the Revenue. 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 with Cooperative Banks. This fact has been accepted by the Assessing Officer in the assessment order also. Admittedly, assessee has not filed the requisite details before ld.CIT(A). 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 own case for A.Y. 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 ITA No.665/PUN/2025 P B CO STY LTD SWD 4 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. ITO in ITA 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 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 ld. 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 ITA No.665/PUN/2025 P B CO STY LTD SWD 5 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, I hold that deduction claimed by the assessee on the interest income at Rs.12,19,740/- earned from deposits/Investments with Cooperative Banks deserves to be allowed u/s.80P(2)(d) of the Act. 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. Order pronounced on this 30th day of June, 2025. Sd/- (MANISH BORAD) ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 30th June, 2025. Satish ITA No.665/PUN/2025 P B CO STY LTD SWD 6 आदेश क\u0002 \u0003ितिलिप अ ेिषत / Copy of the Order forwarded to : 1. अपीलाथ / The Appellant. 2. \u000eयथ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, “SMC” ब\u0014च, पुणे / DR, ITAT, “SMC” Bench, Pune. 5. गाड\u0004 फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. "