SHREE GAJANAN SAHAKARI PATPEDHI LTD ,MUMBAI V. ITO -22(3)(2), MUMBAI

ITA 421/MUM/2025

AI Insights

The case involves Shree Gajanan Sahakari Patpedhi Ltd., a cooperative society, appealing against the order of the National Faceless Appeal Centre (NFAC)/CIT(A), which disallowed a deduction of Rs. 24,03,094 claimed under section 80P(2)(d) of the Income Tax Act, 1961. This deduction was for interest income received from cooperative banks. The Assessing Officer had disallowed the deduction based on precedents from the Supreme Court and Karnataka High Court, which the Tribunal found not applicable in this instance. The Tribunal referenced several High Court decisions that supported the assessee's claim, leading to the allowance of the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 33564 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: Totgars Co-operative Sale Society Ltd. vs. ITO, PCIT vs. Totagars Co-operative Sale Society, CIT vs. U.P. Co-operative Sugar Factory, CIT vs. Haryana Co-operative Sugar Mills
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH MESHRAM
• Assessee Lawyers: VISHAL KUMBHAR
• Section: 250

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER ITA No. 421/MUM/2025 (AY : 2017-18) Shree Gajanan Sahakari Patpedhi Ltd., 225/20, F.IMI CHS Ltd. Maharashtra High School Ground, Delisle Road Curry Road, Mumbai - 400013 PAN No. AAGAS5954C ……………. Appellant Versus ITO – 22(3)(2), Room No.306, 3rd Floor, Piramal Chambers, Mumbai-400013 ……………. Respondent Assessee by : Shri Vishal Kumbhar-CA/ AR Revenue by : Shri Rajesh Meshram, Sr. DR Date of Hearing – 26/03/2025 Date of Order – 27/03/2025 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by the assessee is directed against the order passed by National Face less Appeal Centre (NFAC)/ the CIT(A), dated 11.11.2024 passed under section 250 of the Income Tax Act, 1961 (“the Act”) for the assessment year 2017-18. Though the assesse has raised multiple grounds of appeal. However, in our considered view the substantial grounds of appeal relate to deduction under section 80P(2)(d) of Rs.24,03,094/-. 2 ITA No. 421/Mum/2025 Shree Gajanan Sahakari Patpedhi Ltd. 2. Rhe rival submissions of both the parties have been heard and record perused. The learned authorised representative (ld.AR) of the assessee submits that while filing return of income, the assessee in its computation of total income claimed deduction of Rs.24,03,094/- under section 80P(2)(d) of the Act on account of interest received from (i) Maharashtra State Co-operative Bank Ltd., (ii) Mumbai District Central Co-operative Bank Ltd. and (iii) The Ajara Urban Co-operative Bank Ltd. The figure of interest income received from co- operative banks are not disputed by lower authorities. The AO disallowed such disallowance by referring / relying upon the decision of Hon’ble Apex Court in Totgars Co-operative Sale Society Ltd. vs. ITO, (2010) 188 Taxman 282 (SC) and Hon’ble Karnataka High Court in PCIT vs. Totagars Co-operative Sale Society (2017) 83 taxmann.com 140 (Karnataka). The ratio of decision relied upon by the AO is not applicable on the facts of the present case. It has been consistently held by various benches of Tribunal that co-operative banks are primarily co-operative society and the interest or dividend income earned from such co-operative bank are eligible for deduction under section 80P(2)(d). Hon’ble Allahabad High Court in CIT vs. U.P. Co-operative Sugar Factory, (2013) 37 taxmann.com 58 (Alld.) also held that where assessee a co-operative society received interest from another co-operative society / co-operative banks, deduction under section 80P(2)(d) would be available to assessee on net income from interest. The ld. AR for the assessee submits that similar view was taken by Hon’ble Punjab & Haryana High Court in CIT vs. Haryana Co- operative Sugar Mills, 180 ITR 631. 3 ITA No. 421/Mum/2025 Shree Gajanan Sahakari Patpedhi Ltd. 3. On the other hand, learned senior departmental representative (Sr.DR) for the Revenue supported the order of lower authorities. 4. We have considered the submissions of both the parties and have gone through the orders of lower authorities. We have also deliberated on various case laws relied upon by the learned AR of the assessee. We find that grounds of appeal raised by the assessee is in fact covered by a series of decision by this Bench as well as other Co-ordinate Benches of Tribunal wherein it has been consistently held that Co-operative Banks are primarily co-operative society and the interest or dividend earned from such Co-operative Bank are eligible for deduction under section 80P(2)(d). We find that Hon’ble Allahabad High Court in CIT vs. U.P. Co-operative Sugar Factory, (supra) also held that where assessee a co-operative society received interest from another co-operative society / co-operative banks, deduction under section 80P(2)(d) would be available to assessee on net income from interest. Similar view was taken by Hon’ble Punjab & Haryana High Court in CIT vs. Haryana Co-operative Sugar Mills(supra).No contrary facts or law is brought to our notice to take other view. Thus, the grounds of appeal raised by the assessee are allowed. 5. In the result, the grounds of appeal raised by the assessee are allowed. Order pronounced in the open Court on 27/03/2025. Sd/- GIRISH AGRAWAL ACCOUNTANT MEMBER Sd/- PAWAN SINGH JUDICIAL MEMBER MUMBAI, DATED: 27/03/2025 Prabhat "