SHRI SAIKRUPA NAGARI SAHAKARI PATSANSTHA MARYADIT KOLHAPUR,KOLHAPUR V. CIRCLE 1, KOLHAPUR, KOLHAPUR

ITA 2378/PUN/2024

AI Insights

The case involves Shri Saikrupa Nagari Sahakari Patsanstha Maryadit Kolhapur, a Cooperative Credit Society, which appealed against the order of the National Faceless Appeal Centre, Delhi, concerning the Assessment Year 2018-19. The primary issue was the disallowance of a deduction under section 80P(2)(d) for interest income of Rs.19,33,878 earned from investments with Cooperative Banks. The Assessing Officer had treated this income as 'Income from Other Sources' under section 56 of the Act, thus disallowing the deduction. The CIT(A) affirmed this decision, leading to the appeal before the Tribunal. The Tribunal, referencing similar cases and precedents, ruled in favor of the assessee, allowing the deduction.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 24790 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Other Referred Cases: 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: VINOD PAWAR

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.2378/PUN/2024 Assessment Year : 2018-19 Shri Saikrupa Nagari Sahakari Patsanstha Maryadit Kolhapur, 720, Office Shop No.4, Near Deshmukh Hall, Old Washi Naka, A - Ward, Kolhapur – 416011 Maharashtra PAN : AAPAS5987G V/s ITO, Circle-1, Kolhapur Appellant Respondent आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The captioned appeal pertaining to Assessment Year 2018- 19 at the instance of assessee is directed against the order dated 15.10.2024 passed by National Faceless Appeal Centre, Delhi u/s.250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) which in turn is arising out of Assessment Order dated 08.04.2021 passed u/s.143(3) r.w.s.143(3A) & 143(3B) of the Act. Assessee by : None Revenue by : Shri Vinod Pawar Date of hearing : 23.12.2024 Date of pronouncement : 07.01.2025 ITA No.2378/PUN/2024 Shri Saikrupa Nagari Sahakari Patsanstha Maryadit Kolhapur 2. Succinctly, the facts of the case are that the assessee is a Cooperative Credit Society registered under the Maharashtra Cooperative Societies Act, 1960. It is engaged in the activity of accepting deposits from its members and providing credit facilities to them. Return of income for the A.Y. 2018-19 was furnished on 22.10.2018 declaring Nil income after claiming deduction under Chapter VIA at Rs.26,32,236/-. After the case selected for Limited Scrutiny followed by validly serving of statutory notices u/s.143(2)/142(1), the assessee filed the requisite details. Based on the information furnished by the assessee, the Assessing Officer noticed that the assessee earned interest income of Rs.19,33,878/- on investment with Cooperative Banks, which in his opinion does not quality for deduction u/s.80P(2)(d) of the Act. Thus, he brought to tax the said interest income disallowing the deduction u/s.80P(2)(d) claimed by the assessee. 3. Aggrieved assessee preferred appeal before the ld.CIT(A) who vide impugned order affirmed the action of the Assessing Officer. 4. Now the assessee is in appeal before the Tribunal. 5. When the case was called for, none appeared on behalf of the assessee despite due service of notice of hearing. I therefore ITA No.2378/PUN/2024 Shri Saikrupa Nagari Sahakari Patsanstha Maryadit Kolhapur proceed to dispose of the appeal with the able assistance of ld. Departmental Representative exparte qua the assessee. 6. Coming to the issue on merits, I have heard the ld. Departmental Representative and perused the material on record. In the instant case, the Assessing Officer disallowed interest income of Rs.19,33,878/- earned out of the Fixed deposits/Investments made with Cooperative Banks treating the same as Income from Other Sources u/s.56 of the Act and the same was affirmed by the ld.CIT(A) in the First Appellate Proceedings. 7. 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. I 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. I 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 ITA No.2378/PUN/2024 Shri Saikrupa Nagari Sahakari Patsanstha Maryadit Kolhapur 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. I therefore respectfully following the above referred decisions and taking consistent view along with considering the facts of the case, where the assessee made investment with the Cooperative Banks and 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.19,33,878/-. Findings of the ld. CIT(A) is set-aside and the Assessing Officer is directed to allow the claim by the assessee. Effective grounds of appeal raised by the assessee are allowed. 8. In the result, the appeal of the assessee is allowed. Order pronounced on this 07th day of January, 2025. - Sd/- (MANISH BORAD) ACCOUNTANT MEMBER पुणे/Pune; \u0001दनांक / Dated : 07th January, 2025 Satish ITA No.2378/PUN/2024 Shri Saikrupa Nagari Sahakari Patsanstha Maryadit Kolhapur 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\u0018 फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune "