The Ahmedabad bench of the Income Tax Appellate Tribunal ( ITAT ) held that the assessee, which is a co-operative society, is eligible for a deduction under Section 80P(2)(d) on interest earned from fixed deposits in a co-operative bank.
In this case, the revenue was in an appeal against the order by the Commissioner of Income Tax ( Appeals ) [ CIT( A ) ].
In this case, for the assessment years 2013-14, 2014-15, and 2017-18, the assessing officer ( AO ) passed the final assessment order by disallowing the interest income earned by the assessee by way of FD by investment in another co-operative society, which is Gujarat State Co-op. Bank Ltd. (GSCB), and the rental income from HUDCO and SHARK Systems, which were claimed by the assessee under Section 80P(2)(d) of the Income Tax Act,1961.
The issue involved in this case is whether the assessee, which is a co-operative society, can claim a deduction under Section 80P(2)(d) of the Act on the interest earned on fixed deposits made in the Gujarat State Co-op. Bank Ltd. (GSCB).
The Ahmedabad ITAT relied on the judgement of the Gujarat High Court in the case of PCIT Vs. Ashwin Kumar Arban Co-Operative Society Ltd. in which the High Court held that that cooperative bank was a cooperative society registered under Gujarat State Cooperative Societies Act and, therefore, interest earned by the assessee from the said bank was eligible for deduction under Section 80P(2)(d) of the Income Tax Act.
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The Tribunal by relying on several decisions such as Ratneshwari Co-operative Credit Society Limited vs. ACIT [ITA No. 1409/Ahd/2024] and Shree Vivekanand Co-operative Credit Society Limited vs. ITO [ITA No. 1003/Ahd/2024] held that the assessee was eligible to claim for deduction of interest earned from the investment made in a cooperative bank.
The bench, comprising Dr. BRR Kumar ( Vice President ) and Suchitra Kamble ( Judicial Member ) dismissed the appeal filed by the revenue.
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