Interest Income Earned by Co-operative Society from Another Cooperative Bank Eligible for Income Tax Deduction u/s. 80P (2)(d): ITAT [Read Order]

Income Tax appellate tribunal (ITAT) of Chennai Bench recently held that interest income earned by cooperative society from another cooperative bank eligible for Income Tax Deduction under section 80P (2)(d) of Income Tax Act 1961.

Assessee Bhairabnala Samabay Krishi Unnayan Samity Ltd.  Was a Co-operative society registered under the West Bengal Co-operative Societies Act, 1983 and it is a Primary Agricultural Credit Co-operative Society. When they filed the return in the year 2018  they declared income was  nil, after claiming deduction under section 80P of the Income Tax Act 1961 Act. During the course of assessment proceedings Assessing Officer(AO) found that  the assessee earned interest income on short term deposit and recurring deposit from Burdwan Central Co-operative Bank Ltd. at Rupees  16,04, 004/-. AO to ask the assessee as to why they said interest income should not be excluded from the deduction under section 80P of the Income Tax Act 1961. Assesse submit their submission but it was not consider the AO.Against the order of assessing officer assesse filed an appeal before ITAT.

Section 80P of the Income Tax Act 1961 says that if an assessee is a co -operative society, the gross total income of the society it include any income referred in subsection 2 of the section 80(P) shall be deducted in accordance with the section and for computing the total income of the co operative society the sum specified in the subsection 2 of the section 80(P) is considered.

Counsel for the assessee A.N. Chatterjee and S.D Bandyopadhyah  submit that the “ interest income is received from investments made in co-operative bank and eligible for deduction u/s80P(2)(d) of the Income Tax Act 1961 Act”.

Vijay Kumar ,counsel for the revenue contented that assessee was not eligible for deduction under section 80P(2)(a)(i) of the Income Tax Act 1961 for the alleged interest income.

After consider the contentions of the both side the ITAT  bench of Manish Borad  (Account member) observed that   “since the assessee has earned interest of Rs.16,04,004/- from other cooperative society, which in this case is a cooperative bank, is eligible for deduction u/s. 80P(2)(d) of the Income Tax Act 1961.”

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