The Income Tax Appellate Tribunal (ITAT), Jaipur Bench held that the interest received by the assessee from the Cooperative Bank is eligible for deduction under section 80P(2)(d) of the Income Tax Act as the Jaipur Central Cooperative Bank is a Cooperative Society registered under Cooperative Societies Act.
The Assessee, Shahpura Gram Seva Sahakari Samiti Ltd. is the primary Agricultural Credit Co-operative Society and the whole of the income of the assessee is exempt u/s 80P(2)(a)(i).
The CIT (A) has confirmed the disallowance of deduction under section 80P(2)(a)(i) on the ground that the interest received by the assessee from Jaipur Central Cooperative Bank is not covered under section 80P(2)(d) as the assessee has not produced any document to prove that Jaipur Central Cooperative Bank is a Cooperative Society.
The assessee has produced a Certificate issued by the Registrar of Cooperative Societies in respect of Jaipur Central Cooperative Bank and submitted that the said Cooperative Bank is a Cooperative Society registered under the Cooperative Societies Act.
Thus the assessee contended that the interest received by the assessee from Jaipur Central Cooperative Bank is eligible for deduction under section 80P(2)(d) of the Income Tax Act.
On the other hand, the respondent authority, while objecting to the filing of the Registration Certificate issued by the Registrar, Cooperative Societies to the Jaipur Central Cooperative Bank submitted that the Certificate issued by the Registrar, Cooperative Societies, Jaipur filed by the assessee is an additional evidence which cannot be considered at this stage when it was not produced by the assessee before the authorities below.
The assessee contended that the CIT (A) has grossly erred in confirming the order of the Assessing Officer disallowing deduction under section 80P(2)(i) on account of interest received from Co-operative Bank and has made the addition of Rs. 2,51,866 and instead allowing a deduction of Rs. 50000 under section 80P(2)(C)(ii).
The Tribunal consisting of Judicial Member, Vijay Pal Rao relied on the decision of the Rajasthan High Court in the case of CIT vs. Rajasthan Rajya Sahakari Kray Vikray Sangh Ltd. and deleted the disallowance/addition made by the AO, which was confirmed by the CIT(A).
“The Cooperative Bank would be considered as a Cooperative Society for the purposes of section 80P(2)(d). Accordingly, in view of the fact that Jaipur Central Cooperative Bank is a Cooperative Society registered under the Cooperative Societies Act, the interest received by the assessee from the said Cooperative Bank is eligible for deduction under section 80P(2)(d) of the Act,” the ITAT said.
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