2013 (11) TMI 1604 - AT - Income Tax

Entitled to deduction u/s. 80P(2)(d) - Held that - Assessee is eligible for claiming deduction u/s.80P(2)(d) of I.T Act, which is available for income earned from business and not from other sources as rightly held by CIT(A).

Summary

Issues involved:
1. Interpretation of deduction under section 80P(2)(d) for a cooperative society.
2. Whether a bank can be considered as a cooperative society for the purpose of claiming deduction under section 80P(2)(d).

Detailed Analysis:
Issue 1: The primary issue in this case revolves around the interpretation of deduction under section 80P(2)(d) for a cooperative society. The Appellate Tribunal, ITAT Pune, considered the case where the assessee received interest from the Thane Janata Sahakari Bank Ltd. The Tribunal analyzed the relevant provisions of the Income Tax Act, specifically section 80P(2)(d), which allows deduction for income derived by a cooperative society from its investments with any other cooperative societies. The Tribunal referred to a previous decision where it was held that interest received on deposits with a cooperative bank falls within the scope of section 80P(2)(d). The Tribunal concluded that the interest received by the assessee from the bank qualifies for deduction under section 80P(2)(d) as income earned from business, thereby upholding the decision of the Commissioner of Income Tax (Appeal) in favor of the assessee.

Issue 2: Another crucial aspect of this case is whether a bank can be considered as a cooperative society for the purpose of claiming deduction under section 80P(2)(d). The Tribunal examined the nature of the Thane Janata Sahakari Bank Ltd. and whether it can be classified as a cooperative society within the meaning of the relevant section. The Tribunal differentiated between a cooperative bank and other types of cooperative societies, noting that the provisions of section 80P(2)(d) are applicable to income derived by a cooperative society from its investments with any other cooperative societies. Despite the bank not being a traditional cooperative society, the Tribunal held that the interest received by the assessee from the bank falls within the ambit of section 80P(2)(d) as the bank's status does not preclude it from being considered as a cooperative society for the purpose of claiming the deduction. Consequently, the Tribunal dismissed the appeal filed by the revenue and upheld the eligibility of the assessee for claiming deduction under section 80P(2)(d) of the Income Tax Act.

In conclusion, the judgment by the Appellate Tribunal, ITAT Pune, clarifies the interpretation of deduction under section 80P(2)(d) for a cooperative society and establishes that a bank can be considered as a cooperative society for the purpose of claiming such deduction if the income derived meets the criteria specified in the relevant provisions of the Income Tax Act.