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2023 (4) TMI 994 - AT - Income TaxDenial of deduction u/s.80P - interest income earned from Maharashtra Gramin Bank - HELD THAT - As decided in RENA SAHAKARI SAKHAR KARKHANA LTD. case 2022 (1) TMI 419 - ITAT PUNE though co-operative banks, other than primary agricultural credit society or a primary co-operative agricultural and rural development bank, are not eligible for deduction pursuant to insertion of section 80P(4) w.e.f. 1.4.2007, but this provision does not dent the otherwise eligibility u/s 80P(2)(d) of the Act of a co-operative society on interest income on investments/deposits parked with a co-operative bank, which is a registered co-operative society as per section 2(19) of the Act, defining co-operative society to mean a co-operative society registered under the Co-operative Societies Act, 1912 or under any law for the time being in force. The payer of interest is also a Co-operative society registered under the Cooperative Societies Act. Thus we direct to grant deduction u/s.80P(2)(d) of the Act on the amount of interest earned from Maharashtra Gramin Bank. Decided in favour of assessee.
Issues:
The judgment deals with the denial of deduction u/s.80P of the Income-tax Act, 1961 on interest income earned from Maharashtra Gramin Bank for the assessment years 2017-18 and 2018-19. Assessment Year 2017-18: The assessee, a cooperative credit society, declared total income at Nil and claimed deduction u/s 80P on interest income earned from Maharashtra Gramin Bank. The Assessing Officer held that the deduction was allowable only if interest income was earned from a cooperative society. The ld. CIT(A) upheld this decision. The Tribunal referred to previous decisions and held that a cooperative society can claim deduction on interest income from investments/deposits parked with a cooperative bank, which is a registered cooperative society. Following this, the Tribunal directed to grant deduction u/s.80P(2)(d) on the interest income. Assessment Year 2018-19: Similar to the previous year, the AO denied deduction u/s.80P on interest income received from Maharashtra Gramin Bank. The Tribunal, after considering the facts and circumstances, reversed the impugned order and directed the AO to grant the deduction on the interest income. In conclusion, both appeals were allowed, and the Tribunal pronounced the order on 21st April 2023.
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