2024 (7) TMI 84 - AT - Income Tax

Deduction u/s 80P (2) (D) - assessee is a co-operative society, has placed certain funds with cooperative banks and earned interest thereon - argument of the revenue is that when the assessee has made an investment in another cooperative society only then this deduction is allowable - HELD THAT - Section 2 (19) of the act defines cooperative society means a cooperative society registered under the cooperative societies act, 1912 or under any other law for the time being in force in any State for the registration of cooperative societies. Thus if the cooperative banks are falling into the definition of 'cooperative societies', naturally the deduction would be eligible to the assessee u/s 80P (2) (d) of the act. Therefore it needs to be examined that whether the cooperative banks are operative societies under section 2 subsection (19) of the act are not. Section 2 (10) of the Maharashtra cooperative societies act defines Co-operative bank means a Co-operative society which is doing the business of banking as defined in clause (b) of sub-sections (1) of section 5 of the Banking Companies Act, 1949 and includes any society which is functioning or is to function as an Agricultural and Rural Development Bank under Chapter XI; Therefore according to the above definition, the cooperative banks are also cooperative society. No hesitation to hold that the amount of investment made by the assessee with cooperative banks in Maharashtra are also investment made in cooperative society. Thus, on plain reading of the sections of the income tax act it is clear that if assessee has made an investment in fixed deposit receipts or in savings bank account, interest earned thereon is eligible for deduction u/s 80P (2) (d). The words of the statute are plain and clear and there is no room for applying any of the principles of interpretation. We are supposed to interpret them as they stand. It is not the claim of the revenue that assessee is not a cooperative society. AO is directed to grant deduction to the assessee on interest income earned from cooperative banks u/s 80 P (2) (d) - Appeal of the assessee is allowed.

Summary

Issues Involved:
- Whether the assessee is entitled to deduction under section 80P(2)(d) of the Income Tax Act or not.

Detailed Analysis:

Issue 1: Deduction under Section 80P(2)(d) of the Income Tax Act
- The appeal was filed by a cooperative housing society against the appellate order passed by the Additional Commissioner of Income Tax (Appeals) for assessment year 2015-16.
- The assessee claimed deduction under section 80P of the Income Tax Act for interest income earned from investments with cooperative banks.
- The assessing officer disallowed the deduction, stating that cooperative banks do not qualify as cooperative societies and therefore, the interest income was not eligible for deduction.
- The CIT (Appeals) upheld the assessing officer's decision, stating that investment in cooperative banks does not qualify for deduction under section 80P(2)(d) of the act.
- The tribunal analyzed the definitions of cooperative society and cooperative bank under the Income Tax Act and the Maharashtra Cooperative Societies Act.
- It was established that cooperative banks are also considered cooperative societies under the relevant laws.
- The tribunal concluded that the interest income earned from investments in cooperative banks is eligible for deduction under section 80P(2)(d) of the Income Tax Act.
- The tribunal reversed the orders of the lower authorities and directed the assessing officer to grant the deduction to the assessee on the interest income earned from cooperative banks.
- The appeal of the assessee was allowed, and the order was pronounced in the open court on a specified date.

This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the tribunal's decision regarding the deduction under section 80P(2)(d) of the Income Tax Act.