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2019 (4) TMI 547 - AT - Income TaxDeduction u/s 80P(2)(d) - assessee had earned interest income on the deposits held with Saraswat Co-operative Bank, TJSB Bank, Cosmos Banks and IDBI Bank - claim of deduction by the assessee was denied by the AO for interest income earned from Saraswat Co-operative Bank on the ground that the same is not a Co-operative Society - HELD THAT - The Veer Cooperative Group Housing Society Limited 2018 (9) TMI 287 - ITAT DELHI has held that Sarswat Co-operative Bank to be a Co-operative Society and the interest earned therein to be entitled to claim deduction u/s 80P(2)(d). After relying on the decision in the case of Kaliandas Udyog Bhavan Premises Cooperative Society Ltd., (2018 (4) TMI 1678 - ITAT MUMBAI) has held that the interest earned on investments held with the Co-operative Banks would be eligible for deduction u/s 80P(2)(d). Revenue has not pointed out any contrary binding decision nor has placed on record any material to demonstrate that the aforesaid decisions have been set aside/ stayed/over-ruled by any higher Judicial Forum. Following the aforesaid decisions, hold interest income earned by the assessee on the deposits held with Banks would be eligible for deduction u/s 80P(2)(d) - Decided in favour of assessee.
Issues:
Denial of claim of deduction u/s 80P(2)(d) of the Act for interest income earned from Co-operative Bank and other banks. Analysis: The appeal filed by the assessee challenges the order of Commissioner of Income Tax (A) regarding the denial of deduction u/s 80P(2)(d) of the Act for interest income earned from Co-operative Bank and other banks. The assessee, a Co-operative Society, had filed its return of income for A.Y. 2015-16, declaring total income of ?16,85,525, which was selected for scrutiny. The AO denied the deduction, stating that interest income from Co-operative Bank and other banks was not eligible for deduction u/s 80P of the Act. The Ld.CIT(A) upheld the AO's decision, emphasizing that the interest earned did not fall under the purview of a "Cooperative Society." The assessee contended that similar cases had ruled in favor of considering Co-operative Banks as Co-operative Societies for deduction purposes. The Tribunal analyzed previous decisions and concluded that interest income earned from Co-operative Banks would be eligible for deduction u/s 80P(2)(d) of the Act. The Tribunal found no contrary binding decision or material to overturn the previous rulings, thus allowing the assessee's appeal. The key issue revolved around the interpretation of whether interest income earned from Co-operative Banks could be considered for deduction u/s 80P(2)(d) of the Act. The AO and Ld.CIT(A) had denied the deduction, arguing that Co-operative Banks did not fall under the definition of a "Co-operative Society." However, the Tribunal referred to previous decisions, such as the case of The Veer Cooperative Group Housing Society Ltd., which recognized Co-operative Banks as Co-operative Societies for deduction purposes. The Tribunal also cited the case of Lady Ratan Tower Cooperative Housing Society Ltd., which supported the eligibility of interest income from investments held with Co-operative Banks for deduction u/s 80P(2)(d) of the Act. By relying on these precedents and finding no contradictory judgments, the Tribunal allowed the deduction for the interest income earned by the assessee on deposits held with Banks. In conclusion, the Tribunal's judgment favored the assessee by allowing the claim of deduction u/s 80P(2)(d) of the Act for interest income earned from Co-operative Banks and other banks. The Tribunal's decision was based on the interpretation of previous rulings that recognized Co-operative Banks as Co-operative Societies for the purpose of claiming deductions. The Tribunal found no conflicting judgments or material to overturn the established precedent, leading to the allowance of the assessee's appeal and the direction to consider the interest income for deduction u/s 80P(2)(d) of the Act.
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