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2024 (9) TMI 577 - AT - Income TaxDeduction u/s. 80P(2)(d) - interest received from investment in the said co-operative bank - HELD THAT - We note that ITAT Mumbai Bench in assessee s own case in Blue Rose Co-operative Society Limited 2024 (7) TMI 1082 - ITAT MUMBAI has considered the identical issue and held that the interest earned by way of interest or dividend from investments made with any other co-operative bank is allowable as deduction u/s. 80P(2)(d) in assessee s own case for the A.Y. 2020-21. Nothing has been brought to our notice that the investee co-operative bank which is also a co-operative society is in possession of License from RBI to do banking business and did function at par with other commercial bank. The assessee is thus entitled for the benefit u/s 80P(2)(d) of the Act. The aforesaid point is accordingly determined in favor of the assessee and against the revenue. The impugned order passed by learned CIT(A), thus cannot be sustained. Hence, the appeal is liable to be allowed.
Issues Involved:
1. Condonation of delay in filing the appeal. 2. Eligibility of deduction under Section 80P(2)(d) of the Income-tax Act, 1961, for interest income received from investments in co-operative banks. Issue-wise Detailed Analysis: 1. Condonation of Delay in Filing the Appeal: The appellant filed an appeal with a delay of 201 days, attributing the delay to the failure of the society's manager to inform the managing committee/chartered accountant about the impugned order. The Tribunal condoned the delay in the interest of justice and fair play, noting that the appellant had provided a reasonable explanation supported by an affidavit from the Honorary Secretary of the society. 2. Eligibility of Deduction Under Section 80P(2)(d) of the Income-tax Act, 1961: The primary issue for determination was whether the appellant, Blue Rose Industrial Premises Co-operative Society Ltd., was entitled to a deduction of Rs. 37,45,701/- under Section 80P(2)(d) of the Act for interest received from investments in co-operative banks. Arguments by the Appellant: - The appellant argued that the issue was covered by a previous order in their own case for A.Y. 2020-21, where the Tribunal had allowed the deduction under Section 80P(2)(d). - The appellant contended that the interest income from investments in co-operative banks should be eligible for deduction as per Section 80P(2)(d) of the Act. Arguments by the Revenue: - The Revenue opposed the condonation of delay and supported the impugned order on merits, arguing that the deduction was not applicable. Tribunal's Findings: - The Tribunal noted that Section 80P(2)(d) allows a deduction for any income by way of interest or dividends derived by a co-operative society from its investments with any other co-operative society. - The Tribunal referred to the definitions under the Income Tax Act, 1961, and the Maharashtra Co-operative Society Act, 1960, which include co-operative banks within the ambit of co-operative societies. - Citing the Supreme Court's judgment in Mavilayi Service Co-operative Bank Limited v. Commissioner of Income Tax, Calicut, and other relevant case laws, the Tribunal emphasized that Section 80P is a beneficial provision intended to promote the growth of the co-operative sector and should be interpreted liberally in favor of the assessee. - The Tribunal also referred to previous decisions of the coordinate benches, which consistently held that interest income from co-operative banks is eligible for deduction under Section 80P(2)(d). Conclusion: - The Tribunal concluded that the appellant was entitled to the deduction under Section 80P(2)(d) for interest income received from investments in co-operative banks. - The Tribunal directed the Assessing Officer to allow the deduction after verification, thereby setting aside the impugned order passed by the CIT(A). Outcome: - The appeals (ITA Nos. 2330/MUM/2024 and 2329/MUM/2024) were allowed. - The impugned orders dated 14.08.2023 and 02.08.2023 were set aside. - The Tribunal directed the Assessing Officer to allow the benefit of deduction under Section 80P(2)(d) as discussed in the judgment. Order Pronounced: - The order was pronounced on 30.08.2024.
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