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Cooperative society entitled to Section 80P(2)(d) deduction on interest from cooperative bank deposits ITAT Chennai allowed deduction u/s 80P(2)(d) for interest earned from deposits with Chennai Central Cooperative Bank. The tribunal held that cooperative ...
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Cooperative society entitled to Section 80P(2)(d) deduction on interest from cooperative bank deposits
ITAT Chennai allowed deduction u/s 80P(2)(d) for interest earned from deposits with Chennai Central Cooperative Bank. The tribunal held that cooperative banks registered under state cooperative society acts fall outside the exclusion provision of Section 80P(4), which specifically excludes only cooperative banks engaged in banking business with RBI licenses. Following SC precedent in Mavilayi Service Co-operative Bank Ltd., the tribunal ruled the assessee cooperative society was entitled to the deduction, deciding in favor of the assessee.
Issues Involved: The judgment addresses the issue of disallowance of deduction u/s. 80P(2)(d) of the Income Tax Act, 1961, concerning interest earned from deposits made with Chennai Central Cooperative Bank for assessment years 2017-18 and 2018-19.
Issue 1: Disallowance of Deduction u/s. 80P(2)(d) The appeals arose from separate orders by the Commissioner of Income Tax (Appeals) regarding disallowance of deduction u/s. 80P(2)(d) for interest earned from deposits with Chennai Central Cooperative Bank. The Assessing Officer disallowed the deduction based on Supreme Court precedents and added the amount to the assessee's income. The CIT(A) upheld this decision, citing section 80P(4) and considering the interest income as part of the cooperative society's business. The Tribunal referred to relevant case laws and concluded that the assessee, being a cooperative society not engaged in banking activities, is entitled to the deduction u/s. 80P(2)(d). The Tribunal directed the Assessing Officer to allow the deduction, thereby allowing both appeals of the assessee.
In conclusion, the judgment from the Appellate Tribunal ITAT Chennai dealt with the disallowance of deduction u/s. 80P(2)(d) for interest earned from deposits with Chennai Central Cooperative Bank. The Tribunal ruled in favor of the assessee, emphasizing the cooperative nature of the society and its entitlement to the deduction under the Income Tax Act.
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