Appeal allowed for deduction under section 80P(2)(d) for interest from cooperative bank

The ITAT allowed the appeal, directing the AO to permit the deduction under section 80P(2)(d) for interest received from a cooperative bank, overturning the CIT(A)'s decision disallowing the claim. The ITAT held that a cooperative bank qualifies as a cooperative society, making the interest income eligible for deduction under section 80P(2)(d). As a result, the appeal was decided in favor of the assessee on 18.02.2020.

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Issues:
- Disallowance under section 80P(2)(d) for interest received from a cooperative bank.

Analysis:
1. The appeal was against the CIT(A)'s order confirming the AO's disallowance of the claim under section 80P(2)(d) for interest received from a cooperative bank.

2. During the hearing, neither the assessee nor their representative attended, leading to the disposal of the appeal after hearing the Ld. D.R. and reviewing the case facts.

3. The sole issue raised was the disallowance of the claim under section 80P(2)(d) by the AO, concerning interest received from a cooperative bank.

4. The AO disallowed the claim as the interest earned from the cooperative bank was not considered eligible under section 80P(2)(d) since it was not from investments in another cooperative society. Consequently, the AO brought the interest income to tax.

5. The Ld. CIT(A) upheld the AO's decision, stating that a cooperative bank is commercial and not within the scope of a cooperative society as per section 80P(2)(d).

6. The ITAT observed that previous judicial decisions established that a cooperative bank is indeed a cooperative society, making interest income accruing to it eligible for deduction under section 80P(2)(d). Citing a relevant case, the ITAT reversed the CIT(A)'s decision and directed the AO to allow the deduction under section 80P(2)(d).

7. Consequently, the appeal of the assessee was allowed, and the order was pronounced in favor of the assessee on 18.02.2020.

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