2023 (3) TMI 718 - AT - Income Tax

Appeal Allowed: Deduction u/s.80P(2)(d) Granted for Interest & Dividend Income

The appeal was allowed, and the deduction u/s.80P(2)(d) for interest and dividend income from Pune District Central Co-operative Bank was granted by the ... Deduction under section 80P(2)(d) of the Income-tax Act - Eligibility of income from deposits/investments with a co-operative bank - Co-operative society registered under the Co-operative Societies Act - Effect of insertion of section 80P(4) on deduction under section 80P(2)(d) - Precedential value of Division Bench decision of the TribunalDeduction under section 80P(2)(d) of the Income-tax Act - Eligibility of income from deposits/investments with a co-operative bank - Co-operative society registered under the Co-operative Societies Act - Deduction under section 80P(2)(d) allowed in respect of interest and dividend income received from Pune District Central Co-operative Bank for Assessment Year 2018-19. - HELD THAT: - The Tribunal examined whether interest and dividend earned by the assessee (a co-operative society) from deposits/investments with Pune District Central Co-operative Bank qualify for deduction under section 80P(2)(d). It was observed that Pune District Central Co-operative Bank is a registered co-operative society within the meaning of the definition of co-operative society, and therefore income arising from deposits/investments with such a bank falls within the scope of section 80P(2)(d). The Tribunal followed the Division Bench decision of the Pune Bench in Rena Sahakari Sakhar Karkhana Ltd. v. Pr.CIT , which held that the insertion of section 80P(4) (w.e.f. 1-4-2007) excluding certain co-operative banks from specified deductions does not negate the independent eligibility under section 80P(2)(d) of a co-operative society to claim deduction in respect of interest income on investments/deposits parked with a co-operative bank that is a registered co-operative society. Applying that precedent, the Tribunal found the Assessing Officer and the CIT(A) erred in denying the deduction and directed grant of deduction under section 80P(2)(d) on the interest and dividend income received from the Pune District Central Co-operative Bank.Impugned order set aside; deduction under section 80P(2)(d) granted in respect of interest and dividend income from Pune District Central Co-operative Bank for AY 2018-19.Final Conclusion: The appeal is allowed and the deduction under section 80P(2)(d) is directed to be granted in respect of interest and dividend income earned from Pune District Central Co-operative Bank for Assessment Year 2018-19. Issues involved: The only issue raised in this appeal is against not allowing deduction u/s.80P(2)(d) in respect of interest and dividend income from another cooperative bank.Summary:Issue 1: Deduction u/s.80P(2)(d) for interest and dividend income from cooperative bankThe assessee appealed against the order disallowing deduction u/s.80P(2)(d) for interest and dividend income from Pune District Central Cooperative Bank. The Assessing Officer and CIT(A) did not allow the deduction based on a judgment of the Supreme Court. The Tribunal noted that co-operative societies are eligible for deduction u/s.80P(2)(d) for interest income on investments/deposits with a co-operative bank. Referring to a previous decision, the Tribunal held that the provision of section 80P(4) does not affect the eligibility of co-operative societies for deduction u/s.80P(2)(d). As Pune District Central Co-operative Bank is a registered co-operative society, the Tribunal directed to grant deduction u/s.80P(2)(d) for the interest and dividend income earned from the bank. The appeal was allowed, overturning the previous order.Conclusion:The appeal was allowed, and the deduction u/s.80P(2)(d) for interest and dividend income from Pune District Central Co-operative Bank was granted by the Tribunal.