Are certain Co-operative Banks like Saraswat Bank etc, a Co-operative society

[RAJESH SANGHVI]

The ITO has taken a view that Saraswat Co-op Bank or Shamrao Vithal Co-op Bank ( or Maharashtra state Co-operative Bank ) are Co-operative banks but they ARE NOT CO-OPERATIVE SOCIETIES. Hence if any co-operative housing society (CHS) earns interest from these co-op banks, the said CHS is not entitled to 100% deduction of that interest u/s 80P(2)(d) because this section speaks of earning interest from Co-operative societies and NOT co-operative banks. My stand is captured u/s 2(10) of the Maharashtra co-operative Societies Act 1960 ( which defines Co-op Bank ) and these banks are societies under the Multi State Co-op Soc Act 2002. Hence they are co-op bank and also Co-op Societies. Hence CHS should get benefit of full 100% deduction u/s 80P(2)(d)..

AI Summary

Co operative society status determines whether interest from cooperative banks qualifies for the cooperative interest deduction.
The central issue is whether cooperative banks qualify as co operative societies for the purpose of the cooperative society interest deduction. The assessing officer treats such banks as not being cooperative societies, denying full deduction to cooperative housing societies on interest received; the taxpayer relies on cooperative statutes classifying cooperative banks as societies, which-if accepted-would render the interest eligible for the deduction.