TaxTMI 
TaxTMI 
2026 (2) TMI 1466
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..... The sole grievance of the assessee is against the denial of deduction claimed under section 80P(2)(d) of the Act on the interest income earned from deposits maintained with Co-operative Banks. 4. The brief facts of the case are that the assessee is registered as the Commercial Co-Operative Society under the Maharashtra Co-Operative Societies Act, 1960. The assessee is mainly engaged in collecting maintenance charges on a mutuality basis from its members and meeting the expenses of the society maintenance, such as power consumption, water charges, housekeeping, security, repair and maintenance of building, statutory payments and administrative expenses. For the year under consideration, the assessee filed its return of income on 25/10/2022, declaring a total income of INR 25,90,420, after claiming a deduction under section 80P(2)(d) of the Act in respect of the interest earned from the deposits maintained with various Co-operative Banks. The return filed by the assessee was selected for scrutiny, and statutory notices under section 143(2) and section 142(1) of the Act were issued and served on the assessee. During the assessment proceedings, it was observed that the assessee ha....
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.... Name of Banks Amount Fixed deposit Interest 1) Saraswat Co-operative Bank Lid 70864 2) Shamrao Vithal Co-operative Bank Ltd. 379486 3) NKG Co-operative Bank Ltd 443151 893501 Interest from Co-operative Bank Saving Accounts 1) Saraswat Co-operative Bank Lid 34409 2) Shamrao Vithal Co-operative Bank Ltd 96548 3) North Canara Co-operative Bank Ltd 100448 4) Mumbai District Co-operative Bank Ltd 14392 5) Karur Vyasya Co-cooperative Society Ltd 9010 254807 Grand Total Interest from Co-operative Banks 1148308 8. The interest amounting to INR 11,40,308 received by the assessee from its fixed deposits and saving bank accounts maintained with the aforementioned Co-operative Banks was claimed as a deduction under section 80P(2)(d) of the Act. As per the assessee, the interest income has arisen solely from the surplus maintenance and sinking fund balances placed in the fixed deposits maintained with the Co-operative Banks. 9. We find that while deciding a similar issu....
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....sessee is a Co-Operative Housing Society. Thus, if any income as referred to in sub-section (2) to section 80P of the Act is included in the gross total income of the assessee, the same shall be allowed as a deduction. It is pertinent to note that since the assessee is registered under the Maharashtra Co-operative Societies Act, 1960, it is required to invest or deposit its funds in one of the modes provided in section 70 of the aforesaid Act, which includes investment or deposit of funds in the District Central Co-operative Bank or the State Co operative Bank. Accordingly, the assessee kept the deposits in Co-operative Banks registered under the Maharashtra Co-operative Societies Act and earned interest, which was claimed as a deduction under section 80P(2)(d) of the Act. The AO denied the deduction under section 80P(2)(d) of the Act on the basis that the Co-operative Bank is covered under the provisions of section 80P(4) of the Act. We find that the Hon'ble Supreme Court in Mavilayi Service Co-operative Bank Ltd. v. CIT [2021] 123 taxmann.com 161/279 Taxman 75/431 ITR 1 while analysing the provisions of section 80P(4) of the Act held that section 80P(4) is a proviso to the main p....
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....iety or a primary co-operative agricultural and rural development bank, but however, are unable to subscribe to their view that the same shall also jeopardise the claim of deduction of a co-operative society under sec. 80P(2)(d) in respect of the interest income on their investments parked with a co-operative bank. We have given a thoughtful consideration to the issue before us and are of the considered view that as long as it is proved that the interest income is being derived by a co operative society from its investments made with any other co-operative society, the claim of deduction under the aforesaid statutory provision, viz. sec. 80P(2)(d) would be duly available. We may herein observe that the term 'co-operative society' had been defined under sec. 2(19) of the Act, as under:- '(19) "Co-operative society" means a cooperative society registered under the Co-operative Societies Act, 1912 (2 of 1912), or under any other law for the time being in force in any state for the registration of co-operative societies;' We are of the considered view, that though the co-operative bank pursuant to the insertion of Sub-section (4) of sec. 80P would no m....