INCOME TAX ACT, 1961

Section 80P(2)(d)

Deduction under section 80P(2)(d) - Allowability - Interest income from investment of idle funds with cooperative bank earned by Co-operative society -

Assessee, a co-operative housing society, claimed deduction under section 80P(2)(d) as regards interest income on sweep fixed deposit with Co-operative Bank. AO took the view that Co-operative Banks were deemed not to be Co-operative Society for the purpose of 80P(2)(d) and therefore, AO declined assessee's claim.Held: Purpose behind enactment of sub-section (4) of section 80P was to provide that co-operative banks which are functioning at par with other banks would no more be entitled for claim of deduction under section 80P(4). But, this was in context of section 80P(2)(a)(i), and not on the entitlement of a co-operative society towards deduction under section 80P(2)(d) on interest income on investments parked with a Co-operative Bank. Accordingly, assessee was entitled for claim of deduction under section 80P(2)(d) in respect of interest income on the investment made with Co-operative Bank.

Relied:Kaliandas Udyog Bhavan Premises Co-op Society Ltd., v. ITO-21 (2) (1) 2018 TaxPub(DT) 3128 (Mum-Trib)

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2015-16

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