INCOME TAX ACT, 1961

Section 80P(2)(d)

Deduction under section 80P(2)(d) - Co-operative society - Interest received from co-operative bank - Allowability of

In the course of processing of return under section 143(1), AO disallowed assessee's claim of deduction under section 80P(2)(d), being the interest income from co-operative bank. On appeal, CIT(A) confirmed this disallowance by the AO. Held: That a cooperative society will not get exemption on the interest earned on deposits in cooperative bank is not something which is a subject-matter of adjustment under section 143(1)(a). Besides, on merit also, such disallowance is not permissible in view of Apex Court's decision in the case of Mavilayi Service Cooperative Bank Ltd. & Ors. v. CIT & Ors. [Civil Appeal Nos. 7343-7350 of 2019, dt. 12-1-2021] : (2021) 431 ITR 1 (SC) : 2021 TaxPub(DT) 0273 (SC). In view of this, AO was directed to allow, to the assessee-society, deduction under section 80P(2)(d).

Followed:Mavilayi Service Cooperative Bank Ltd. & Ors. v. CIT (2021) 431 ITR 1 (SC) : 2021 TaxPub(DT) 0273 (SC), Pr. CIT v. The Totagars Co-operative Sale Society (2017) 395 ITR 611 (Kar.) : 2017 TaxPub(DT) 1748 (Karn-HC), The Citizen Co-Operative Society Limited [Civil Appeal No. 10245 of 2017, dt. 8-8-2017), Kerala State Co-Operative Marketing Federation Ltd. & Ors. v. CIT 1998 TaxPub(DT) 1324 (SC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2015-16

INCOME TAX ACT, 1961

Section 80P(2)(c)(ii)

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