INCOME TAX ACT, 1961

Section 80P

Deduction under section 80P - Co-operative society - Interest income derived from co-operative/nationalized banks -

AO disallowed assessee's society's claim of deduction under section 80P in respect of interest income derived from co-operative/nationalized banks. On appeal, CIT (A) confirmed such disallowance. Held: Though co-operative banks, other than primary agricultural credit society or a primary co-operative agricultural and rural development bank, are not eligible for deduction pursuant to insertion of section 80P(4) with effect from 1-4-2007, but this provision does not dent the otherwise eligibility under section 80P(2)(d) of a co-operative society on interest income on investments/deposits parked with a co-operative bank, which is a registered co-operative society as per section 2(19), defining co-operative society to mean a co-operative society registered under Cooperative Societies Act, 1912 or under any law for the time being in force. Hence, assessee was entitled to deduction under section 80P in respect of interest income derived from co-operative/nationalized banks.

Relied on:The Mavilayi Service Cooperative Bank Ltd. & Ors. v. CIT & Anr. (2021) 431 ITR 1 (SC) : 2021 TaxPub(DT) 0273 (SC) and Dy. CIT v. Bhimashankar Sahakari Sakhar Karkhana Ltd. [ITA No. 615/PUN/2022, dated 21-12-2022] : 2023 TaxPub(DT) 799 (Pune-Trib)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2016-17

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