Interest income received from Co-operative Bank is eligible for deduction Under Section 80P(2)(d)  

There are various cases wherein the assessing officer is denying the claim of the credit cooperative society towards interest income received from Co-operative Bank. The reason given is that it is received from co-op bank and deduction is admissible only if it is received from cooperative society.

Here is an interesting case which is decided in favour of assessee by holding that it is eligible for deduction Under Section 80P(2)(d)

However, in this case even though the assessee’s claim of deduction under section 80P(2)(d) of the Act is allowable, however, since the assessee has failed to qualify the additional condition imposed by section 80A(5), the assessee would not be entitled to claim said deduction, even if, otherwise the assesssee is eligible for deduction under section 80P(2)(d).

ITAT MUMBAI

RAJ TARANG 1 HOUSING SOCIETY VERSUS INCOME TAX OFFICER, WARD 32 (3) (1) , MUMBAI AND M/S. GURU TEGHBAHADUR CO-OP CREDIT SOCIETY LTD. VERSUS INCOME TAX OFFICER, WARD 26 (1) (5) , MUMBAI

ITA No. 3946/MUM/2019 And ITA No. 3947/MUM/2019

Th issue was regarding the Claim of deduction u/s 80P(2)(d)

Interest income was received by co-op society from Co-operative Bank

Assessee has not made claim of deduction u/s 80P in the return of income

ITAT has held as under:

Where the claim of deduction under section 10A/10AA/10B/10BA or any provisions of Chapter VIC is not made in the return of income, the deduction shall not be allowed to the assessee.

In the present case the assessee has claimed deduction under section 80P(2)(d) of the Act in respect of interest income from Co-operative Bank by way of note during assessment proceedings. Section 80P falls under Chapter VI-C, therefore, the provisions of section 80A(5) precludes the assessee to make claim of deduction under section 80P from any other mode other than the return of income.

It would be relevant to mention here that this appeal was refixed for hearing especially to give an opportunity to the ld.Authorized Representative of the assessee to make his submissions to counter the provisions of section 80A(5) of the Act.

The ld.Authorized Representative of the assessee filed a Paper Book giving written submissions and giving list of case laws primarily on admission of additional ground and new claim legally admissible during appellate proceedings.

In the present case even though the assessee’s claim of deduction under section 80P(2)(d) of the Act is allowable, however, since the assessee has failed to qualify the additional condition imposed by section 80A(5), the assessee would not be entitled to claim said deduction, even if, otherwise the assessee is eligible for deduction under section 80P(2)(d)

From the literal interpretation of provisions of Section 80A(5) it is explicitly clear that for claiming deduction under Chapter VIC, the precondition is making a claim of deduction in the return of income.

With this, the issue was decided against assessee.

Concussion: – Interest income received from Co-operative Bank is eligible for deduction Under Section 80P(2)(d)