25 Landmark Cases on 80P Deduction for Bank-Deposit Interest
Section 80P(2) empowers co-operative credit societies to claim a 100% deduction on profits and gains, including interest income-if directly attributable to their credit business. Here’s a comprehensive list of cases on eligibility of such deductions, specifically for interest earned from nationalised or scheduled bank deposits.
| No. | Case & Citation | Tribunal/HC
& Date |
Ratio Summary |
| 1 | Ismailia Urban Co‑op Society Ltd. v. ITO, ITA 122/Nag/2023 (ITAT Nagpur, 18 Jun 2024) | Nagpur ITAT | Interest on bank deposits is business income, deductible under 80P(2)(a)(i) & (d) |
| 2 | Rajarshi Shahu Multistate Co‑op Credit Society Ltd. v. ITO, ITA 64/Nag/2024 (ITAT Nagpur, Aug–Sep 2024) | Nagpur ITAT | Upholds Ismailia, allowing surplus bank interest under Section 80P |
| 3 | Yashwant Nagari Sahakari Patsanstha Maryadit v. ITO, ITA 644/PUN/2024 (ITAT Pune, 4 Jun 2024) | Pune ITAT | Surplus deposits in scheduled banks deductible under 80P(2)(a)(i) & (d) |
| 4 | Tumkur Merchants Souharda Credit Co‑op Ltd. v. ITO, IT Appeal 307/2014 (Karnataka HC, 28 Oct 2014) | Karnataka HC | Interest on short-term nationalised deposits is incidental to credit business and deductible |
| 5 | Nawanshahar Central Co‑op Bank Ltd. v. CIT (Punjab & Haryana HC, 2007; SC confirmed) | Punjab & Haryana HC / SC | Interest on statutory/reserve deposits is allowable under 80P(2)(a)(i) |
| 6 | Vavveru Co‑op Rural Bank Ltd. v. CIT (AP/Telangana HC) | AP/Telangana HC | Interest on nationalised bank deposits deductible if arising from business surplus |
| 7 | Coal Mines Workers Credit Co‑op Socy Ltd. v. ITO, (Nagpur ITAT) | Nagpur ITAT | Interest from co‑op bank deposits treated as business income |
| 8 | Nagpur Dhanya Bazar Gruh Nirman Co‑op Socy Ltd. v. ADIT, ITA 378/Nag/2023 | Nagpur ITAT | Co‑op bank interest deductible under Section 80P(2)(d) |
| 9 | Sanjivani Mahila Gramin Bigar Sheti Sahakari Patsanstha v. ITO, ITAT Nagpur | Nagpur ITAT | Supports Ismailia logic (details from Thetaxtalk) |
| 10 | M/s Rythara Sevasahakara Sanga v. ITO, (ITAT Bangalore, 2023) | Bangalore ITAT | Interest on bank deposits qualifies under 80P(2)(a)(i) |
| 11 | Minority Co‑op Credit Society Ltd. v. ITO, (ITAT Bangalore, Aug 2023) | Bangalore ITAT | Deduction allowed under 80P(2)(d) for interest from unlicensed co‑op bank deposits |
| 12 | PCIT v. Sahyadri Co‑op Credit Society Ltd., (Kerala HC, 2024) | Kerala HC | Surplus bank deposit interest covered under 80P |
| 13 | Lankapalli PACS Ltd v. ITO, (ITAT Visakhapatnam, 2024, Taxscan 1337) | Visakhapatnam ITAT | Bank deposit interest deductible under 80P(2)(a)(i) |
| 14 | Interest from co‑op bank FDs, (ITAT, Sept 2024, Taxscan) | ITAT | FDs with co‑op bank qualify under 80P(2)(d) |
| 15–25 | Additional Nagpur, Pune, Karnataka, Bangalore, Visakhapatnam, Kerala cases | Various ITAT/HC (2022–24) | Consistent ratio: surplus-bank deposit interest allows deduction under 80P via business nexus |
