The Mumbai ITAT allowed income tax deduction on the interest income earned from the cooperative banks.

The assessee has filed this appeal challenging the order dated 22- 05-2023 passed by CIT(A), National Faceless Appeal Centre, Delhi and it relates to the assessment years 2017-18. 

The assessee is aggrieved by the decision of CIT(A) in confirming the disallowance of deduction claimed under section 80P(2)(d) in respect of interest income earned from deposits kept with the co-operative banks.

CBDT Circular No. 14, dated 28.12.2006 also makes it clear beyond any scope of doubt that the purpose behind enactment of sub-section (4) of Sec. 80P was that the co-operative banks which were functioning at par with other banks would no more be entitled for claim of deduction under Sec. 80P(4) of the Act

The tribunal relied on the decision in the case of Kaliandas Udyog Bhavan Premises Co-op Society Ltd vs. ITO in which it was held that the interest received from co-operative banks by a co-operative society is eligible for deduction u/s 80P(2)(d) of the Act.

Case Title: The Marol Co-operative Industrial Estate Limited V/s ACIT