ITAT Allows Income Tax Deduction On The Interest Income Received From The Co-Operative Bank

The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) has allowed the income tax deduction under Section 80P(2)(d) of the Income Tax Act on the entire amount of interest income received from the Co-operative Bank.The bench of Sandeep Singh Karhail (Judicial Member) and S. Rifaur Rahman (Accountant Member) found that CIT(A) granted the relief to the assessee, allowing deduction under Section 80P(2)(d) on the entire interest income received by the assessee from the Co-operative Bank, including the amount credited to the balance sheet.The assessee is a cooperative housing society, a non-profit entity formed with the objective of maintaining and protecting buildings occupied by its members. The assessee filed its return of income, declaring a total income. The return of income filed by the assessee was selected for scrutiny, and statutory notices under sections 143(2) and 142(1), along with the questionnaire, were issued and served on the assessee.The Assessing Officer disallowed the deduction claimed by the assessee under Section 80P(2)(d) in respect of interest income received from the Co-operative Bank and disclosed in the return of income. The AO also disallowed the interest income directly credited by the assessee to the reserves and surplus in the balance sheet as per the Co-operative Societies Act.The tribunal noted that according to the Maharashtra Co-operative Societies Act, 1960, the interest accumulated on the Sinking Fund and Reserve Fund is to be credited to the respective fund accounts only.The tribunal allowed the appeal and held that there is no material available on record to show that the findings of CIT (A) have been overruled.Case Title: Oberoi Spring Co–operative Versus Income Tax OfficerCase No.: ITA no.598/Mum./2023Date: 08/05/2023Counsel For Petitioner: Vijay MehtaCounsel For Respondent: Chetan KachaClick Here To Read The Order

ITAT Allows Income Tax Deduction On The Interest Income Received From The Co-Operative Bank

Mariya Paliwala

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