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RU
Interest from Deposits with Co-operative Banks Qualifies for Section 80P(2)(d): ITAT Allows Deduction in Full
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taxguruin
The assessee, a registered co-operative credit society providing credit facilities to its members, had earned interest of ₹1,52,829 from deposits placed with various co-operative banks, including the Kolhapur District Central Co-operative Bank and urban co-operative banks.
The Tribunal examined the statutory scheme of section 80P(2)(d) and the definition of “co-operative society” under section 2(19).
It reiterated that a co-operative bank is also a co-operative society, and therefore interest or dividend income earned from investments with co-operative banks squarely falls within the ambit of section 80P(2)(d).
Since the interest income was undisputedly earned from deposits with co-operative banks, the disallowance was unsustainable.
Perusal of the aforesaid definition would make it clear that cooperative Society means a cooperative society registered under Cooperative Societies Act, 1912 as defined under the Act, be it a co-operative society carrying on banking business or cooperative society carrying on the other business or a cooperative bank.