Co. Op. Banks Are Co. Op. Societies In Banking Business; Delhi ITAT Allows Section 80P(2)(d) Deduction

In a recent decision, the Income Tax Appellate Tribunal (ITAT) allowed Grand Paradi Co-op Housing Society to claim deduction under Section 80P(2)(d) of the Income Tax Act. The tribunal affirmed that cooperative banks qualify as cooperative societies engaged in banking activities under the Maharashtra Cooperative Societies Act. This eligibility extends to societies functioning as agricultural and rural development banks. \r

Section 80P(2)(d) allows deductions for interest or dividends earned by a cooperative society from investments made in other cooperative societies. Despite challenges, including delays in filing appeals and initial denials by the CIT (A), the tribunal ruled in favor of Grand Paradi Co-op Housing Society. It held that the society's interest income from cooperative banks, totaling Rs. 3,013,558, is eligible for deduction. \r

The case underscores the ITAT's interpretation of cooperative banking entities within the ambit of Section 80P(2)(d), supporting cooperative societies' tax benefits on income derived from intra-cooperative investments.