The Mumbai Bench of the Income Tax Appellate Tribunal, ITAT in the case Oberoi Spring Co–operative Versus Income Tax Officer observed and has allowed the income tax deduction as stated under Section 80P(2)(d) of the Income Tax Act, 1961 on the entire amount of the interest income which is being received from the Co-operative Bank.
The bench comprising of Judicial Member, Sandeep Singh Karhail and the Accountant Member, S. Rifaur Rahman in the case observed and has found that CIT(A) granted the relief to the assessee, wherein the court allowed the deduction under Section 80P(2)(d) on the entire interest income received by the assessee from the Co-operative Bank, wherein it included the amount which is credited to the balance sheet.
In the present case, the assessee being a cooperative housing society, the non-profit entity which is being formed with the objective of maintaining and protecting the buildings which are occupied by its members. Therefore, the assessee filed its return of income, declaring a total income and also the return of income filed by the assessee was selected for scrutiny, and statutory notices issued as stated under section 143(2) and section 142(1), along with the questionnaire, were being issued and served by the court on the assessee.
Further, the Assessing officer in the case disallowed the deduction which are claimed by the assessee as stated under Section 80P(2)(d) in respect of interest income received from the Co-operative Bank and disclosed in the return of income. Therefore, the Assessing officer disallowed the interest income which is directly being credited by the assessee to the reserves and surplus in the balance sheet as per the Co-operative Societies Act.
It has also been noted by the Tribunal in the case that the interest accumulated on the Sinking Fund and Reserve Fund is to be credited to the respective fund accounts only, according to the Maharashtra Co-operative Societies Act, 1960.
Further, the Tribunal held there being no such material available on record to show that the findings of CIT (A) have been overruled.
Accordingly, the tribunal allowed the appeal of the assessee.
The counsel, Vijay Mehta appeared foe the petitioner.
The counsel, Chetan Kacha represented the respondent.