U/s 80P relief on bank interest: ITAT follows Tumkur, rejects Totgars

Basaveshwara Pattina Souharda Sahakari Sangha Ni. Vs ITO (ITAT Bangalore) The ITAT Bangalore held that interest income earned by a credit co-operative society from deposits with co-operative banks and societies is eligible for deduction under section 80P(2)(a)(i), treating it as business income attributable to providing credit facilities to members. In this case, the assessee earned interest of ₹2.22 crore from investments of surplus funds and claimed deduction under section 80P. The AO and CIT(A) denied the claim, treating such income as “income from other sources” and relying on the Ka...