80P Deduction Allowed on Bank Interest – Bang ITAT Follows Karnataka HC, Distinguishes Totgars

Mysore University Employees Co-op Credit Society Ltd. Vs ITO (ITAT Bangalore) The Bangalore ITAT held that interest income earned by a co-operative credit society from bank deposits is eligible for deduction u/s 80P(2)(a)(i), provided the funds are business/operational funds temporarily parked. The AO had denied deduction on interest income (₹6.25 lakh) and other related income by relying on the Supreme Court ruling in Totgars, treating such income as “Income from other sources”. However, the Tribunal noted: The assessee was exclusively engaged in providing credit facilities to members,...