Interest received on FDR with another cooperative society is deductible u/s 80P(2)(d)

Urapar Coop. Agri. Service Society Ltd Vs ACIT (ITAT Amritsar)

ITAT Amritsar held that interest on FDR’s received by co-operative society by investing in another co-operative society is eligible for deduction under section 80P(2)(d) of the Income Tax Act.

Facts- The assessee is a co-operative agricultural service society dealing in the business of providing credit facility to its members and it is formed for the purposes of development of agriculture.

During A.Y. 2017-18, the assessee deposited its reserve funds with The Nawanshahr Central Co-operative Bank Ltd in the shape of FDR and Saving Bank Account. The assessee received interest from the Banks during the year under consideration to the tune of Rs. 1,35,63.303/-. The AO had denied deduction of a sum of Rs. 54,00,164/- out of the said interest income claimed by the appellant from Banks under section 80-P(2)(d) of the Income Tax Act, 1961, by applying the provisions of sub- section 4 of section 80-P of Act.

Ld. CIT(A) has confirmed the finding of the AO. Being aggrieved, the present appeal is filed.

Please become a Premium member. If you are already a Premium member, login here to access the full content.