Potheri Village Weaning Food Manufacturing Womens Development Industrial Coop Vs ITO (ITAT Chennai)
ITAT Chennai held that the assessee is a cottage society and the entire income is attributable to business of the society and hence eligible to claim Interest earned on deposit also as deduction U/s.80P(2)(a)(ii) of the Income Tax Act.
Facts- The assessee is a co-operative society formed and managed by the Govt. of Tamilnadu through the department of Social welfare. The Assessee is a cottage Industry assessed as AOP (Co- operative Society) under the Income Tax Act, 1961 and has been allowed deduction u/s. 80P(2)(a)(i) of the Income Tax Act, 1961 on its entire incomes being attributable to the carrying on the business of cottage industry. AO disallowed the interest income of Rs.10,14,372/- received from State Bank of India (Rs.3,42,190/-) and TAICO Bank (Rs.6,72,182/-) being not eligible u/s. 8OP.
CIT(A) confirmed the action of the AO. Being aggrieved, the present appeal is filed.
Conclusion- It is observed that the interest income earned by the society is in its regular course of its operations and does forms part of the revenue ‘attributable’ to the operations of the society as a cottage industry and in our considered view the assessee is eligible for deduction 80P(2)(a)(ii) itself.
