PCIT Vs Sahyadri Co-Operative Credit Society Ltd (Kerala High Court)
Kerala High Court held that income received by Co-operative Society by way of interest, on deposits of surplus profits earned by it, qualifies for the deduction contemplated under Section 80P(2)(a) of the Income Tax Act.
Facts- The respondent/assessee is a Co-operative Society engaged in the provision of credit facilities to its members. It is a Multi-State Co-operative Society registered under the Multi-State Co-operative Societies Act, 2002, the provisions of which Statute regulate its functioning.
The issue that arises for consideration in the instant case is with regard to its entitlement to deduction in respect of the interest that it earned from deposits that it had made in compliance with the statutory requirements under the Multi-State Co-operative Societies Act. It is not in dispute that the amount of profits and gains of business attributable to its business of providing credit facilities to its members is eligible for the benefit of deduction under Section 80P(2) of the I.T. Act. The question that arises for consideration, however, is whether, on deposit by the respondent/assessee of the amounts that are found to be eligible for deduction under Section 80P(2), with a bank or other permitted institutions, the interest earned by the assessee on such deposits would also be entitled to the benefit of deduction under Section 80P(2) of the I.T. Act?.
