Lankapalli PACS Ltd Vs ITO (ITAT Visakhapatnam)
ITAT Visakhapatnam held that the cooperative society is eligible for deduction U/s. 80P(2)(a)(i) of the Income Tax Act on the interest income received from investment in banks. Thus, appeal allowed.
Facts- The assessee is a Primary Agricultural Cooperative Society engaged in the activity of providing credit facilities to its members. As per the information available with the Department, the Ld. AO observed that during the previous year under consideration, the assessee had earned an interest income of Rs. 1,28,27,351/- out of which Rs. 22,77,972/- is from the investment with banks including District Central Cooperative Banks and has claimed the entire interest income as deduction U/s. 80P(2)(a)(i) / 80P(2)(d) of the Act. AO did not consider the submissions of the assessee and held that the assessee’s claim for deduction with respect to interest income earned from different cooperative banks, commercial banks and other financial institutions is not found to be allowable deduction under any provisions of section 80P of the Act. Accordingly, AO brought to tax the entire interest income of the assessee of Rs. 22,77,972/- as income from other sources.
CIT(A)-NFAC dismissed the appeal of the assessee and sustained the addition made by the AO. Being aggrieved, the present appeal is filed.
