Nagini Co-operative Credit Society Vs ITO (ITAT Bangalore)
ITAT Bangalore held that the interest income received by way of mandatory / statutory deposits would also eligible for deduction u/s. 80P(2)(a)(i) of the Income Tax Act by treating the said income as business income. Accordingly, appeal of the assessee allowed.
Facts- The assessee is a co-operative society registered under the provisions of the Karnataka Co-operative Societies Act. Post scrutiny assessment, AO denied the claim of deduction made u/s. 80P(2)(d) of the Act on the interest income earned from the deposits made with the Co-operative Banks and treated the said income as income from other sources.
CIT(A) had confirmed the order of the AO. Being aggrieved, the present appeal is filed.
Conclusion- Held that the interest income received by way of mandatory / statutory deposits would also eligible for deduction u/s. 80P(2)(a)(i) of the Act by treating the said income as business income. Thus, we are of the view that the order of the authorities below are liable to be set aside and again we remit the issue to the AO to consider the statutory deposit plea as well as the judgment of the Hon’ble Karnataka High Court in case of Lalitamba Pattina Souharda Sahakari Niyamita vs. ITO supra and thereafter decide the issue afresh, after giving notice to the assessee. In the result, the appeals filed by the assessee are allowed for statistical purposes.
