Case Law Details
Yuvashakti Nagari Sahkari Path Sanstha Maryadit Rendal Vs ITO (ITAT Pune)
Introduction The Income Tax Appellate Tribunal (ITAT) Pune recently delivered a significant verdict in the case of Yuvashakti Nagari Sahkari Path Sanstha Maryadit Rendal Vs ITO, where the central issue was the non-granting of deduction under Section 80P of the Income Tax Act. This case specifically pertains to the claim of deductions on earned interest income from nominal members and income earned from certain business activities.
Analysis In the case, the cooperative credit society argued that the earned interest income from its nominal members should be granted a deduction under section 80P. The tribunal examined previous precedents such as The Vainganga Nagari Sahakari Pat Sanstha Ltd. Vs. ITO, and found the deduction on interest income received from nominal members has been allowed in these cases. Furthermore, the tribunal took into account that the Kerala Act and Maharashtra Act consider ‘Nominal Members’ within the ambit of ‘Members’, thereby making such interest income eligible for deduction u/s 80P(2)(a)(i).
In respect to the non-granting of deduction on ‘insurance fees’, this issue was not pursued by the appellant. Consequently, it was dismissed as not pressed.
Another point of contention was the non-granting of deduction on the Electricity Commission. The appellant argued that the commission earned from the collection of electricity bills should also be granted deduction under section 80P. The tribunal examined this issue and found precedent where such income was allowed deduction.
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