Case Law Details
Canara Bank Staff Credit Co-operative Society Ltd. Vs ITO (ITAT Bangalore)
Introduction: A recent case before the Income Tax Appellate Tribunal (ITAT) Bangalore has re-examined the eligibility of co-operative societies for a deduction under Section 80P(2)(a)(i) of the Income Tax Act. The issue in question revolved around investments made by the co-operative societies as per the Karnataka Co-operative Societies Act and whether these investments are entitled to a tax deduction.
Detailed Analysis: The case involved Canara Bank Staff Credit Co-operative Society Ltd., registered under the Karnataka Co-operative Societies Act, 1959. For the assessment year 2017-18, the society claimed a deduction under Section 80P(2)(a)(i) of the Income Tax Act amounting to Rs. 68,03,876.
However, during the assessment, the assessing officer (AO) disallowed a portion of the claimed deduction under Section 80P(2)(a)(i) by treating it as income from other sources. The AO argued that the interest income received by the society was generated from investments made with banks and, as a result, the society was not entitled to the deduction.
The AO relied on a judgment from the Hon’ble jurisdictional High Court in a similar case, further supporting his disallowance of the deduction.
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