Case Law Details
Farmers Agriculture Credit Co-operative Society Ltd Vs ITO (ITAT Bangalore)
The case of Farmers Agriculture Credit Co-operative Society Ltd. vs ITO revolves around the interpretation and application of Section 80P(2)(a)(i) of the Income Tax Act, 1961, concerning the eligibility of co-operative societies for tax deductions on their income. The society in question, registered under the Karnataka Co-operative Societies Act, 1959, had filed appeals against the orders of the Commissioner of Income Tax (Appeals) for the assessment years 2016-17 and 2018-19.
The primary issue in both appeals was whether the interest income earned by the co-operative society from its investments with the State Bank of India (SBI) was eligible for deduction under Section 80P(2)(a)(i). The Income Tax Officer (ITO) had treated this interest income as taxable under the head “Income from Other Sources,” denying the society the benefit of deduction under Section 80P(2)(a)(i).
Arguments and Findings
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