Section 80P Deduction Allowed on Bank Interest Amid Conflicting HC Views

Bilari Cooperative Cane Union Vs ITO (ITAT Delhi) The appeal concerned the allowance of deduction under Section 80P for Assessment Year 2020-21. The assessee, a cooperative society, earned interest income of Rs.76,92,252 from surplus deposits held in scheduled/nationalized banks. The Assessing Officer, upheld by the CIT(A)/NFAC, denied the Section 80P deduction, holding that interest from fixed deposits did not arise from an eligible business activity under Section 80P(2) and should instead be taxed as income from “other sources.” During the hearing before the ITAT, the assessee cited judi...