Case Law Details
Katwa-Kalna Co-Operative Agriculture Vs ITO (ITAT Kolkata)
The Katwa-Kalna Co-Operative Agriculture society appealed against a previous decision disallowing a tax deduction under Section 80P(2)(a)(i) on the grounds that its interest income from fixed deposits was taxable under ‘income from other sources’ rather than derived from business activities. The co-operative society argued that these deposits were made to comply with the West Bengal Cooperative Societies Act provisions, making the interest income a part of their business income and eligible for deduction.
Upon hearing the arguments, the ITAT bench found merit in the co-operative society’s plea. The bench noted that the interest income was earned on on NSC, fixed deposit/certificate of bank as a result of a mandatory business requirement as per the West Bengal Cooperative Societies Act. Therefore, the interest earned from these deposits was indeed a business income, making it eligible for deduction under Section 80P(2)(a)(i).
FULL TEXT OF THE ORDER OF ITAT KOLKATA
The present appeal has been preferred by the assessee against the order dated 28.06.2021 of the National Faceless Appeal Centre [hereinafter referred to as ‘CIT’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). The assessee in this appeal has taken the following grounds of appeal:
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