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| The Tax Publishers2019 TaxPub(DT) 5750 (Bang-Trib) INCOME TAX ACT, 1961
Section 80P
Where interest earned on investment of surplus funds not immediately required in short-term deposits and securities by a Co-operative Society providing credit facilities to members or marketing agricultural produce to members is not business income but income from other sources and the society is not entitled to special deduction, therefore, matter was remanded back to AO for a fresh decision.
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Deduction under section 80P - Allowability - Interest on susurplus funds -
Assessee was a primary agricultural credit society and claimed deduction under section 80P(2)(a)(i) on interest income earned and under section 80P(2)(d) in respect of interest received from co-operative institutions. AO assessed under the head 'Income from Other Sources' and not income from business and denied the deduction claimed by assessee. Held: Supreme Court in [(2010) 322 ITR 283 (SC) : 2010 TaxPub(DT) 1466 (SC)] has held that the benefit of deduction under section 80P(2)(a)(i) is only on income which is assessable under the head 'Income from Business'. Interest earned on investment of surplus funds not immediately required in short-term deposits and securities by a Co-operative Society providing credit facilities to members or marketing agricultural produce to members is not business income but income from other sources and the society is not entitled to special deduction. Hence, matter was remanded back to AO for a fresh decision.
REFERRED : M/s. The Totgars' Co-operative Sale Society Ltd. v. ITO (2010) 322 ITR 283 (SC) : 2010 TaxPub(DT) 1466 (SC) Pr. CIT v. The Totagars Co-Operative Sale Society (2017) 395 ITR 611 (Karn.) : 2017 TaxPub(DT) 1748 (Karn-HC) Tumkur Merchants Souharda Credit Co-operative Ltd. v. ITO (2015) 230 taxman 309 (Karn) : 2015 TaxPub(DT) 2857 (Karn-HC)
FAVOUR : In assessee's favour by way of remand
A.Y. :
IN THE ITAT, BANGALORE BENCH
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