INCOME TAX ACT, 1961

Section 80P(2)

Deduction under section 80P(2) - Interest income from nationalized bank - Allowability -

Assessee-society was engaged in business of providing credit facilities exclusively to its members and claimed deduction under section 80P. AO disallowed the deduction claimed by assessee alleging that assessee-society had received interest income out of which interest income from nationalized bank, which was other than Co-operative Society and claimed deduction under section 80P was in contravention to the provisions. Held: Issue was settled by High Court in case of State Bank of India [(2016) 72 taxmann.com 64 (Guj) : 2016 TaxPub(DT) 3564 (Guj-HC)] and assessee was not entitled for such deduction. Only thing which requires to be done was re-determination or quantification of amount which was to be disallowed out of interest income from the scheduled bank. AO should work out net interest income from the deposits with scheduled bank, and thereafter grant deduction under section 80(2)(d).

REFERRED : State Bank of India (SBI) v. CIT (2016) 72 taxmann.com 64 (Guj) : 2016 TaxPub(DT) 3564 (Guj-HC) Commissioner Of Income Tax v. Sabarkantha District Cooperative Milk Producers Union Ltd. [Tax Appeal No. 473 of 2014, dt. 16-6-2014 Sahyog Co. Op. Credit Society Ltd. v. DCIT [I.T.A. No. 1132/Ahd/2018, I.T.A. No. 1277/Ahd/2018, dt. 29-11-2019] The Lunawada Taluka Primary School Teachers Co-op Credit Society Ltd. v. ITO [M.A. No. 263/Ahd/2018 (In ITA No. 97/Ahd/2017), M.A. No. 264/Ahd/2018 (In ITA No. 98/Ahd/2017), dt. 13-2-2019]

FAVOUR : In assessee's favour by way of remand

A.Y. :

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