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The Tax Publishers2020 TaxPub(DT) 1648 (Ahd-Trib) INCOME TAX ACT, 1961
Section 80P(2)(a)(i)
Interest earned on fund invested with the bank is not operational income of the assessee earned from providing credit facilities to its members.Further,interest earned by deposit or investment of idle or surplus funds does not change its character irrespective of the fact whether such interest was earned from a scheduled bank or a co-operative bank.Accordingly,AO was justified in denying deduction under section 80P(2)(a)(i).
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Deduction under section 80P(2)(a)(i) - Co-operative society - Interest income on surplus funds deposited with nationalized bank and cooperative bank -
Assessee-society engaged in providing credit facilities to members claimed deduction under section 80P(2)(a)(i) as regards interest income on surplus funds deposited with nationalized bank and cooperative bank. AO denied deduction. Held: Interest earned on fund invested with the bank is not operational income of the assessee earned from providing credit facilities to its members.Further,interest earned by deposit or investment of idle or surplus funds does not change its character irrespective of the fact whether such interest was earned from a scheduled bank or a co-operative bank.Accordingly,AO was justified in denying deduction.
REFERRED : SBI v. CIT (2016) 72 taxmann.com 64 (Gujarat) : 2016 TaxPub(DT) 3564 (Guj-HC)
FAVOUR : In assessee's favour
A.Y. :
IN THE ITAT, AHMEDABAD BENCH
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