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| The Tax Publishers2020 TaxPub(DT) 2737 (Bang-Trib) INCOME TAX ACT, 1961
Section 80P(2)(d)
Where AO denied deduction under section 80P(2)(d) in respect of interest earned from co-operative societies/banks on the ground that interest earned on surplus funds was taxable and not eligible for deduction under section 80P(2)(d), however, it was not clear that whether source of funds was assessee's own funds or out of liability and chargeability of interest income under income from other sources or business income matter was referred back to AO for verification afresh.
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Deduction under section 80P(2)(d) - Co-operative society - Interest earned from co-operative bank/societies - Source of funds not being clear, i.e., as to whether out of own funds or out of liability
Assessee, a co-operative society registered engaged in providing credit facilities to members claimed deduction under section 80P(2)(d). In respect of interest earned from co-operative societies/banks. AO denied claim of assessee, on the ground that interest earned on surplus funds was taxable and not eligible for deduction under section 80P(2)(d).Held: Clearly, source of funds out of which concerned investments were made remained the same for the past several years and therefore, whether source of funds was assessee's own funds or out of liability and chargeability of interest income under income from other sources or business income was not clear and accordingly, matter was referred back to AO for verification afresh.
REFERRED : Tumukur Merchants Souharda Credit Cooperative Ltd., (2015) 230 taxman 309 (Karn) : 2015 TaxPub(DT) 2857 (Karn-HC), Pr. CIT v. Totgars Co-operative Sale Society Ltd., (2017) 395 ITR 611 (Karn.) : 2017 TaxPub(DT) 1748 (Karn-HC)
FAVOUR : Matter remanded.
A.Y. : 2016-17
INCOME TAX ACT, 1961
Section 80P
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