INCOME TAX ACT, 1961

Section 80P(2)(d)

Deduction under section 80P(2)(d) - Co-operative society - Allowability as regards interest income on deposits kept with Bombay Mercantile Co-operative Bank Ltd. -

Assessee, a Credit Co-operative Society, claimed deduction under section 80P(2)(a)(i) in respect of interest income of Rs. 16 lakhs earned by assessee on deposits kept with Bombay Mercantile Co-operatie Bank Ltd. AO disallowed deduction.Held: Bombay Mercantile Co-operative Bank cooperative society, i.e., assessee was registered under Maharashtra Co-operative Societies Act and said society had been assessed under section 143(3) as a Co-operative Society and its income was allowed to be exempt under section 80P(2)(i). Therefore, fixed deposits placed with Bombay Mercantile Bank fell within exemption granted by section 80P(2)(d). Assessee was also eligible under section 80P(2)a(i) as funds placed by assessee in the form of fixed deposits could be said to be kept for the purpose of business of assessee as assessee had availed of credit facilities also against such fixed deposits which were again used for the purpose of business of assessee. Therefore, assessee was entitled for deduction under section 80P(2)(d) in respect of interest income earned on deposits kept with Bombay Mercantile Co-operative Bank Ltd.

Relied:Tumkur Merchants Souharda Credit Co-operative Ltd. v. ITO (2015) 55 Taxmann.com 447 (karn-HC) : 2015 TaxPub(DT) 2857 (Karn-HC) and Surat Vankar Sahakari Sangh Ltd. v. Asstt. CIT (2016) 72 Taxmann.com 169 (Guj) : 2016 TaxPub(DT) 3733 (Guj-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2010-11 & 2012-13

SUBSCRIBE FOR FULL CONTENT