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| The Tax Publishers2019 TaxPub(DT) 1156 (Visakhapatnam-Trib) INCOME TAX ACT, 1961
Section 80P(2)(a)(i)
Interest income received by assessee society by depositing surplus funds collected from the members was having nexus with assessee's business of extending credit facilities to its members and, therefore, such interest was assessee's business income and was accordingly, eligible for deduction under section 80P(2)(a)(1).
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Deduction under section 80P(2)(a)(i) - Co-operative society - Interest on surplus funds deposited with bank - Business nexus
Assessee, a primary agricultural Co-op. Credit Society extending credit facility to its members, claimed deduction under section 80P(2)(a)(i) in respect of interest earned on surplus funds deposited with bank. AO treated the same as income from other sources and accordingly, denied deduction.Held: Interest income received by assessee society by depositing surplus funds collected from the members was having nexus with assessee's business of extending credit facilities to its members and, therefore, such interest was assessee's business income and was accordingly, eligible for deduction under section 80P(2)(a)(1).
Relied:CIT v. Andhra Pradesh State Co-op. Bank Ltd. (2011) 336 ITR 516 (AP-HC) : 2012 TaxPub(DT) 400 (AP-HC) and Kakinada Co-op. Building Society Ltd. v. Addl. CIT ITA Nos. 348 & 349/VIZ/2013, dt. 22-1-2016.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2008-09
IN THE ITAT, VISAKHAPATNAM BENCH
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