2016 (7) TMI 1217 - GUJARAT HIGH COURT

Entitlment under sec. 80P(2)(d) of the entire interest received from the cooperative Bank? - Held that:- Section 80P(2)(d) of the Act allows whole deduction of an income by way of interest or dividends derived by the co-operative society from its investment with any other co-operative society. This provision does not make any distinction in regard to source of the investment because this Section envisages deduction in respect of any income derived by the co-operative society from any investment with a co-operative society. It is immaterial whether any interest paid to the cooperative society exceeds the interest received from the bank on investments. The Revenue is not required to look to the nature of the investment whether it was from its surplus funds or otherwise. The Act does not speak of any adjustment as sought to be made out by learned counsel for the Revenue.

The provision does not indicate any such adjustment in regard to interest derived from the co-operative society from its investment in any other co-operative society.

In the present case, the loan was taken for business purpose more particularly purchase of yarn and not for fixed deposits. Questions raised in the present appeals are answered in favour of the assessee and against the revenue