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2014 (8) TMI 946 - AT - Income TaxDeduction u/s. 80P(2)(a)(i) - Held that:- In the case of Ramanathapuram District Co-op Central Bank Ltd. (2001 (10) TMI 9 - SUPREME Court), the question of whether the subsidies received from the Government is to be considered for deduction u/s. 80P(2)(a)(i) was the subject matter before the Hon'ble Supreme Court and the Hon'ble Supreme Court after considering the entire issue, held that the subsidies received from the Government are to be treated as business income of the assessee and is entitled for deduction under section 80P(2)(a)(i) of the I.T. Act. In view of the above judgment of the Hon'ble Supreme Court in the case of Ramanathapuram District Co-op Central Bank Ltd. (2001 (10) TMI 9 - SUPREME Court), we are inclined to decide the issue in favour of the assessee. Interest earned on fixed deposits with the Co-operative Bank, cant be considered as business income. It is to be considered as income from other sources as held by the Hon'ble Supreme Court in the case of Totgars Co-operative Sale Society Ltd. v. ITO (2010 (2) TMI 3 - SUPREME COURT) wherein it was held that the assessee being Co-operative Society is engaged in providing credit facilities to its members or marketing agricultural produce of its members, interest earned by it by investing surplus funds in short term deposits would fall under the head "income from other sources" taxable u/s. 56 of the I.T. Act and it cannot be said to be attributable to the activities of the Society and therefore, the interest did not qualify for deduction u/s. 80P(2)(a)(i) of the I.T. Act. - assessee has earned interest income on fixed deposits made by the assessee in a Co-operative Bank and the interest income earned on the surplus funds of the assessee cannot be considered as business income so as to be entitled for deduction u/s. 80p(2)(a)(i) - Decided partly in favour of assessee.
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