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2016 (10) TMI 1154 - AT - Income TaxClaim of deduction u/s. 80P(2) disallowed - Held that:- The Hon’ble High Court of Kerala in the case of Chirakkla Service Coop Bank Ltd. [2016 (4) TMI 826 - KERALA HIGH COURT] had held that a primary agricultural credit society, registered under the Kerala Cooperative Societies Act, 1969 is entitled to the benefit of deduction u/s. 80P(2). Thus we hold that the assessee-Society is entitled to the benefit of deduction u/s. 80P(2) of the Act. Interest received from the Government Treasury - to be included under the head “income from other sources” or “income from business - Held that:- In the instant case, the assessee is a cooperative Bank. The investment in treasury/banks and earning interest on the same is part of the banking activity of the assessee’s cooperative bank. Therefore, the said income is eligible for deduction u/s 80P(2)(a)(i) of the Act. Therefore, the Income Tax Authorities were not justified in treating interest income received by the assessee as ‘income from other source’ and denying the benefit of section 80P(2) of the Act. Thus this ground of the assessee is allowed.
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