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2017 (3) TMI 1610 - AT - Income TaxEntitled for deduction u/s. 80P(2)(a)(i) - Interest earned by the assessee from its deposits placed in Sub-Treasury and banks - Held that:- It may be true that for application of Sec. 80P(2)(a)(i) of the Act assessee was considered as a primary agricultural credit society based on certificate issued by Joint Registrar, Kottayam. In our opinion para 3.2 of the circular reproduced above has accepted the judgment of Hon’ble Apex Court in the case of CIT vs. Nawanshahar Central Cooperative Bank Ltd [2005 (8) TMI 28 - SUPREME COURT OF INDIA], as correct for cooperative societies /banks claiming deduction u/s. 80P(2)(a)(i) of the Act. In other words, the Board has taken a view that interest earnings of a cooperative society which was having as its primary business, providing credit facilities to its members who were agriculturists, could be considered under the head income from business and not from income from other sources. We are of the opinion that assessee has to succeed in this appeal. Interest earned by the assessee from its deposits placed in Sub-Treasury and banks are eligible for deduction u/s. 80P(2)(a)(i) of the Act. See Kizathadiyoor Service Cooperative Bank Ltd vs. ITO [2016 (7) TMI 1405 - ITAT COCHIN] - Decided in favour of assessee.
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