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2015 (3) TMI 10 - AT - Income TaxEntitlement for deduction under section 80P(2)(a)(i) - AO denying the assessee's claim on the ground that since the assessee is a co-operative bank, the provisions of section 80P(4) are attracted and not 80P(2)(a)(i) - CIT(A) allowed assessee claim - Held that:- As relying on case of Sri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha [2015 (1) TMI 821 - KARNATAKA HIGH COURT] wherein held when the status of the assessee is a co-operative society and is not a co-operative bank, the order passed by the assessing authority extending the benefit of exemption from payment of tax under section 80P(2)(a)(i) of the Act is correct. - Decided in favour of assessee. Deduction under Section 80P(2)(a)(i) - interest received by the appellant on government securities - Held that:- . Applying the ratio of the judgement of the Hon'ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Co-operative Ltd. (2015 (2) TMI 995 - KARNATAKA HIGH COURT), we hold that the assessee is entitled to deduction under section 80P(2)(a)(i) of the Act in respect of the interest income earned on fixed deposit and government securities as well, as it forms part of the business income earned by the assessee and the same is not to be taxed under the head “ Other Sources.” In this view of the matter, the deduction claimed by the assessee under section 80P(2)(a)(i) of the Act in respect of interest of ₹ 3,90,246 earned from investments in fixed deposits and government securities out of surplus funds from business is allowed. - Decided in favour of assessee.
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