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2015 (8) TMI 15 - HC - Income TaxExemption under Section 80P(2)(a)(i) - interest received from investments of its surplus funds made with the members of the Society - whether the interest income received by the appellant from investments/deposits of its surplus fund with the Member Company is exempt from tax on the Principle of Mutuality? - Held that:- As decided TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LIMITED case [2015 (2) TMI 995 - KARNATAKA HIGH COURT] in the amount which was invested in banks to earn interest was not an amount due to any members. It was not the liability. It was not shown as liability in their account. In fact this amount which is in the nature of profits and gains, was not immediately required by the assessee for lending money to the members, as there were no takers. Therefore they had deposited the money in a bank so as to earn interest. The said interest income is attributable to carrying on the business of banking and therefore it is liable to be deducted in terms of Section 80P(1) of the Act. - Decided in favour of assessee.
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