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2015 (9) TMI 546 - AT - Income TaxDenial of deduction u/s.80P(2)(d) - assessee is a cooperative society - interest received by it on deposits placed with cooperative banks - Held that:- Deposits placed with banks could be considered only as investments irrespective of the classification done by an assessee. All deposits will be investments, unless the context otherwise suggest, whereas all investments may not be deposits. Therefore assessee was eligible for claiming deduction u/s.80P(2)(d) of the Act. As to whether interest income earned on surplus kept as deposit, was eligible for deduction u/s.80P(2)(a)(i) of the Act, issue has been settled in favour of the assessee by the judgment of Hon’ble jurisdictional High Court in the case of Tumkur Merchants’Souharda Credit Cooperative Society v. ITO [2015 (2) TMI 995 - KARNATAKA HIGH COURT ] wherein held 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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