Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2015 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 941 - AT - Income TaxEntitlement to deduction u/s.80P(2)(a)(i) - AO was of the opinion that assessee, a Credit Cooperative Society under the Karnataka Cooperative Societies Act was hit by Section 80P(4) of the Act as in the business of giving credits and should be considered as a cooperative bank, hence disallowed the claim.- CIT(A) allowed the claim - whether assessee fell within the limitation specified in Section 80P(4)? - Held that:- It is an admitted position that assessee was bound to give interest to its members on the deposits received by it from them. Therefore, when there were no takers for the money, which assessee as a part of its objects wanted to lend, the only available choice for assessee, in order not to keep the funds idle, was to place it in banks for earning interest. As relying on case of CIT v. Tumkur Merchants Souharda Credit Cooperative Ltd [2015 (2) TMI 995 - KARNATAKA HIGH COURT ] it is held the money meant for lending, remaining surplus, there being no takers, if deposited in banks for earning interest, such interest income would be attributable to the business of banking carried out by the assessee. Natural corollary is that Section 80P(4) of the Act is not attracted unless the cooperative society is recognised by RBI as a cooperative bank as per the rules made under Reserve Bank of India Act. We, therefore, hold that assessee was eligible for claiming deduction u/s.80P(2)(a)(i) of the Act. We do not find it necessary to interfere with the order of the CIT (A). - Decided in favour of assessee.
|