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2019 (1) TMI 1564 - ITAT BANGALOREDeduction u/s 80P(2)(a)(i) - interest income earned on deposits with banks - deduction calmed was not allowed by the Revenue authorities for the reason that the income which was claimed as deduction was interest income which was earned by the assessee on deposits and interest income had to be regarded as ‘income from other sources’. - HELD THAT:- Claim for deduction under section 80P(2)(a) in respect of interest income earned from out of bank deposits is restored to the file of the AO for denovo adjudication after examining the facts in the light of the judgments of the Hon’ble Apex Court in the case of The Totagars Cooperative Sale Society Ltd., [2010 (2) TMI 3 - SUPREME COURT] and in the case of Tumkur Merchants Souharda Co-operative Ltd., [2015 (2) TMI 995 - KARNATAKA HIGH COURT] wherein held that interest earned from Schedule bank or cooperative bank is assessable under the head income from other sources and therefore the provisions of Sec.80P(2)(d) of the Act was not applicable to such interest income. It is thus clear that the source of funds out of which investments were made remained the same in AY 2007-08 to 2011- 12 and in AY 1991-92 to 1999-2000 decided by the Hon’ble Supreme Court. Therefore, whether the source of funds were Assessee’s own funds or out of liability was not subject matter of the decision of the Hon’ble Karnataka High Court in the decision cited by the learned DR. To this extent, the decision of the Hon’ble Karnataka High Court in the case of Tumkur Merchants Souharda Co-operative Ltd. (supra) still holds good. Hence, on this aspect, the issue should be restored back to the AO for a fresh decision after examining the facts in the light of these judgments quoted above - Decided in favour of assessee for statistical purposes.
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