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2014 (10) TMI 1007 - AT - Income TaxRevision u/s 263 - deduction u/s. 80P(2)(a)(i) - HELD THAT:- In a recent judgment in CIT v. Sri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha Bagalkot [2015 (1) TMI 821 - KARNATAKA HIGH COURT] took the view that when the status of the assessee is a co-operative society and not a co-operative bank, the order passed by the AO extending the benefit of exemption from payment of tax 80P(2)(a)(i) of the Act is correct and such an order is not erroneous and therefore, jurisdiction u/s. 263 of the Act cannot be invoked. We set aside the order of the ld. CIT and uphold the order of the AO allowing deduction u/s. 80P(2)(a)(i) of the Act to the assessee. Interest earned on deposits with Davangere Urban Co-op. Bank - HELD THAT:- In the present case, the interest in question is from the deposits maintained with Davangere Urban Co-op. Bank, which is a co-operative Bank and the making of such deposit has no nexus with the business of the assessee. The interest earned on such deposit can therefore be not considered as income derived from the business of providing credit facilities U/s.80P(2)(a)(i) of the Act or interest derived by a co-op. society from its investments with any other co-op. society, as contemplated by the provisions of s. 80P(2)(a)(d) of the Act. Therefore, following the decision of the Tribunal in the case of Sri Basaveshwara Credit Co-operative Society Ltd., Hirekerur [2013 (5) TMI 1010 - ITAT BANGALORE] we hold that the order of the ld. CIT u/s. 263 of the Act on this issue calls for no interference.
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