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2018 (7) TMI 2281 - AT - Income TaxDeduction u/s 80P(2)(a)(i) and 80P(2)(d) - whether interest income earned on fixed deposits with the nationalized bank and cooperative bank would qualify for deduction u/s 80P(2)(a)(i) and 80P(2)(d)? - HELD THAT:- The issue in dispute is squarely covered against the assessee by the decision of State Bank of India Vs. CIT [2016 (7) TMI 516 - GUJARAT HIGH COURT] wherein Hon'ble Court held that interest earned from the investment made in any bank is not deductible u/s 80P(2)(a)(i) - we dismiss the appeal of the assessee. We direct the AO to exclude the amount of net interest income from the deduction claimed u/s 80P(2)(a)(i) - AO will allow the expenses incurred by the assessee in the earning of such interest income not eligible for deduction u/s 80P(2)(a)(i). Similarly we also note that the income earned by the assessee on the investment made with the any other cooperative society will be eligible for the deduction u/s 80P(2)(d). We direct the AO to exclude the amount of net interest income from the deduction claimed u/s 80P(2)(a)(i) - Thus the AO will allow the expenses incurred by the assessee in the earning of such interest income not eligible for deduction under section 80P(2)(a)(i) - we also direct the AO to allow the deduction to the assessee for the amount of interest earned from the co-operative bank u/s 80P(2)(d). Hence, grounds of appeal filed by the assessee are allowed for statistical purposes.
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