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2022 (10) TMI 1161 - AT - Income TaxDeduction u/s 80P - AO assessed the interest earned by the assessee from such investments in District Cooperative Bank and Treasury deposits under the head "Income from Other Sources" and resultantly disallowing the claim of deduction u/s 80P - HELD THAT:- As decided in M/S. THE KIZHATHADIYOOR SERVICE CO-OPERATIVE BANK LTD case [2016 (7) TMI 1405 - ITAT COCHIN] the assessee is a cooperative Bank. The investment in treasury/banks and earning interest on the same is part of the banking activity of the assessee’s cooperative bank. Therefore, the said income is eligible for deduction u/s 80P(2)(a)(i) of the Act. Therefore, the Income Tax Authorities were not justified in treating interest income received by the assessee as ‘income from other source’ and denying the benefit of section 80P(2). The lower authorities have no benefit of judgement of Hon’ble Apex Court in the case of The Mavilayi Service Co-operative Bank Ltd. & Ors.[2021 (1) TMI 488 - SUPREME COURT] we are of the view that in the interest of justice and equity the issue of deduction u/s 80P(2)(a)(i) of the Act needs to be examined de novo in the light of the judgement of the Hon’ble Apex Court, referred supra. Therefore, the issue raised on merits is restored to the files of the AO.Appeals filed by the assessee are partly allowed for statistical purposes.
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