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2017 (1) TMI 385 - AT - Income TaxDisallowance of deduction u/s. 80P(2)(c) - interest income from deposits with the nationalized banks - assessee is a housing Co-operative society - Held that:- In the present case we observe that the assessee is claiming deduction on interest income earned on funds deposited with nationalized banks. The interest income on deposits with nationalized banks neither falls in clause (d) nor it partakes the character of profits and gains ‘attributable’ to the activities of the assessee to fall within the ambit of clause (c) of section 80P(2). The assessee is a Co-operative housing society, therefore, interest income on bank deposits cannot be considered as income ‘attributable’ to the activities of the assessee. To be eligible to claim deduction u/s. 80P(2)(c) the assessee has to show direct or proximate connection of the earnings/income with the activities of the society. It is not the case of assessee where the deposits with the nationalized Bank were made to comply with statutory condition. Had it been so, the assessee would have got the benefit of section 80P(2)(c) in the light of decision in the case of CIT Vs. Co-operative Cane Development Union Ltd.(1979 (2) TMI 91 - ALLAHABAD High Court ). In the present case we observe that there is not even a remote link between the interest income earned on deposits with nationalized banks and the activities of the assessee. Thus, in the facts and circumstances of the case we do not find any infirmity in the impugned order and the same is confirmed. - Decided against assessee
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