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2018 (4) TMI 446 - AT - Income TaxEligibility for exemption u/s. 80P(2)(a)(i) - gross interest income received by the assessee on fixed deposits kept with the cooperative banks - Held that:- As decided in Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO [2015 (2) TMI 995 - KARNATAKA HIGH COURT] the amount which was invested in banks to earn interest was not an amount due to any members. It was not the liability. It was not shown as liability in their account. In fact this amount which is in the nature of profits and gains, was not immediately required by the assessee for lending money to the members, as there were no takers. Therefore they had deposited the money in a bank so as to earn interest. The said interest income is attributable to carrying on the business of banking and therefore it is liable to be deducted in terms of Section 80P(1) of the Act. The order passed by the appellate authorities denying the benefit of deduction of the aforesaid amount is unsustainable in law. Accordingly it is hereby set aside. - Decided in favour of assessee.
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