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2018 (7) TMI 211 - AT - Income TaxDenying the benefit of section 80P(2)(a)(i) for the interest earned on bank deposits - Held that:- By virtue of the local State laws meant for cooperative societies or other statutory requirements if certain deposits in scheduled banks are required to be maintained by the cooperative society mandatorily then in such a situation, interest income on such fixed deposits with banks i.e. other than cooperative banks are also eligible for deduction u/s 80P(2)(a)(i) - if any surplus fund or any amount put in the fixed deposit for any other liabilities created under the head funds which are not statutorily required to be maintained by the assessee society then the interest earned on such bank deposits made out of these funds is liable to be assessed as income from other sources u/s 56 of the Act. Direct the Assessing Officer to conduct necessary inquiry in this matter and also direct the assessee to produce the relevant documents, records, bylaws as well as rules and regulations of cooperative society to demonstrate that the fixed deposits which have been made are for the funds statutorily required to be maintained by the society and to this extent if the assessee is able to demonstrate this fact, the benefit of section 80P(2)(a)(i) may be given to it. The Assessing Officer is directed to examine the material produced by the assessee before him and make the assessment accordingly - appeal of the assessee is allowed for statistical purposes.
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