Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (11) TMI 1420 - AT - Income TaxEligible for deduction u/s 80P - interest earned on deposits with Bank of Baroda and from saving bank account is not business income and hence not eligible for deduction - Held that:- As per section 80P(2)(a)(i) of the act the interest income earned on providing credit facility to its members is deductible u/s. 80P(2)(a)(i). After perusal of the aforesaid provision of the act we observe that deduction u/s 80P(2)(a)(i) is not available on the interest earned on deposit maintained with the commercial bank. We find that has decided the identical issue in favour of the Revenue vide State Bank of India vs. CIT (2016 (7) TMI 516 - GUJARAT HIGH COURT) wherein it is held that interest income on deposit placed with the commercial banks is not exempt u/s. 80P(2)(a)(i). We are inclined with the decision of the ld. CIT(A) that investing surplus funds in a commercial bank is no part of the business of providing credit facilities to its members which is not deductible under section 80P(2)(a)(i) of the act - we direct the assessing officer to allow pro rata expenses in respect of interest earned from deposit held with nationalized bank to the assessee for computing the deduction u/s. 80P after examining/verification and affording adequate opportunity to the assessee
|