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2018 (12) TMI 977 - AT - Income TaxDeduction u/s. 80P(2)(a)(i) - interest income from banks other than cooperative banks - interest income from surplus funds/short term deposits with banks is “Income from other sources” taxable u/s.56 - Held that:- As the assessee in the instant case was commercially bound to maintain overdraft with State Bank of India and for that purpose it had to place FDRs, on which the interest income was earned, such an interest arising on these FDRs, in the given circumstances, is in the nature of income under the head “Profits and grains from business or profession” and cannot be characterized “Income from other sources” as held by the authorities below. Once the interest income is construed as “Business income”, the same becomes eligible for deduction u/s. 80P of the Act. Therefore, overturn the impugned order and direct to grant deduction u/s.80P on such interest income in all the three years under consideration. - Decided in favour of assessee.
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