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2019 (1) TMI 211 - AT - Income TaxBenefit of deduction u/s 80P(2)(a)(i) - interest income received on investment of their surplus funds - denial the claim of the Assessee on the ground that interest income earned by making investment of surplus funds has to be assessed under the head income from Other Sources and not income from business - Held that:- The claim of the Assessee was that Co-operative Bank is essentially a Co-operative Society and therefore deduction has to be allowed under Clause (d) of Sec.80P(2) of the Act. As decided in the case The Totgars Co-operative Sales Society Ltd. (2017 (7) TMI 1049 - KARNATAKA HIGH COURT) held that interest earned from Schedule bank or co-operative bank is assessable under the head income from other sources and therefore the provisions of Sec.80P(2)(d)of the Act was not applicable to such interest income. It is thus clear that the source of funds out of which investments were made remained the same in AY 2007-08 to 2011-12 and in AY 1991-92 to 1999-2000 decided by the Hon'ble Supreme Court. Therefore whether the source of funds were Assessee's own funds or out of liability was not subject matter of the decision of the Hon'ble Karnataka High Court in the decision cited by the learned DR. To this extent the decision of the Hon'ble Karnataka High Court in the case of Tumukur Merchants Souharda Co-operative Ltd. [2015 (2) TMI 995 - KARNATAKA HIGH COURT] still holds good. Hence, on this aspect, the issue should be restored back to the AO for a fresh decision after examing the facts in the light of these judgment of the Hon'ble Apex Court rendered in the case of The Totgars Cooperative Sale Society Ltd. (supra) and of Hon'ble Karnataka high Court rendered in the case of Tumukur Merchnts Souharda Cooperative Ltd.[2015 (2) TMI 995 - KARNATAKA HIGH COURT] - Assessee's appeal allowed for statistical purposes.
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