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2019 (6) TMI 1212 - AT - Income TaxDeduction u/s 80P(2)(a)(i) - business income including the interest income earned on the deposits with the other banks and the Treasury" - “income from business” V/S “income from other sources” - HELD THAT:- Interest income earned by the assessee from other Banks and Treasury on which deduction u/s. 80P(2)(i)(a) is to be granted, there is no dispute that the assessee has made investments in the course of banking activities and such interest income was received on investments made with cooperative banks and other scheduled banks. The coordinate bench of the Tribunal in the case of Kizhathadiyoor Co-operative Bank Limited c [2016 (7) TMI 1405 - ITAT COCHIN] had held that such interest income received by the assessee should be assessed as “income from business” instead of “income from other sources”. In view of the order of the co-ordinate bench, we hold that the CIT(A) is justified in holding that interest income received by the assessee should be assessed as “income from business”. Grant of deduction u/s. 80P(2)(i)(a) of the Act, the Assessing Officer shall follow the law laid down by the Larger Bench of the Jurisdictional High Court in the case of Mavilayi Service Co-operative Bank Ltd. vs. CIT [2019 (3) TMI 1580 - KERALA HIGH COURT] and examine the actual activities of the assessee so as to grant deduction u/s. 80P(2)(i)(a). Accordingly, we remit this issue to the file of the Assessing Officer for fresh consideration in accordance with the above direction. Thus, this ground of appeal of the Revenue is partly allowed for statistical purposes for both the assessment years. - Appeal filed by the Revenue is partly allowed for statistical purposes.
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