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2019 (7) TMI 1219 - AT - Income TaxDeduction u/s 80P(2) - benefit of deduction u/s 80P(2)(a)(i) on interest income earned and u/s 80P(2)(d) in respect of interest received from Co-operative institutions - AO assessed under the head “Income from Other Sources” and not income from business - HELD THAT:- Hon’ble Supreme Court in [2010 (2) TMI 3 - SUPREME COURT] has held that the benefit of deduction u/s 80P(2)(a)(i) is only on income which is assessable under the head “Income from Business”. Interest earned on investment of surplus funds not immediately required in short term deposits and securities by a Co-operative Society providing credit facilities to members or marketing agricultural produce to members is not business income but income from other sources and the society is not entitled to special deduction. 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 examining the facts in the light of these judgment of the Hon'ble Apex Court rendered in the case of The Totgars Co-operative Sale Society Ltd.(supra) and of Hon'ble Karnataka high Court rendered in the case of Tumukur Merchants Souharda Co-operative Ltd.(supra) - appeal allowed for statistical purposes
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