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2020 (12) TMI 341 - AT - Income TaxDeduction claimed u/s. 80P - assessee has not filed its return of income u/s.139(1) of u/s.139(4) of the Act or in response to notice u/s.148 within the prescribed time allowed hence in view of Specific provisions of Section 80A(5) deduction claimed u/s.80P(2)(a)(i) cannot be allowed - HELD THAT:- What is required to be seen is whether the assessee has made a claim in the return of income filed for the relevant year or not, even though such return is not filed within due date. In this case, the assessee although not filed its return of income for the impugned assessment year u/s.139 of the Act but such return of income has been filed in response to the notice issued u/s.148 of the Act and in the said return of income the assessee has made a claim for deduction u/s.80P(2)(a)(i) - no merit in the arguments taken by the ld.DR that the assessee is not entitled for deduction u/s.80P unless such deduction is claimed by filing return of income within the prescribed time allowed u/s.139(1) or 139(4) of the Act. This view is fortified by the decision of the Hon’ble Kerala High Court in the case of Chirakkal Service Co-operative Bank Ltd. [2016 (4) TMI 826 - KERALA HIGH COURT]. Interest income earned from fixed deposits and claimed deduction u/s.80P(2)(d) - AO has denied deduction on interest income earned from a co-operative bank on the ground that as per the said provisions, interest earned from any other co-operative society is only eligible for deduction u/s.80P(2)(a)(i) - HELD THAT:- In this case, the assessee is primarily engaged in the business of providing credit facilities to its members and in the course of its business it has parked funds collected from its members in other co-operative banks / nationalized banks as per the statutory requirements of the cooperative societies Act. The assessee has treated interest earned from other co-operative banks as part of its business activity. Once the assessee has earned interest income as part of its business activity and such interest income is earned out of the funds belonging to its members, then the assessee is entitled for deduction u/s.80P(2)(d) in respect of such interest income. identical issue was considered by the Hon’ble Madras High Court in the case of CIT vs. Veerakeralam Primary Agricultural Co-operative Credit Society [2016 (7) TMI 922 - MADRAS HIGH COURT] wherein held that the benefit of deduction u/s.80P of the Act is excluded for cooperative banks but credit co-operative societies are entitled to claim deduction u/s.80P of the Act in respect of interest income earned from deposits kept in other co-operative banks. CIT(A) was right in allowing the benefit of deduction claimed u/s.80P of the Act in respect of income derived from the activity including interest income earned from fixed deposits. - Decided against revenue.
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