2021 (2) TMI 101 - ITAT BANGALORE - Income Tax

Head Note / Extract:
Deduction u/s 80P - AO was of the opinion that interest earned from Pragati Gramina bank is not an income which is chargeable under the head profit and gains of business or profession but the same was to be offered under the head income from other sources - Primary plea raised before this Tribunal is that interest earned from Pragati Gramina bank cannot be treated as income from other sources - HELD THAT:- Amount invested with Pragati Gramina bank was neither due to any members nor a liability. The said money was temporarily parked with Pragati gramina bank, in order to maintain the overdraft limit available to assessee with state bank of Mysore. Respectfully following the decision in case of Tumkur Merchants Souharda Credit Co-operative Society Ltd vs ITO [2015 (2) TMI 995 - KARNATAKA HIGH COURT], we are of the opinion that interest earned on such deposit would partake the character of business income attributable to carrying on business of banking and is eligible for deduction under section 80P - Decided in favour of assessee.