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2021 (11) TMI 52 - ITAT KOLKATADeduction u/s 80P(2) on interest income - assessee is a primary agricultural credit society registered under the West Bengal Cooperative Societies Act and carrying on business of banking and providing credit facilities to its members and also taking deposits from its farmer members - HELD THAT:- As in case of a cooperative society engaged in carrying on business of banking or providing credit facilities to its members, the whole of the amount of profits of business attributable to any or more of such activities as mentioned in section 80P(2), are exempt from taxation. Admittedly, as mentioned by the AO in the assessment order itself, the assessee-society was carrying on business of banking and providing credit facilities to its members and also taking deposits from its farmer members. Therefore, accepting deposits on interest is one of the activities of the assessee-society. In the business of banking or credit facilities, not only accepting deposits but also investment of the deposits is also the part of the business activity of such an entity. To invest the deposits accepted from the members or the surplus funds available with it, is part of the banking/credit business of the assessee-society. Therefore, the investment of the surplus amount in the banks by the assessee-society cannot be said to be not related to the business activity of the assessee-society. Therefore, the interest/dividend income earned by the assessee for such investment, will be eligible for deduction u/s 80P(2).
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