Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2023 (11) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (11) TMI 1207 - AT - Income TaxDeduction u/s 80P - interest earned on deposits pertaining to reserve fund with DCC Bank, which is a cooperative bank - HELD THAT:- It is an admitted fact that the assessee has claimed deduction u/s 80P. The contention of the AO is that interest accrued on Reserve Fund Deposits is not eligible for deduction u/s 80P. He relied on the decision of CIT Vs. Jilla Jahakan Kendriya Bank Maryadit [1996 (8) TMI 72 - MADHYA PRADESH HIGH COURT] that income from interest on securities ear marked to reserve fund has been held not eligible for deduction u/s 80P. He has also placed relied on the decision of in the case of M/s Totgars Cooperative Sale Society Ltd. [2010 (2) TMI 3 - SUPREME COURT] which held that “investment of surplus on hand not immediately required in Short Term deposits and securities by a co-operative society providing credit facilities to members or marketing agriculture produce to member”. However, in the instant case, the facts are distinguishable and hence, in my view, the ratio laid down in the case of M/s Totgars Cooperative Sale Society Ltd. [2010 (2) TMI 3 - SUPREME COURT] shall not be applied. On similar set of facts, coordinate bench of this Tribunal in the case of Kakateeya Mutually Aided Thrift and Credit Co-op Society held in favour of the assessee [2023 (9) TMI 211 - ITAT VISAKHAPATNAM] assessee has invested surplus funds out of the activities carried out as per the provisions of section 80P(2)(a) of the Act. We therefore by respectfully following the jurisdictional High Court are of the view that interest income should be allowed as deduction u/s. 80P(2)(a)(i) of the Act and thereby the Ld. CIT(A) - NFAC has rightly held by deleting the addition made by the Ld. AO and hence we find no infirmity in the order of the Ld. CIT(A) -NFAC. Respectfully following the decision of Vavveru Cooperative Rural Bank Ltd. [2017 (4) TMI 663 - ANDHRA PRADESH HIGH COURT] and in the case of Kakateeya Mutually Aided Thrift and Credit Co-op Society Limited [2023 (9) TMI 211 - ITAT VISAKHAPATNAM] we are inclined to quash the order passed by the Ld.CIT(A) and allow the appeal of the assessee.
|