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2024 (2) TMI 1169 - AT - Income TaxDeduction u/s 80P(2) - interest accrued/earned on fixed/term deposits investment - reasoning given by the tax authorities in denying the claim for deduction u/s 80P(2)(d) is that interest was received from banks - HELD THAT:- Revenue reasoning has no legs to stand as a cooperative bank is principally a cooperative society and holds a banking license to operate on a larger scale under the guidelines of RBI. This issue was came to consider by Hon’ble Karnataka High Court in ‘CIT Vs Totagars Cooperative Sale Society’, finds reported [2017 (7) TMI 1049 - KARNATAKA HIGH COURT] wherein their lordships referring to the decision of Hon’ble Apex Court in the case of Totgars Co-operative Sales Society Ltd. [2010 (2) TMI 3 - SUPREME COURT] held that the ratio of decision of the Hon’ble Supreme Court in the aforesaid case (supra) not to be applied in respect of interest income on investment as same falls u/s 80P(2)(d) and not u/s 80P(2)(a)(i) of the Act Thus we hold that the interest income earned by the appellant society from its investment held with other cooperative banks since being a registered co-operative society under respective state laws, qualifies for deductions u/s 80P(2)(d) of the Act. Resultantly, we set-aside the impugned orders and reverse the denial of deduction. Appeal of assessee allowed.
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