Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2010 (1) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2010 (1) TMI 175 - HC - Income TaxDeduction- The assessee is a regional rural bank set up under the provisions of the Regional Rural Banks Act, 1976. This bank is declared to be a co-operative society for the purpose of the Income-tax Act, 1961. For the assessment year under consideration, the assessee filed the return of income on July 31, 2001, and claimed the deduction of its entire income amounting to Rs. 65,86 under section 80P(2) (a) (i) of the Act. The return was accepted under section 143(1) (a) of the Act. Subsequently, a notice under section 148 of the Act was issued and the case was reopened with the view to disallow the deduction in respect of the interest income accrued on the investment. According to the assessee, the claim did not qualify for the exemption under section 80P(2) (a) (i) of the Act. The plea of the assessee was not accepted and the assessing authority passed the assessment order and disallowed the claim for exemption. The Commissioner (Appeals) and Tribunal allow it. Held that- it was not the case of the Revenue that the assessee had carried on any other business other than banking business. The deposit exceeding the statutory liquidity ratio was also in relation to banking activity. Hence, the income accrued out of such deposit was also attributable to the banking business and was deductible under section 80P(2)(a)(i).
|