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2009 (4) TMI 368 - MADRAS HIGH COURTDeduction- The return filed by the assessee-co-operative bank for the assessment year 1998-99 was processed under section 143(1) (a) on February 10, 1999. Subsequently, the Assessing Officer noticed that interest granted under section 244A amounts to Rs. 47,151 for the assessment year 1996-97 during the previous year relevant to the assessment year 1998-99 was omitted to be taxed. Since there was a mistake apparent from records, notice under section 154 was issued to the assessee. In reply, the assessee contended that since the assessee is a co operative society, engaged in the business of banking, the entire interest income was exempt under section 80P(2)(a)(i) of the Income-tax Act. The Assessing Officer rejected the claim since interest under section 244A was not derived from the business of banking. Aggrieved by that order, the assessee preferred an appeal before the first appellate authority, who citing the decision CIT v. Ramanathapuram District Co-operative Central Bank Ltd. [2002] 255 1W 423 (SC) deleted the addition of Rs. 47,151. Held that- dismissing the appeal, that the tax effect involved was less than the amount prescribed under the CBDT Circular F.No. 279/126/98-ITJ, dated March 27, 2000. The revenue was bound by the Circular.
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