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2018 (9) TMI 1550 - AT - Income TaxBenefit of deduction u/s 80P(2)(a)(i) in respect of interest income received on investments made with sub-treasuries and Bank - whether interest income received by the assessee on investments with sub-treasuries and banks was liable to be assessed under the head “income from other sources” or “income from business”? - Held that:- We noticed that an identical issue was considered by the Cochin Bench of the Tribunal in the case of The Azhikode Service Co-operative Bank Ltd. & Others [2017 (7) TMI 1138 - ITAT COCHIN] wherein in view of judgment of the Hon’ble Karnataka High Court in the case of TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LIMITED VERSUS THE INCOME TAX OFFICER, WARD-1, TUMKUR [2015 (2) TMI 995 - KARNATAKA HIGH COURT] it is held that the amount which was invested in banks to earn interest was not an amount due to any members - thus interest on deposits with sub treasury is entitled to the benefit of deduction u/s 80P(2). In the instant case the assessees had made investments with sub-treasuries and banks in the course of its business of banking / providing credit facilities to its members. Therefore, it was entitled to deduction u/s 80P(2)(a)(i) of the I.T.Act in respect of interest income that was received on such investments - Decided in favour of assessee.
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