Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2019 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (1) TMI 851 - ITAT AHMEDABADDisallowance of interest income earned on fixed deposits with nationalised banks and received from Income tax Department u/s 244A - Held that:- Hon’ble jurisdictional High Court in the case of CIT Vs. State Bank of India [2016 (7) TMI 516 - GUJARAT HIGH COURT] has held that interest earned from investment made in nationalized bank by a cooperative society engaged in providing credit facilities to its members, is not deductible under section 80P(2)(a)(i). In recent past the Tribunal in number of decisions has taken a consistent view on this issue by following above judgment of the Hon’ble jurisdictional High Court. In this view of the matter, we do not incline to disturb the orders of the Revenue on this issue, which we uphold. However, any expenditure incurred by the assessee for earning such income could be allowed to it. AO has to determine the net interest income earned by the assessee on such investment with bank, and only thereafter that income has to be excluded from the admissibility of deduction under section 80P(2) of the Act. Earning of interest income u/s 244A since this income is not attributable to the activities of the assessee-society, the same is not an eligible income for exemption. AO has rightly made this addition. As regards charging of interest under section 234A and 234B are concerned, they being mandatory provisions, levy of interest is consequential.
|