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2022 (5) TMI 1063 - AT - Income TaxAddition on account of interest earned u/s 80P(2)(d) - AO denied the claim of deduction u/s 80P in totality and taxed the interest income as “income from other sources” u/s 56 - AO also denied deduction of proportionate expenses incurred for earning the aforesaid interest income - HELD THAT:- The issue for consideration before us is whether the assessee is eligible to claim deduction on interest earned from Co-Operative Banks u/s 80P(2)(d) of the Act. The Hon’ble Gujarat High Court in the case of State Bank of India[2016 (7) TMI 516 - GUJARAT HIGH COURT] held that that the interest income earned by a co-operative society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec.80P(2)(d) In the case of Surat Vankar Sahakari Sangh Ltd. v Assistant Commissioner of Income-tax [2016 (7) TMI 1217 - GUJARAT HIGH COURT] the Gujarat High Court held assessee-co-operative society was eligible for deduction under section 80P(2)(d) in respect of gross interest received from co-operative bank without adjusting interest paid to said bank. In the case of Surendranagar District Co-op. Milk Producers Union Ltd. [2019 (9) TMI 978 - ITAT RAJKOT] the ITAT held that assessee-co-operative society could not claim benefit of section 80P(2)(d) in respect of interest earned by it from deposits made with nationalised/private banks, however, said benefit was available in respect of interest earned on deposits made with co-operative bank. In the case of Pr. Commissioner of Income Tax and Anr. Vs. Totagars Cooperative Sale Society [2017 (1) TMI 1100 - KARNATAKA HIGH COURT] the Karnataka High Court has held that the interest income earned by a co-operative society on its investments held with a co-operative bank would be eligible for claim of deduction under Sec.80P(2)(d) of the Act. Thus interest earned by the assessee on surplus held with cooperative banks would be eligible for deduction under Sec.80P(2)(d) of the Act.- Decided against revenue.
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