TMI Blog2017 (4) TMI 1311X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome tax. If assessee has incurred any expenditure, which is attributable to the earning of interest income, then, the AO shall examine that aspect and exclude the interest expenditure if any incurred by the assessee for earning this interest from bank. The only net interest income is to be excluded from the claim of deduction under section 80P(2) of the Act. Appeal of the assessee is allowed for statistical purpose. - ITA No.2710/Ahd/2015 - - - Dated:- 10-4-2017 - SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER Assessee by : Shri Mehul Shah, AR Revenue by : Shri Madhusudan, Sr.DR O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: Assessee is in appeal before the Tribunal against order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of law. For the purpose of controversy in hand, the question no.2 is the relevant question. It reads as under: Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in holding that interest income of ₹ 16,14,579/- on deposits placed with State Bank of India was not exempt under section 80P(2)(a)(i) of the Income Tax Act, 1961? 5. Brief facts in this case are that the assessee society was registered under Gujarat Cooperative Societies Act, 1961. It was constituted with object of accepting deposits from salary persons of the State Bank of India, Gujarat region with a view to encourage thrift and providing credit facility to them. The assessee society has launched various deposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herein it was the case of the assessee that it was carrying on the business of providing credit facilities to its members and therefore, the appellantsociety being an assessee engaged in providing credit facilities to its members, the interest received on deposits in business and securities is attributable to the business of the assessee as its job is to provide credit facilities to its members and marketing the agricultural products of its members. This court is, therefore, of the view that the above decision is not restricted only to the investments made by the assessee therein from the retained amount which was payable to its members but also in respect of funds not immediately required for business purposes. The Supreme Court has held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n banks does not fall within any of the categories mentioned in section 80P(2)(a) of the Act. However, section 80P(2)(d) of the Act specifically exempts interest earned from funds invested in co-operative societies. Therefore, to the extent of the interest earned from investments made by it with any co-operative society, a co-operative society is entitled to deduction of the whole of such income under section 80P(2)(d) of the Act. However, interest earned from investments made in any bank, not being a co-operative society, is not deductible under section 80P(2)(d) of the Act. 6. The ld.counsel for the assessee could not dispute the fact that the issue in dispute is covered by the decision of the Hon ble Gujarat High Court. He alternativ ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
