TMI Blog2018 (5) TMI 1729X X X X Extracts X X X X X X X X Extracts X X X X ..... it in connection with such interest income. Therefore, we direct the AO to take the net interest income for the purpose of disallowance of deduction u/s 80P(2)(a)(i) of the Act. Disallowance of interest on deposits made with other cooperative banks - Held that:- Assessee is eligible for such deduction u/s 80P(2)(d) - Decided in favor of assessee. Disallowance of income from other sources - Held that:- Assessee is not entitled for deduction in respect of such income in view of Judgment of MAFATLAL INDUSTRIES LTD'S EMPLOYEES CO-OPERATIVE CREDIT SOCIETY LTD VERSUS THE INCOME TAX OFFICER [2014 (2) TMI 516 - ITAT AHMEDABAD] - Decided against the assessee - I.T.A. Nos.09 And 10/Ahd/2017 - - - Dated:- 29-5-2018 - SHRI RAJPAL YADAV, JUD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest income earned by your appellant on its bank deposits and other income amounting to ₹ 40,17,802/- as income from other sources and disallowance of deduction claimed u/s 80P thereon. 4. L'nd A.O. erred in law and on facts in holding entire interest income earned on our hank deposits amounting to ₹ 40,17,802/- as income from other sources. And not allowing proportionate expenses incurred by the society to earn such income. 5. L'nd A.O. erred in law and on facts in not adjusting income chargeable under the head of business and profession after holding interest income earned on our hank deposits amounting to ₹ 40,17,802/- as income from other sources. 6. L nd AO erred in law and on facts in not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 802 3. Interest income on the deposits with Cooperative Banks 285 4. Other income 34,147 The assessee in its income tax return has claimed the deduction u/s 80P(2)(a)(i) of the Act, in respect of all the aforesaid income amounting to ₹ 10,48,259/- only. However, the AO was of the view that the deduction u/s 80P(2)(a)(i) of the Act is limited only, in respect of interest income earned by the assessee from the advances given to the members. Therefore, the AO treated the interest income earned from short term deposits with banks, Cooperative Banks and other income for ₹ 40,17,802/-, 285/-, 34,147/- respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce given to them for ₹ 27,00,654/- is allowable for deduction u/s 80P(2)(a)(i) of the Act. The facts of the case are not in dispute, therefore we are not inclined to repeat the same for the sake of brevity. 9. The interest income earned by the assessee from the short term deposits made with the State Bank of India is not eligible for deduction u/s 80P(2)(a)(i) of the Act, in view of the judgment of the Gujarat High Court in the case of State Bank of India vs. CIT reported in 389 ITR 578. Therefore, we hold that the assessee cannot claim the deduction u/s 80P(2)(a)(i) of the Act in respect of interest income earned from short term deposits made with the bank. However, the assessee is entitled to claim the deduction of the expenditur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hence, ground of appeal of the assessee is allowed for statistical purposes. 14. Now coming to ITA No.10/Ahd/2017 for Asst. Year 2013-14. The assessee has raised following grounds of appeal: 1. L'nd A.O. erred in law and on facts in disallowing deduction claimed u/s. 80P(2)(a)(i). 2. L'nd A.O. erred in law and on facts in holding interest income earned by your appellant on its Bank deposits and other income amounting to ₹ 8,97,438/- as income from other sources and disallowance of deduction claimed u/s.80P thereon. 3. L'nd A.O. erred in law and on facts in holding entire interest income earned on our bank deposits amounting to ₹ 8,97,438/- as income from other sources. And not allowing proporti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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