TMI Blog2018 (11) TMI 1420X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (2016 (7) TMI 516 - GUJARAT HIGH COURT) wherein it is held that interest income on deposit placed with the commercial banks is not exempt u/s. 80P(2)(a)(i). We are inclined with the decision of the ld. CIT(A) that investing surplus funds in a commercial bank is no part of the business of providing credit facilities to its members which is not deductible under section 80P(2)(a)(i) of the act - we direct the assessing officer to allow pro rata expenses in respect of interest earned from deposit held with nationalized bank to the assessee for computing the deduction u/s. 80P after examining/verification and affording adequate opportunity to the assessee - ITA No. 2958/Ahd/2016 - - - Dated:- 17-9-2018 - Shri Amarjit Singh, Accountant Me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestments in fixed deposits with Bank of Baroda to comply with the directions given by the Gujarat Government. Your appellant further submits that the State Government had started issuing such notification keeping in view the bad conditions of various co-operative banks and cooperative societies in the state. Your appellant further submits that interest earned on fixed deposits and saving account with Nationalized Bank is nothing but attributable to activity of accepting deposits from and lending the same to its members which the Id. CIT(A) failed to appreciate. 3. The brief fact of the act is that assesse has filed return of income declaring income at Rs. Nil. Subsequently, the case was selected under scrutiny by issuing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assesse has claimed deduction u/s. 80P(2)(a)(i) of the act on interest income earned from fixed deposit maintained with the commercial bank. As per section 80P(2)(a)(i) of the act the interest income earned on providing credit facility to its members is deductible u/s. 80P(2)(a)(i) of the act. After perusal of the aforesaid provision of the act we observe that deduction u/s 80P(2)(a)(i) is not available on the interest earned on deposit maintained with the commercial bank. We find that the Hon ble jurisdictional high court has decided the identical issue in favour of the Revenue vide State Bank of India vs. CIT (2016) 72 taxmann.com 64 (Gujarat) wherein it is held that interest income on deposit placed with the commercial banks is not exe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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