TMI Blog2022 (11) TMI 823X X X X Extracts X X X X X X X X Extracts X X X X ..... draw support and guidance from the judgment of the Hon ble Gujarat High Court in the case of State Bank of India [ 2016 (7) TMI 516 - GUJARAT HIGH COURT ] It is only the interest derived from the credit facilities provided to its members which is deductible under section 80P(2)(a)(i) of the Act and the interest derived by depositing surplus funds with the nationalized/commercial bank i.e. Bank of Baroda is not being attributable to the business as envisaged under the provisions of the Act. Thus the same cannot be deducted under section 80P(2)(a)(i) - there remains no ambiguity that income received by the assessee on the money deposited with the Bank of Baroda is not eligible for deduction under section 80P(2)(a)(i) Whether gross amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e deduction claimed under section 80P(2)(a)(i) of the Act. 3. The facts in brief are that the assessee in the present case is a co-operative society and engaged in the activity of providing credit facilities to the members. In the year under consideration, there was the surplus fund available with the assessee which was deposited with the banks in order to generate the interest income as well as to maintain the liquidity for the repayment of the deposits accepted from the members. The assessee on such deposit has earned an interest income of ₹ 4,52,905/- only. As per the AO, the impugned amount of interest was not arising to the assessee from the activities of financing to the members. Thus, the AO disallowed the same and added to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the Hon ble Gujarat High Court in the case of State Bank of India versus CIT reported in 72 Taxmann.com 64 wherein it was held as under: The Income Tax Appellate Tribunal was also justified in holding that interest income of Rs.16,14,579/- and Rs.32,83,410/-respectively on deposits placed with State Bank of India was not exempt under section 80P(2)(a)(i) of the Income Tax Act, 1961. 8.1 In view of the above, it is only the interest derived from the credit facilities provided to its members which is deductible under section 80P(2)(a)(i) of the Act and the interest derived by depositing surplus funds with the nationalized/commercial bank i.e. Bank of Baroda is not being attributable to the business as envisaged under the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
