Balussery Regional Co-op. Bank Ltd. vs. Income Tax Officer

Parties Involved

Facts Summary

Balussery Regional Co-op. Bank Ltd. is a primary co-operative society registered under Kerala State cooperative Department. The assessee declared income of Rs. 5,96,200/- after claiming deduction under chapter-VI of the Act for Rs. 29,79,121/- which includes deduction u/s 80P(2)(a)(i) of the Act for Rs. 28,52,121/-. The AO disallowed the deduction claimed under section 80P(2(a)(i) of the Act for Rs. 28,52,121/- as the income earned on deposit with cooperative bank is not allowable deduction under section 80P of the Act. The assessee appealed against the order of the ld. CIT-A and argued that the interest earned on deposit is allowable u/s 8P(2)(d) of the Act. The Tribunal set aside the order of the learned CIT(A) and directed the AO to tax the impugned income at normal rate of tax.…

Legal Issues

• 1. Whether the interest income on the surplus amount was required for business purposes?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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