Nedumon Service Co-op. Bank Ltd. vs. The Income Tax Officer

Parties Involved

Facts Summary

The assessee, Nedumon Service Co-op. Bank Ltd., filed an appeal against the disallowance of a deduction claim under section 80P(2)(a)(i) of the Income Tax Act, 1961, for interest income from deposits made in co-operative Banks. The assessee argued that the interest income was eligible for tax deduction. The Senior D.R. for the respondent argued that the disallowance was rightly made. The Tribunal considered the issue and adopted the reasoning from a recent High Court decision, which held that the interest income from District Co-operative Bank/State Co-operative Bank does not come within the ambit of Section 80P(2)(a)(i) and is inadmissible for deduction.…

Legal Issues

• 1. Whether the interest income from deposits made in co-operative Banks is eligible for tax deduction under section 80P(2)(a)(i)?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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