SIRWAR PATTINA SAHAKARA SANGHA NIYAMITA Vs. INCOME TAX OFFICER

Parties Involved

Facts Summary

The assessee, SIRWAR PATTINA SAHAKARA SANGHA NIYAMITA, a co-operative credit society registered under the Karnataka Co-Operative Societies Act, 1959, filed an appeal against the order passed by the Commissioner of Income Tax (Appeals) for the assessment year 2020-21. The assessee claimed a deduction under section 80P(2)(a)(i) of the Income Tax Act, 1961, for interest earned from deposits with Co-operative Banks and Scheduled Banks. The Assessing Officer and the Commissioner of Income Tax (Appeals) denied the deduction, treating the interest income as income from other sources. The assessee argued that the interest income was attributable to the business of providing credit facilities to its members and thus eligible for deduction under section 80P(2)(a)(i) of the Act.…

Legal Issues

• 1. Whether the interest income earned by the assessee from deposits with Co-operative Banks and Scheduled Banks is attributable to the business of providing credit facilities to its members and eligible for deduction under section 80P(2)(a)(i) of the Act?

Judgment Outcome

Decided in favour of Assessee.

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