Kolkata bench of Income Tax Appellate Tribunal (ITAT) has recently held that interest income earned from nationalized banks shall be treated as business income for which deduction under Section 80P of the Income Tax Act can be claimed.
Assessee, in the present case was a primary employee co-operative credit society registered in the year 1911. The assessee duly filed its return of income declared a total income of Rs. 3,79,82,041 after taking into deduction under section 80P it was further declared the total income as nil.
During the course of assessment proceedings the Assessing Officer (AO) has found that the income earned on investment was treated by the assessee under the head business income. The AO issued notice and the assessee was asked for explanation that why it treated the income from investment as business income instead of income from other sources and why didn’t add the same with its total income.
After hearing both the sides, the Kolkata bench of ITAT comprising of Judicial Member Aby. T. Varkey and Accountant Member observed that according to section 80P of the Act where, in the case of an assessee being a co‑ operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted. In light of the relevant material facts and records it was observed that the assessee is a co-operative society.
The bench held that the assessee has rightly treated the income under the head business income and it is eligible for deduction under the aforesaid section. And accordingly appeal filed by the revenue has dismissed.
Subscribe Taxscan Premium to view the Judgment
