Deduction u/s 80P of Income Tax Act shall not be allowed on Interest Income earned from Nationalized Banks: ITAT upholds CIT(A) Order [Read Order]

The Income Tax Appellate Tribunal (ITAT) Ahmedabad Bench while upholding the order of Commissioner of Income Tax (Appeal) held that deduction under Section 80P of Income Tax Act, 1961 should not be allowed on interest earned from nationalized banks.

The assessee Gujarat State Co-op Agriculture and Rural Development Bank Ltd is a cooperative society engaged in providing credit facilities to its members for agriculture and allied activities and rural development.

During the assessment proceedings the Assessing Officer (AO) denied the claim of deduction under section 80P(2)(d) of the Income Tax Act on interest income earned from nationalised banks.

Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)] .

The CIT(A), during the proceedings observed that as per the provisions of section 80P(2)(d), the assessee was eligible for deduction of any income by way of interest or dividend derived from its investment from any other cooperative societies only.

However in the present case CIT(A) noted that the  interest income had been earned from Nationalised banks and not from other cooperative societies, and therefore, held that the assessee was not eligible for deduction under section 80P(2)(d) of the Income Tax Act.

The tribunal after reviewing the facts and submissions of the both parties and relied upon the decision of Totgars Cooperative Sales Society Ltd. Vs. ITO and State Bank of India (SBI) Vs. CIT the Two member bench of Annapurna Gupta (Accountant Member) and Madhumita Roy (Judicial Member ) dismissed the appeal filed by the assessee.

Vijay Kumar Jaiswal, counsel appeared for the revenue. No one appeared for the assessee during the proceedings .

To Read the full text of the Order CLICK HERE

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