Interest Income from Fixed Deposit of Co-operative Society made during the course of Business eligible for Deduction u/s 80P(2)(a)(i) of Income Tax Act: ITAT
Interest Income from Fixed Deposit of Co-operative Society – Interest Income – Fixed Deposit – Income – Co-operative Society – Business – Deduction – Income Tax Act – ITAT – Taxscan
Interest Income from Fixed Deposit of Co-operative Society – Interest Income – Fixed Deposit – Income – Co-operative Society – Business – Deduction – Income Tax Act – ITAT – Taxscan
The Kolkata bench of Income Tax Appellate Tribunal (ITAT) has recently held that interest income from fixed deposits of co-operative society made during the course of business is eligible for deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961.
Somak Basu, counsel appeared for the assessee. Vijay Kumar, counsel appeared for the revenue.
Assessee-Rifle Factory Co-operative Society Limited is a Co-operative Society engaged in the business of providing credit facilities to its members. During the course of assessment proceedings, the AO noticed that the assessee had received an interest income of Rs.9,06,730/- from Fixed Deposit held with Cooperative Bank. Thereafter, the AO did not treat the interest income of Rs.9,06,730/- received from the Fixed Deposit as part of the business activity carried out by the assessee.
Aggrieved by the order assessee filed an appeal before CIT(A). The CIT(A) confirmed the order of AO. Further, the assessee filed another appeal before the tribunal.
Counsel for the assessee submitted that they were purely based on the Rules and Regulations provided under the West Bengal Cooperative Societies Act, 2006.
Further assessee submitted that business activities of providing credit facilities to its members were in adherence to the Rules and Regulations of the West Bengal Cooperative Societies Act, 2006. Also, the interest income from the fixed deposit had been made by the assessee in the course of business.
Counsel for the revenue supported the decision of the lower authorities.
The tribunal, after verifying the contentions of the above observed that assessee is a society as per the West Bengal Cooperative Societies Act, 2006. The interest income from the Fixed Deposits, which was made by the assessee in the course of business and eligible for deduction under Section 80P(2)(a)(i) of the Income Tax Act.
Therefore, the two-member bench of Dr Manish Borad, (Accountant Member) and Sonjoy Sarma, (Judicial Member) allowed the appeal filed by the assessee.
To Read the full text of the Order CLICK HERE
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