Co-operative Society Wins Appeal, Entitled to Deduction on Interest Income from Fixed Deposits under Income Tax Act.

The Appellate Tribunal ITAT Ahmedabad allowed the appeal of the Assessee, a co-operative society, granting the deduction under section 80P(2)(d) of the Income Tax Act for the interest earned on fixed deposits from S.K. District Co-op. Bank Ltd. The Tribunal concluded that the interest income is incidental to the Assessee's business, overturning the disallowance upheld by the CIT(A), NFAC, Delhi.

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Issues involved:
The appeal filed by the Assessee against the order passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2018-19.

Issue 1: Disallowance u/s 80P(2)(d) of the Act
The Assessee, a registered co-operative society providing credit facility to members, filed its return of income for A.Y. 2018-19. The Assessing Officer disallowed the claim u/s. 80P(2)(d) of the Act regarding interest received from S. K. District Co-op. Bank Ltd. The CIT(A) upheld the disallowance, leading to the Assessee's appeal. The Assessee argued that the interest income is incidental to its business and should be allowed u/s. 80P(2)(a)(i) of the Act. The Ld. AR referred to a judgment of the Hon'ble Gujarat High Court to support the claim. On considering the relevant material, the Tribunal found that the Assessee is entitled to the deduction u/s 80P(2)(d) for the interest earned on FD from S.K. District Co-op. Bank Ltd. Hence, the appeal of the Assessee was allowed.

Decision:
The appeal of the Assessee was allowed by the Appellate Tribunal ITAT Ahmedabad, granting the deduction u/s 80P(2)(d) for the interest earned on FD from S.K. District Co-op. Bank Ltd.

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