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Appeal granted for deduction on interest income from Fixed Deposits with Nationalized Banks The Tribunal allowed the appeal, reversing the decision of the CIT(A) and directing the deduction u/s.80P to be granted for interest income earned on ...
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Appeal granted for deduction on interest income from Fixed Deposits with Nationalized Banks
The Tribunal allowed the appeal, reversing the decision of the CIT(A) and directing the deduction u/s.80P to be granted for interest income earned on Fixed Deposits with Nationalized Banks. The Tribunal relied on a previous order by the Pune Bench and the decision of the Hon'ble Karnataka High Court, as there was no direct judgment from the jurisdictional High Court. The consistent view taken by the Pune Bench and similar orders supported the decision in favor of the assessee, leading to the allowance of the appeal on 22nd February 2019.
Issues: - Deduction u/s.80P of the Income-tax Act, 1961 for interest income earned from Fixed Deposits kept with Nationalized Banks.
Analysis: The appeal before the Appellate Tribunal ITAT Pune pertained to the denial of deduction u/s.80P of the Income-tax Act, 1961 in relation to interest income of Rs. 8,88,884 earned from Fixed Deposits with Nationalized Banks for the assessment year 2015-16. The ld. CIT(A) had disallowed the deduction on the grounds that interest from nationalized banks did not qualify for deduction under this section.
Upon hearing both sides and examining the relevant material, the Tribunal noted that a previous order by the Pune Bench in a similar case had allowed the deduction u/s.80P. The Tribunal also referenced a case where the Hon’ble Karnataka High Court allowed the deduction on interest income, contrasting with the decision of the Hon’ble Delhi High Court which did not allow such deduction. Given the absence of a direct judgment from the jurisdictional High Court on the matter, the Tribunal followed the view favoring the assessee taken by the Hon’ble Karnataka High Court.
Considering the consistent view taken by the Pune Bench of the Tribunal and other similar orders, the Tribunal reversed the decision of the CIT(A) and directed that the deduction u/s.80P be granted for the interest income earned on Fixed Deposits with Nationalized banks. Consequently, the appeal was allowed by the Tribunal, and the order was pronounced in open court on 22nd February 2019.
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