TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal sets aside CIT(A)'s decision, orders fresh examination on taxability of interest income</h1> <h3>M/s. Sri Kanaka Pathina Sahakara Sangha Niyamitha Versus The Income Tax Officer Ward 3 Tumkur.</h3> M/s. Sri Kanaka Pathina Sahakara Sangha Niyamitha Versus The Income Tax Officer Ward 3 Tumkur. - TMI Issues:1. Disallowance of claim of deduction u/s 80P(2)(a)(i) of the I.T.Act.2. Taxability of interest earned from deposits with Co-operative Banks u/s 56 of the I.T.Act.Analysis:1. Issue 1 - Disallowance of deduction u/s 80P(2)(a)(i):The assessee, a Co-operative Society, filed a return for AY 2016-2017 claiming deduction u/s 80P of the I.T.Act. The Assessing Officer disallowed the deduction stating that the principles of mutuality did not exist between regular, associate, and nominal members, relying on legal precedents. The CIT(A) upheld this decision. However, the Tribunal referred to the judgment of The Mavilayi Service Co-operative Bank Ltd. & Ors. v. CIT, where it was held that providing credit facilities to associate or nominal members would be entitled to deduction u/s 80P(2)(a)(i) unless they are not considered as members under the respective State Act. The Tribunal set aside the CIT(A) order, instructing the A.O. to reexamine the case in line with the principles laid down by the Apex Court.2. Issue 2 - Taxability of interest from Co-operative Banks:Regarding interest income earned from deposits with Co-operative Banks, the Tribunal considered conflicting judgments. The AR cited a Karnataka High Court decision allowing deduction under section 80P(2)(a)(i) for interest income from temporary parking of surplus funds. The DR referenced another High Court decision, leading to a contradictory interpretation. The Tribunal, in line with a previous case, directed the A.O. to reconsider the issue, allowing the Assessee to provide additional evidence regarding membership. The Tribunal ordered a fresh examination based on the judgments of the Apex Court and the Karnataka High Court, emphasizing the source of funds for investments.In conclusion, the Tribunal allowed the appeal for statistical purposes, setting aside the CIT(A)'s decision on both issues and instructing a fresh examination by the Assessing Officer in light of the relevant legal precedents.
TaxTMI 