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ITAT remanded the issue of deduction u/s 80P(2)(a)(i) on...
Deduction u/s 80P(2)(a)(i) and 80P(2)(d) on bank interest remanded for AO's verification, including classification of compulsory investments and related expenses
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ITAT remanded the issue of deduction u/s 80P(2)(a)(i) on interest income from bank investments to the AO for verification. The AO was directed to examine whether the investments in co-operative and other banks were made compulsorily to comply with the Karnataka Co-operative Societies Act, 1959 and, if so, to treat corresponding interest as eligible for deduction u/s 80P(2)(a)(i). If any portion of such interest is held ineligible, the AO must allow corresponding expenses while taxing it under "Income from Other Sources." ITAT further held that, as the assessee is a co-operative society and not hit by s.80P(4), it is entitled to deduction u/s 80P(2)(d) on interest from co-operative banks, with quantum verification by AO.
ITAT remanded the issue of deduction u/s 80P(2)(a)(i) on interest income from bank investments to the AO for verification. The AO was directed to examine whether the investments in co-operative and other banks were made compulsorily to comply with the Karnataka Co-operative Societies Act, 1959 and, if so, to treat corresponding interest as eligible for deduction u/s 80P(2)(a)(i). If any portion of such interest is held ineligible, the AO must allow corresponding expenses while taxing it under "Income from Other Sources." ITAT further held that, as the assessee is a co-operative society and not hit by s.80P(4), it is entitled to deduction u/s 80P(2)(d) on interest from co-operative banks, with quantum verification by AO.
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