https://www.taxtmi.com/caselaws?id=329918 Interest earned by a co-operative credit society on surplus deposits with a non-co-operative bank is not attributable to its business of providing credit facilities to members and does not qualify for deduction under section 80P(2)(a)(i). The direct and proximate nexus test distinguishes operational lending income from income earned by investing funds not immediately required for that activity. Interest from a commercial bank also falls outside section 80P(2)(d), which applies to investments with another co-operative society. Revision under section 263 is valid where an assessment fails to examine the tax treatment of such bank-deposit interest, rendering it erroneous and prejudicial to Revenue interests. en-us Mon, 25 Apr 2016 00:00:00 +0530 Sat, 22 Nov 2025 12:05:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=329918 Interest earned by a co-operative credit society on surplus deposits with a non-co-operative bank is not attributable to its business of providing credit facilities to members and does not qualify for deduction under section 80P(2)(a)(i). The direct and proximate nexus test distinguishes operational lending income from income earned by investing funds not immediately required for that activity. Interest from a commercial bank also falls outside section 80P(2)(d), which applies to investments with another co-operative society. Revision under section 263 is valid where an assessment fails to examine the tax treatment of such bank-deposit interest, rendering it erroneous and prejudicial to Revenue interests. Case-Laws Income Tax Mon, 25 Apr 2016 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=329918