2013 (10) TMI 463

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.... SLR/Non SLR surplus funds which fall under the provisions of section 80P(2)(d) and not section 80P(2)(a). 3. Brief facts of the case are that with regard to the exemption u/s. 80P of the Act, the Assessing Officer has found that the assessee has declared net income of Rs. 35,88,673/- and claimed exemption u/s. 80P of the Act. The income stated to be interest income is earned out of the surplus funds beyond the SLR covered funds i.e., invested in UTI Mutual funds of Rs. 1,40,00,000/- and Rs. 80,00,000/- invested in fixed deposits. The income claimed exemption of Rs. 35,88,673/- is nothing but the income earned through the deposits/ investments made in various mutual funds and concerns but not carrying on the business of banking or provid....

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....ion in the case of CIT vs. Karnataka State Co-operative Apex Bank (251 ITR 194), only interest income on SLR funds has to partake the character of business income. Thus, the assessee's income by way of deposit in non-SLR funds in mutual funds and fixed deposits is not exempt under the provisions of section 80P of the Act. 5. On the other hand, the learned AR relied on the judgement of jurisdictional High Court in the case of CIT vs. Andhra Pradesh State Co-operative Bank Ltd. (336 ITR 516) (AP). 6. We have heard both the parties and perused the material on record. We find the same issue was considered by the Andhra Pradesh High Court in the case of CIT vs. Andhra Pradesh State Co- operative Bank Ltd. (cited supra) wherein the High Cou....