2023 (4) TMI 894

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....order dated 15.12.2022 of National Faceless Appeal Centre (NFAC), Delhi pertaining to assessment year 2019-20. 2. The dispute in the present appeal is confined to disallowance of deduction claimed under Section 80P of the Income-Tax Act, 1961 for an amount of Rs.32,30,040. 3. Briefly, the facts relating to this issue are, the assessee is a registered thrift and credit cooperative society engaged....

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....ted the aforesaid disallowance before learned Commissioner (Appeals), however, referring to the provisions of section 80P(2) of the Act he upheld the disallowance on the reasoning that the interest income earned by the assessee is chargeable under the head 'income from other sources' and not the 'business income' of the assessee. 4. Before me, learned counsel appearing for the assessee submitted ....

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....easure the interest income generated is applied for disbursement of loan and repayment of deposits to its members. Thus, he submitted, the interest income earned is connected to assessee's business, hence, would be covered under Section 80P of the Act. In this context, he relied upon the following decisions: 1. CIT vs. Shikhar Chand Jain, IT Appeal Nol.22 of 1999 dated 28.04.2003 (Hon'ble Ma....

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....t facility to them at the time of their requirement. It is further observed that surplus funds not immediately required for deployment is kept in fixed deposits, which in turn, are pledged to the over draft facility taken by the assessee for transfer of funds to members either as loan or as repayment. Thus, it can be seen that the investment in fixed deposits is to augment the business activity of....