2026 (3) TMI 1407

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....e assessment order passed under section 143 (3) of The Income tax Act [ The Act] dated 3 November 2016 by The Income Tax Officer Ward 6 (2) (1), Bangalore (the learned AO) determining the total income of the assessee at Rs. 6,302,920, was dismissed. 2. The solitary ground raised by the assessee in substance is with respect to not allowing the assessee deduction under section 80P(2)(a)(i) of the income tax act on the interest income earned from the bank which was claimed by the assessee as income attributable to the business of the assessee but treated by the learned assessing officer and confirmed by the learned CIT - A as income from other sources and thereafter also denied the deduction to the assessee under section 80 P (2) (d) of the....

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....d that the income of bank interest earned by the assessee cannot be considered as income from business but it is income from other sources and therefore the assessee cannot claim deduction under section 80P(2)(a)(i) of the act because of the decision of the honourable Karnataka High Court in case of Totagars cooperative sale society. Thus, the appeal of the assessee was dismissed. 6. The learned authorized representative Ms. Sahana THM (Advocate) vehemently submitted that assessee is a credit cooperative society, it is eligible for deduction under section 80P(2)(a)(i) of the act. The claim of the assessee is not hit by the provisions of section 80P(4) of the act and further the claim of the assessee is covered in favour of the assessee b....

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....rom its deposit with the other banks which are also cooperative societies are claimed by the assessee as business income and as such interest income is also attributable to the business of the assessee of providing credit facilities to its members claimed its deduction under section 80P(2)(a)(i) of The Income Tax Act. 9. Honourable Karnataka High Court in Tumkur Merchants Souharda Credit Cooperative Ltd. vs. Income-tax officer Word-V, Tumkur [2015] 55 taxmann.com 447 (Karnataka)/[2015] 230 Taxman 309 (Karnataka)[28-10-2014] has held that where co-operative society was engaged in business of providing credit facilities to its members, deposited excess amount for short term in bank, interest earned was entitled to be deducted under section....