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2015 (3) TMI 1411 - AT - Income TaxDeduction u/s 80P - CIT(A) treating the receipts on account of interest from employees, interest on savings, dividend and income from no dues certificates as income from banking business activities and consequent allowance of deduction u/s 80P(2)(i)(a) 80P(2)(d) - HELD THAT - It is evident from the assessment order that the assessee had income from interest from the employees, interest on savings, dividend and income from no dues certificate which has been held by the AO as Income from other sources. CIT(A) had dealt with each items in his order and had given detailed findings on all the issues raised before him. After considering various judgements as mentioned above he treated the income as Income from business or profession and also entitled the assessee for deduction u/s 80P(2)(i)(a) of the Act i.e. interest from employees, interest on savings, dividend and Income from no dues certificate. DR has not controverted the findings given by the ld. CIT(A). The judgements relied on by the ld. DR in the cases of Totgar s Co-operative Sale Society Ltd. 2010 (2) TMI 3 - SUPREME COURT is on surplus fund deposited with bank and interest income. CIT vs. Nawanshahar Central Co-Op. Bank Ltd. 3 2012 (9) TMI 404 - SC ORDER are squarely applicable in this case as the Hon'ble Supreme Court allowed 80P(2)(a)(i) deduction on underwriting commission and interest on PSEP Bond. Thus in view of the facts and circumstances of the case, we find no reason to interfere in the order of the ld. CIT(A) and the appeal of the Revenue is dismissed.
Issues:
Appeal against order of CIT(A) for assessment year 2006-07 regarding treatment of receipts as income from banking business activities and deduction u/s 80P(2)(i)(a) & 80P(2)(d). Analysis: The appeal was filed by the Revenue against the order of the ld. CIT(A) for the assessment year 2006-07. The main issue revolved around the treatment of receipts on account of interest from employees, interest on savings, dividend, and income from no dues certificates as income from banking business activities and the consequent allowance of deduction u/s 80P(2)(i)(a) & 80P(2)(d). The AO observed that the receipts of interest were not from the members of the bank but from other persons, and thus, not covered under banking activities. The AO treated this income as taxable and not entitled to deduction u/s 80P(2)(i)(a). The assessee's reply was not found convincing as the activities were considered banking business, and income from various sources was taxed as non-banking activities. The ld. CIT(A) allowed the appeal of the assessee by relying on various decisions and treated the income as Income from business or profession, entitling the assessee to deduction u/s 80P(2)(i)(a). The Tribunal found no reason to interfere in the order of the ld. CIT(A) and dismissed the appeal of the Revenue. The Tribunal noted that the assessee had income from interest from employees, interest on savings, dividend, and income from no dues certificate, totaling to a specific amount, which the AO treated as Income from other sources. The ld. CIT(A) provided detailed findings on each item and treated the income as Income from business or profession, allowing deduction u/s 80P(2)(i)(a). The Tribunal observed that the judgements cited by the ld. DR were not applicable to the current case, and the decisions relied on by the ld. CIT(A) supported the treatment of income as eligible for deduction u/s 80P(2)(i)(a). The Tribunal upheld the order of the ld. CIT(A) and dismissed the appeal of the Revenue. In conclusion, the Tribunal upheld the decision of the ld. CIT(A) to treat the income from various sources as Income from business or profession, entitling the assessee to deduction u/s 80P(2)(i)(a). The Tribunal found no grounds to interfere in the order of the ld. CIT(A) and thus dismissed the appeal of the Revenue.
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