2011 (11) TMI 886 - AT - Income Tax

Summary

Issues involved: Appeal by Revenue challenging deletion of addition u/s 80P(2)(a)(i) of the I.T. Act, 1961.

The judgment pertains to an appeal by the Revenue against the order of the Commissioner of Income Tax (Appeals) deleting the addition of Rs. 14,66,113/- made by the Assessing Officer to the income of the assessee as it was not covered u/s 80P(2)(a)(i) of the I.T. Act, 1961. The Tribunal considered the contention of the assessee that the impugned issue was covered by a previous decision in the case of the assessee itself. The Revenue did not contest this assertion.

The Tribunal examined the facts of the case, which involved a cooperative society providing housing facilities and income sources including interest from loans, rent, and miscellaneous income. The authorized representative argued for deduction u/s 80P(2)(a)(i) for various interest incomes and miscellaneous income. The Tribunal considered decisions of the Supreme Court, High Courts, and ITAT, Indore Bench, supporting the eligibility of such incomes for deduction u/s 80P(2)(a)(i).

After hearing both parties, the Tribunal found that the interest income from fixed deposits, savings accounts, loans, and advances qualified for deduction u/s 80P(2)(a)(i) as part of the banking activities of the assessee. The Tribunal referred to previous judgments and held that income must arise in the course of the banking business to be eligible for exemption. The appeal of the Revenue was dismissed, affirming the order of the CIT(A) in favor of the assessee.