2019 (2) TMI 1435 - AT - Income Tax

Disallowing deduction u/s.80P in relation to interest income earned from Fixed Deposits kept with the Nationalized Banks - HELD THAT - In the absence of there being any change in the legal position prevailing on this issue and respectfully following the view taken by the Pune Bench of the Tribunal in ITO Vs. Sureshdada Jain Nagri Sahakari Patsanstha 2018 (11) TMI 1589 - ITAT PUNE and host of other orders reiterating the similar view, reverse the impugned order in denying deduction u/s.80P on the interest income earned on Fixed Deposits kept with Nationalized banks. - Decided in favour of assessee.

Summary

Issues:
- Deduction u/s.80P of the Income-tax Act, 1961 for interest income earned from Fixed Deposits kept with Nationalized Banks.

Analysis:
The appeal before the Appellate Tribunal ITAT Pune pertained to the denial of deduction u/s.80P of the Income-tax Act, 1961 in relation to interest income of ?8,88,884 earned from Fixed Deposits with Nationalized Banks for the assessment year 2015-16. The ld. CIT(A) had disallowed the deduction on the grounds that interest from nationalized banks did not qualify for deduction under this section.

Upon hearing both sides and examining the relevant material, the Tribunal noted that a previous order by the Pune Bench in a similar case had allowed the deduction u/s.80P. The Tribunal also referenced a case where the Hon’ble Karnataka High Court allowed the deduction on interest income, contrasting with the decision of the Hon’ble Delhi High Court which did not allow such deduction. Given the absence of a direct judgment from the jurisdictional High Court on the matter, the Tribunal followed the view favoring the assessee taken by the Hon’ble Karnataka High Court.

Considering the consistent view taken by the Pune Bench of the Tribunal and other similar orders, the Tribunal reversed the decision of the CIT(A) and directed that the deduction u/s.80P be granted for the interest income earned on Fixed Deposits with Nationalized banks. Consequently, the appeal was allowed by the Tribunal, and the order was pronounced in open court on 22nd February 2019.