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2024 (6) TMI 1017 - AT - Income TaxIssues Involved: 1. Condonation of delay in filing appeals. 2. Eligibility of deduction u/s 80P(2)(d) of the Income Tax Act for interest income from co-operative banks. 3. Assessment of interest income from co-operative banks under section 56 of the Income Tax Act. Summary: Issue 1: Condonation of delay in filing appeals The appeals were filed by the assessee against three orders of CIT(A) with a delay of 20 days. The Tribunal, after perusing the reasons for the delay, found a reasonable cause and no latches on the part of the assessee. The delay was condoned, and the appeals were disposed of on merits. Issue 2: Eligibility of deduction u/s 80P(2)(d) for interest income from co-operative banks The assessee claimed deduction under section 80P for interest income from a co-operative society. However, the CIT(A) disallowed the claim, stating that interest income from co-operative banks is not eligible for deduction under section 80P(2)(d) of the Act. The Tribunal noted that the jurisdictional High Court had held that interest income from a cooperative bank does not qualify for deduction under section 80P(2)(d) as it is not received from a co-operative society. Issue 3: Assessment of interest income from co-operative banks The CIT(A) assessed interest income from investments with a cooperative bank as "Income from Other Sources" under section 56 of the Act. The Tribunal observed that the interest income assessed under this head was not granted deduction under section 80P. However, based on the compliance of investments with the Karnataka Co-operative Societies Act, 1959, and relevant rules, the Tribunal directed the AO to consider such interest income as "business income" eligible for deduction under section 80P(2)(a)(i) if investments were made under compulsion as per the Act and Rules. In conclusion, the Tribunal allowed the appeals of the assessee for statistical purposes, emphasizing the importance of compliance with relevant provisions for claiming deductions under the Income Tax Act.
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