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TMI Blog2022 (5) TMI 1063X X X X Extracts X X X X X X X X Extracts X X X X ..... the Ld. Commissioner of Income- Tax (appeals) has erred in law and on facts in deleting the addition of Rs. 1,46,68,200/- on account of interest earned under section 80P(2)(d) of the Act. (ii) On the facts and circumstances of the case, the Ld. Commissioner of Income- Tax (Appeals) ought to have upheld the order of the Assessing Officer. (iii) It is, therefore prayed that the order of the Ld. Commissioner of Income-tax(Appeals) may be set aside and that of the Assessing Officer be restored. (iv) The appellant prays for leave, to amend or alter any ground or add a new ground which may be necessary." 3. The assessee is a Cooperative Society and is engaged in providing credit facilities to its members only from the deposits received fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as Co-operative banks of entities other than co-op. society will not be allowed as deduction u/s 80P of the Act. Hence, the deduction claimed by it on interest earned from entities other than co.-op. societies are disallowed and added to the income of the assessee. Accordingly, addition of Rs.1,46,98,641/- is made to the total income of the assessee under the head of income from other sources u/s. 56of the I.T. Act, 1961. As regards arguments of the assessee that proportionate expenses to be allowed in interest income. It is seen that assessee has invested its surplus funds in Nationalized Bank/Co-op. Bank. There is no nexus seen between the surplus fund invested in nationalized bank/Co-op, bank and expenses claimed by the assessee. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f deduction under Sec.80P(2)(d) of the Act. The Honourable Gujarat High Court made following observations in respect of interest earned from deposits kept with a cooperative bank: Therefore, it is only the interest derived from the credit provided to its members which is deductible under section 80P(2)(a)(i) of the Act and the interest derived by depositing surplus funds with the State Bank of India not being attributable to the business carried on by the appellant, cannot be deducted under section 80P(2)(a) (i) of the Act. If the appellant wants to avail of the benefit of deduction of such interest income, it is always open for it to deposit the surplus funds with a co-operative bank and avail of deduction under section 80P(2)(d) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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