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Wednesday, March 03, 2010

80P no on int from STDs

I-T - Sec 80P - Cooperative society invests surplus funds in short-term deposits - claims deduction for interest - Income tax - Sec 28, 56, 80P - Assessee is a cooperative society - provides credit facilities and markets agricultural produce of its members - invests surplus funds not required in its regular business as short-term bank deposits and also securities - earns interest income - claims deduction u/s 80P(2)(a)(i) - AO disallows the same by treating it as 'income from other sources' u/s 56 - Tribunal and High Court reject the assessee's appeals - Issue goes to the Apex Court which has held that. : Since such income is not operational profits eligible for deduction, it falls under head 'income from other sources' u/s 56 and is taxable: Supreme Court (See 'Breaking News' + '2010-TIOL-11-SC-IT') M/s The Totgars Cooperative Sale Society Limited Vs ITO, Karnataka (Dated: February 8, 2010)