Ahmedabad ITAT: Interest Income from Nationalized Banks Not Eligible for Deduction U/S 80P

The deduction under Section 80P of the Income Tax Act, 1961 must not be permitted on interest made through the nationalized banks the Income Tax Appellate Tribunal (ITAT) Ahmedabad Bench stated during upholding the Commissioner of Income Tax (Appeal) order.

The taxpayer Gujarat State Co-op Agriculture and Rural Development Bank Ltd is stated as a cooperative society committed to furnishing credit utilities to its members concerning agriculture and related activities and rural development. At the time of the assessment proceedings, the Assessing Officer (AO) rejected the claim of deduction under section 80P(2)(d) of the Income Tax Act on interest income made via nationalized banks.

The taxpayer is dissatisfied with the order and then filed the petition to the commissioner of Income Tax (Appeals).

Under the provision of section 80P(2)(d), the taxpayer was qualified for deduction of any income through the method of interest or dividend incurred through its investment from any other cooperative societies only, CIT(A) witnessed at the time of proceedings.

commissioner of Income Tax (Appeals) for the concern of the present case marked, the income from the interest would have been made through the Nationalised banks and not through the additional cooperative societies, hence it stated that the taxpayer was not get qualified for the deduction under section 80P(2)(d) of the Income Tax Act.

Post analyzing the facts and submissions of both parties, the tribunal laid on the decision of Totgars Cooperative Sales Society Ltd. Vs. ITO and State Bank of India (SBI) Vs. CIT the Two member bench of Annapurna Gupta (Accountant Member) and Madhumita Roy (Judicial Member) dismissed the plea that the taxpayer filed.

Read also: ITAT: Tax Deduction U/S 80P Can’t Claim If Income Made Via Commercial Activity

The revenue’s attorney, Vijay Kumar Jaiswal, made an appearance. The assessee was not represented throughout the hearings by anybody.