SRI JENUKAL PATTINA SOUHARDA SAHAKARI NYT,TIPTUR vs. INCOME TAX OFFICER, WARD-1, TIPTUR

ITA 2245/BANG/2026Status: DisposedITAT Bangalore21 September 2026AY 2020-218 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that interest earned by a co-operative society from deposits of surplus funds in banks is eligible for deduction under Section 80P(2)(a)(i) as it is inextricably linked to its business of providing credit facilities. The jurisdictional High Court's decision in Tumkur Merchants Souharda Credit Co-operative Ltd. was followed.

What were the facts?

The assessee, a Souharda Sahakari society, claimed deduction under Section 80P(2)(a)(i) for interest income earned from bank deposits. The Assessing Officer disallowed this deduction, treating the interest as 'Income from Other Sources'. The CIT(A) partly allowed the appeal, allowing deduction on business income but upholding disallowance on interest income from surplus funds.

What were the issues?

Whether interest income earned by a co-operative society from deposits of surplus funds is eligible for deduction under Section 80P(2)(a)(i) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 80P(2)(a)(i),Section 56,Section 80P(2)(d),Section 57

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI PRASHANT MAHARISHI & SHRI SANDEEP SINGH KARHAIL

PER SANDEEP SINGH KARHAIL, JUDICIAL MEMBER:

The assessee has filed the present appeals against the separate impugned orders dated 25/03/2026 and 12/03/2026, passed under section 250 of the Income Tax Act, 1961 (“the Act”) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year

The order continues below.

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