ITAT Ahmedabad Judgments — December 2021

The Tribunal held that interest income from surplus funds deposited with banks, not attributable to the business of providing credit to members, is not eligible for deduction under Section 80P(2)(a)(i). However, it allowed deduction under Section 80P(2)(c) for other activities and directed the AO to allow proportionate expenses against the interest income.

The Tribunal upheld the CIT(A)'s decision to delete the addition, finding that the CIT(A) had examined the details and remand report and given well-reasoned findings. Therefore, no interference was called for.

The Tribunal held that interest income from surplus funds deposited with banks, not attributable to the business of providing credit to members, is not eligible for deduction under Section 80P(2)(a)(i). However, it allowed deduction under Section 80P(2)(c) for other activities and directed the AO to allow proportionate expenses against the interest income.