PUNJAB STATE FEDERATION OF CO OPERATIVE HOUSE BUILDING SOCIETIES LTD Vs. INCOME TAX OFFICER
INCOME TAX APPELLATE TRIBUNAL
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S.K. Chander, Accountant Member -
(1.) THIS appeal by the assessee is directed against the order of the AAC dated 15-1-1981 relating to the assessment year 1974-75. The issue that has come up before us for consideration is, whether the assessee, which is a co-operative society and had invested funds in a savings bank account with another co-operative society, is entitled to deduction in respect of income by way of interest earned on such funds under Section 80P(2)(d) of the Income-tax Act, 1961 ('the Act').
(2.) We have heard the parties. Undisputed facts are that the assessee, known as The Punjab State Federation of Co-operative House Building Societies Ltd., is a co-operative society. It is an apex body of house building societies of the State of Punjab. The assessee received share capital amounting to Rs. 10 lakhs from the Government of Punjab and it purchased shares from member-societies worth Rs. 1,43,000. The assessee had placed funds with the Punjab State Co-operative Bank, Chandigarh. On these funds, it received interest of Rs. 30,521. In the return filed on 31-7-1979, a claim for exemption under Section 80P(2)(d) was made.
The ITO rejected this claim on the ground that these funds were not investments within the meaning assigned to this word 'investment' used in Section 80P(2)(d). This has been confirmed by the AAC.
(3.) WE have heard the parties and we are inclined to accept the claim of the assessee for the following reasons.;
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