#interest income

ITAT Mumbai rules that interest earned by Indian branches of foreign banks from their head office or overseas branches is not taxable under Section 9(1)(v)(c) of the Income Tax Act, as it constitutes payment to self rather than income. The decision reinforces the mutuality principle, shielding such transactions from domestic tax liability for foreign banks operating in India.

The ITAT Delhi has ruled that interest earned on non-convertible debentures during the broken period between purchase and sale-paid by the buyer, not the issuer-constitutes interest income under 'Income from Other Sources', not capital gains. This clarifies a critical tax treatment for institutional investors trading NCDs in secondary markets, preventing misclassification that could distort tax liability and compliance strategies.

The ITAT Mumbai has ruled that seized financial calculations, without independent corroboration or borrower confirmation, cannot substantiate an addition for undisclosed interest income. This reinforces the burden of proof on the revenue and protects taxpayers from speculative assessments based solely on circumstantial material recovered during searches.

ITAT Mumbai rules that co-operative societies earning interest from deposits with co-operative banks qualify for deduction under Section 80P(2)(d), reinforcing the co-operative character of such banks under tax law. The decision clarifies eligibility for co-operative societies, impacting tax assessments for similar entities.

ITAT Bangalore rules that interest earned by co-operative societies on surplus funds parked in banks is attributable to their credit business under Section 80P(2)(a)(i), entitling them to tax exemption. The ruling overturns the revenue's restrictive interpretation, clarifying that such income cannot be reclassified as 'income from other sources' for co-operatives engaged in lending operations.

ITAT Mumbai holds that interest income earned by co-operative societies from co-operative banks qualifies for deduction under Section 80P(2)(d), clarifying statutory interpretation.