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TMI Blog2014 (11) TMI 609X X X X Extracts X X X X X X X X Extracts X X X X ..... ing or providing credit facilities to its members, are distinct and separate activities; the former connotes a larger activity than the activity of providing credit facilities to its members - the Tribunal was right in allowing deductions u/s 80P(2)(a)(i) of the Act on interest income as being attributable to the business of banking – decided against revenue. - TAX APPEAL NO. 573 of 2003 - - - Dated:- 10-10-2014 - MR. KS JHAVERI AND MR. K.J.THAKER, JJ. MR SUDHIR M MEHTA, ADVOCATE FOR THE APPELLANT ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE KS JHAVERI) 1. Being aggrieved and dissatisfied with the impugned judgement and order dated 13.02.2003 passed by the Income Tax Appellate Tribunal, Ahmedabad Bench B (Tribunal) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n under Section 80(P)(2)(a)(i) of the Income Tax Act, 1961on interest income as being attributable to the business of banking. 4. Tax Appeal No. 178 of 2003 has already been decided by a co-ordinate Bench of this Court vide judgement and order dated 29.07.2005, 01/09-08-2005. The said decision has been reported in 280 ITR 282 [Commissioner of Income Tax III vs. The Baroda Peoples Co-op Bank Ltd]. The issue involved in the present appeal being on the same set of facts and circumstances shall also be governed by the same decision passed in Tax Appeal No. 178 of 2003. Para 52 53 of the said decision reads as under: 52. To summarise : i. The finding of this Court rendered in case of Gujarat State Co-operative Bank Limited (supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... visions of the statute as the Apex Court could not have contemplated passing an order contrary to the provisions of the Act; viii. Thus the direction by the Supreme Court can only mean ascertainment of utilization of net income of earlier years, which forms part of the funds which are invested, and given the nomenclature of voluntary reserves; ix. Under Section 80P(2)(a)(i) of the Act the two activities, viz., business of banking or providing credit facilities to its members, are distinct and separate activities; the former connotes a larger activity than the activity of providing credit facilities to its members; x. The provision of Section 80P has been introduced on the statute book to encourage and promote growth of the co-opera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xvi. There is a live link, a proximate nexus between Clauses (a) to (o) of Section 6(1) and the business of 'Banking' under Section 5(b) of the B.R. Act; xvii. The definition of 'Banking' under Section 5(b) of the B.R. Act does not stipulate that investment should be should be only to the extent provided either by the GCS Act or B.R. Act; xviii. The meaning of the term 'investment' in Section 5(b) of the B.R. Act has to be read so as to denote placing of property in business so that it will be safe and yield profit; xix. Considering the provisions of Section 6(2) and Section 8 of the B.R. Act to treat the investments made by an assessee as being investments not in the course of business is not warranted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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