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TMI Blog2015 (3) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... he State Government to the cotton growing farmers as price of cotton purchased are immediately honoured by the assessee and the State Government then reimburses the assessee after some time. It is, therefore, obvious that the funds of the bank are used in the process and for such use the State Government is compensating it by paying the commission. Considering the law looked into supra, we find that the said commission also qualifies for such deduction. See CIT vs Nawanshahar Central Coop. Bank Ltd [2012 (9) TMI 404 - SUPREME COURT] - Decided in favour of assessee. - I T A No.73 of 2009. IT A No.137 of 2010. - - - Dated:- 24-2-2015 - B.P. Dharmadhikari And A.P. Bhangale, JJ. For the Appellant : Shri Anand Parchure, Advocate. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stood strictly in commercial sense. He further states that the facility made available to the State Electricity Board or to the Cotton Growers Federation which is not an integral part of the banking activity or essential for the banking purpose, cannot qualify for deduction under Section 80P(2)(a) of the Income Tax Act, 1961 [for short, the said Act ]. 5] Advocate Shri K.P. Dewani, on the other hand, submits that the banking activity is to be construed in common parlance and all activities which an assessee can legally undertake are covered thereunder. He also submits that the questions sought to be urged are already covered by the judgment of the Hon'ble Apex Court as also by the Division Bench of this Court and hence are not subst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered against the appellant. 9] Insofar as the second question is concerned, the commission is earned by the assessee because of the facility of prepayment extended by the bank to the farmers under the Cotton Monopoly Scheme introduced by the State Government for procurement of cotton. The cheques issued by the State Government to the cotton growing farmers as price of cotton purchased are immediately honoured by the assessee and the State Government then reimburses the assessee after some time. It is, therefore, obvious that the funds of the bank are used in the process and for such use the State Government is compensating it by paying the commission. Considering the law looked into supra, we find that the said commission also qualifies for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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