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TMI Blog2015 (7) TMI 946X X X X Extracts X X X X X X X X Extracts X X X X ..... e, therefore, hold that assessee was eligible for claiming deduction u/s.80P(2)(a)(i) of the Act, on the interest earned on the FDs placed by it with banks, this being a part of its business income. We do not find it necessary to interfere with the order of the CIT (A). - Decided in favour of assessee. - I.T.A No.503/Bang/2015 - - - Dated:- 24-7-2015 - Abraham P. George and Shri Vijaypal Rao, JJ. For the Petitioner :None For the Respondent : Shri. Sunil Kumar Agarwal, JCIT ORDER PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : In this appeal filed by Revenue, it is aggrieved that CIT (A) allowed the claim of assessee for deduction u/s.80P(2)(a)(i) of the Income-tax Act, 1961 ( the Act in short), relying on the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mounts which were placed in deposits were having direct nexus with the amounts received as deposits from members. When there were no immediate need of the funds for loan disbursements, instead of keeping the funds idle, assessee had placed it with the banks as deposits. As per assessee, it was bound to pay interest to the members. Submission of assessee was that acceptance of deposits from its members, closure of such deposits and repayments were regular and routine feature of its business. As per assessee, unless the funds which were remaining with it were placed in banks, it would not have been possible for it to pay the interest due to its members. 04. CIT (A) was impressed by the contentions raised by assessee and relying on the judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f its objects wanted to lend, the only available choice for assessee, in order not to keep the funds idle, was to place it in banks for earning interest. Hon ble jurisdictional High Court in the case of CIT v. Tumkur Merchants Souharda Credit Cooperative Ltd (ITA.307 of 2014, dt.28.10.2014), which was also in relation to a cooperative society having as its object, business of providing business credits to its members, held as under at paras 3 to 10 of the judgement dt.28.10.2014 : 4. The learned counsel for the assessee assailing the impugned order contended, the interest accrued in a sum of ₹ 1,77,305/- is from the deposits made by the assessee in a nationalized bank out of the amounts which was used by the assessee for providin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s: 80P (1) Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub- section (2), in computing the total income of the assessee. (2) The sums referred to in sub-section (1) shall be the following, namely: (a) in the case of co-operative society engaged in - (i) )carrying on the business of banking or providing credit facilities to its members, or (ii) xxx (iii) xxx (iv) xxx (v) xxx (vi) xxx (vii) xxx the whole of the amount of profits and gains of business attributable to any one or mor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 80J. In our view, since the expression of wider import, namely, attributable to , has been used, the legislature intended to cover receipts from sources other than the actual conduct of the business of generation and distribution of electricity. 8. Therefore, the word attributable to is certainly wider in import than the expression derived from . Whenever the legislature wanted to give a restricted meaning, they have used the expression derived from . The expression attributable to being of wider import, the said expression is used by the legislature whenever they intended to gather receipts from sources other than the actual conduct of the business. A Cooperative Society which is carrying on the business of providing credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a liability and it was shown in the balance sheet on the liability side. Therefore, to that extent, such interest income cannot be said to be attributable either to the activity mentioned in section 80P(2)(a)(i) of the Act or under Section 80P(2)(a)(iii) of the Act. Therefore in the facts of the said case, the Apex Court held the assessing officer was right in taxing the interest income indicated above under Section 56 of the Act. Further they made it clear that they are confining the said judgment to the facts of that case. Therefore it is clear, Supreme Court was not laying down any law. 10. In the instant case, the amount which was invested in banks to earn interest was not an amount due to any members. It was not the liability. It ..... X X X X Extracts X X X X X X X X Extracts X X X X
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