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TMI Blog2015 (9) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... s not immediately required by the assessee for lending money to the members, as there were no takers. Therefore they had deposited the money in a bank so as to earn interest. The said interest income is attributable to carrying on the business of banking and therefore it is liable to be deducted in terms of Section 80P(1) of the Act. See Totagars Co-operative Sale Society Ltd. (2010 (2) TMI 3 - SUPREME COURT) - Decided in favour of assessee. - I.T.A. No.6627/Mum/2014 - - - Dated:- 10-8-2015 - SHRI B.R.BASKARAN, J. For The Appellant : Shri Prakash Jhunjhunwala For The Respondent : Shri Maurya Pratap ORDER PER BENCH: The assessee has filed this appeal challenging the order dated 12- 06-2014 passed by ld CIT(A)-26, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e year under consideration declaring NIL income after claiming deduction u/s 80P(2)(a)(i) of the Act. Sec. 80P(1) of the Act provides for deduction of income specified in sec. 80P(2) in case of an assessee, being a co-operative society. Sec. 80P(2)(a)(i) provides deduction of the whole of the amount of profits and gains of business attributable to any one or more of such activities. Since the assessee is a co-operative society engaged in carrying on the business providing credit facilities to its members, it claimed deduction u/s 80P(2)(a)(i) of the Act. However, sec. 80P(4) was inserted by Finance Act 2006 w.e.f. 1.4.2007 and the same reads as under:- 80P(4) The provisions of this section shall not apply in relation to any co-operative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FD/SAVING A/c Interest amount 1 Mumbai Dist.Central Co-op Bank. FD 13,48,195 2 Mumbai Dist.Central Co-op Bank. SAVING 196 3 Oriental Bank of Commerce SAVING 180 4 Punjab National Bank SAVING 103 5 Punjab National Bank FD 1230 6 Maharashtra State Sahakari Bank SAVING 187 7 Apna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reliance on the decision rendered by Hon ble Supreme Court in the case of Totgars Co-operative Sale Society Ltd (2010)(229 CTR (SC) 209) Aggrieved, the assessee has filed this appeal. 7. The Ld A.R submitted that the decision in the case of Totgars Cooperative Sale Society Ltd (supra) has been rendered by the Hon ble Supreme Court in a different context and hence the Ld CIT(A) was not justified in placing reliance on it. The Ld A.R invited my attention to the decision rendered by Hon ble Karnataka High Court inthe case of Tumkur merchants Souharda Credit Cooperative Ltd (2015)(230 Taxman 309) and submitted that the Hon ble Karnataka High Court has discussed about the decision rendered by the Apex Court in paragraph 9 of the order and ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on u/s 80P(2)(a)(i) on the interest income earned from deposits kept with banks on the reasoning that the same shall form part of its business income. The Hon ble High Court upheld the said view by duly considering the decision rendered by Hon ble Supreme Court in the case of Totgars Cooperative Sale Society Ltd (supra). For the sake of convenience, I extract below the observations made by the Hon ble Karnataka High Court:- 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 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid retained amount which was payable to its members from whom produce was bought, was invested in a short-term deposit/security. Such an amount which was retained by the assessee - Society was 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, Su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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