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TMI Blog2015 (10) TMI 592X X X X Extracts X X X X X X X X Extracts X X X X ..... mit it back to Ld. AO for consideration afresh in accordance with law. - Decided in favour of assessee for statistical purpose. - I.T.A No.105/Bang/2015 - - - Dated:- 27-8-2015 - SMT. ASHA VIJAYARAGHAVAN AND SHRI. ABRAHAM P. GEORGE, JJ. For The Applicant : Smt. Pratibha, Advocate For The Respondent : Shri. Bhaskar Reddy, JCIT ORDER PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : In this appeal filed by assessee, its grievance is that its claim for deduction u/s.80P(2)(a)(i) of the Income-tax Act, 1961 ( the Act in short) was disallowed on interest earned by it from other banks. 02. Facts apropos are that assessee had filed return income for the impugned assessment year declaring nil income after claiming deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ITA.307 of 2014, dt.28.10.2014), had considered the issue of deduction u/s.80P(2)(a)(i) of the Act, for interest income. According to him, Hon ble jurisdictional High Court had cited the judgment of Hon ble Andhra Pradesh High Court in the case of CIT v. Andhra Pradesh State Cooperative Bank Ltd, [(2011) 200 Taxman 220] and held in favour of the assessee. 05. Per contra, Ld. DR submitted that in the case of Tumkur Merchants Souharda Credit Cooperative Society (supra) the amounts which were deposited were for short-term, whereas in the case of the assessee, amounts were placed in FDs on long-term basis. Reliance was placed on judgment of Hon ble Apex Court in the case of Totgar s Cooperative Sale Society Ltd (supra). 06. We have per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were not justified in denying the said benefit in terms of Sub-sec.(2) of Section 80P of the Act. In support of his contentions, he relied on several judgments and pointed out that the Apex Court in the aforesaid judgment has not laid down any law. 5. Per contra, learned counsel for the Revenue strongly relied on the said judgment of the Supreme Court and submitted, the case is covered by that judgment of the Apex Court and no case for interference is made out. 6. From the aforesaid facts and rival contentions, the undisputed facts which emerges is, the sum of ₹ 1,77,305/- represents the interest earned from short-term deposits and from savings bank account. The assessee is a Cooperative Society providing credit facilities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other provisions of the statute in the case of CAMBAY ELECTRIC SUPPLY INDUSTRIAL CO. LTD. VS. COMMISSIONER OF INCOME-TAX, GUJARAT-ll reported in ITR VOL. 113 (1978) PAGE 842 at page 93 as under: As regards the aspect emerging from the expression attributable to occurring in the phrase profits and gains attributable to the business of the specified industry here generation and distribution of electricity on which the learned Solicitor-General relied, it will be pertinent to observe that the legislature has deliberately used the expression attributable to and not the expression derived from . It cannot be disputed that the expression attributable to is certainly wider in import than the expression derived from . Had the expre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said amount idle. If they deposit this amount in bank so as to earn interest, the said interest income is attributable to the profits and gains of the business of providing credit facilities to its members only. The society is not carrying on any separate business for earning such interest income. The income so derived is the amount of profits and gains of business attributable to the activity of carrying on the business of banking or providing credit facilities to its members by a co-operative society and is liable to be deducted from the gross total income under Section 80P of the Act. 9. In this context when we look at the judgment of the Apex Court in the case of M/s. Totgars Co-operative Sale Society Ltd., on which reliance is plac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 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. In fact similar view is taken by the Andhra Pradesh High Court in the case of COMMISSIONER OF INCOME-TAX III, HYDERABAD vs. ANDHRA PRADESH STATE COOPERATIVE BANK LTD., reported in (2011) 200 TAXMAN 220/12 In that view of the matter, the order passed by the appellate authorities denying the benefit of deduction of the aforesaid amount is unsustainable in law. Accordingly it is hereby set aside. The substantial question of law is answered in favour of the assessee and against the revenue. Hence, we pass the following order. Appeal is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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