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TMI Blog2015 (12) TMI 194X X X X Extracts X X X X X X X X Extracts X X X X ..... )(a)(i) and hold the assessee is entitled to deduction under section 80P(2)(a)(i) of the Act, in respect of interest income earned on fixed deposits, as well as that the said interest income forms art of the business income earned by the assessee and the same is not to be taxed under the head “Other Sources” - Decided in favour of assessee. - ITA No. 1028/Bang/2015 - - - Dated:- 20-11-2015 - Smt. Asha Vijayaraghavan, Judicial Member And Shri Inturi Rama Rao, Accountant Member For the Appellant : Shri Suresh Muthukrishnan For the Respondent : Smt. Neera Malhotra, CIT ORDER Per Smt. Asha Vijayaraghavan, Judicial Member This appeal is directed against the order of Commissioner of Income-tax (Appeals), Mangalore da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T (SC) 247 ITR 818 and Revathy CP Equipments Ltd. Vs. DCIT Ors. (Mad) 241 ITR 856. Accordingly, AO assessed the interest income of ₹ 28,75,000/- and denied deduction u/s 80P on the same. 6. On appeal the CIT(A) observed that in the case of Tumkur Merchants Souharda Credit Co-op Ltd., Hon ble Karnataka High Court analysed the case of M/s Totgars Co-op Sales Society Ltd., and observed that in that case apart from providing credit facilities to the members it was also in the business of marketing of agricultural produces grown by its members. Under these circumstances, the facts were distinguished and in the case of Tumkur Merchants Souharda Credit Co-op Ltd., the claim was allowed. Per contra, in the case of the assessee as in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee on Fixed Deposits requires to be assessed under the head OTHER SOURCES and not as part of the business of providing credit facilities and thereby holding that the appellant is not entitled to deduction u/s 80P[2][a][i] of the Act as claimed by the appellant in the return of income under the facts and in the circumstances of the assessee s case. (3) For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs. 10. The learned AR on the other hand, produced copy of the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot 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 was not shown as liability in their account. In fact this amount which is in the nature of profits and gains, was 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(J) of the Act. In fact similar view is taken by the Andhra Pradesh High Court in the case of CIT III, Hyderabad Vs. Andhra Pradesh State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessee is entitled to deduction under section 80P(2)(a)(i) of the Act, in respect of interest income earned on fixed deposits, as well as that the said interest income forms art of the business income earned by the assessee and the same is not to be taxed under the head Other Sources . In view of the matter, the deduction claimed by the assessee under section 80P(2)(a)(i) of the Act in respect of interest of ₹ 26,16,800/- earned from investments in fixed deposits and Govt. Securities out of surplus funds from business, is allowed. Consequently, the grounds raised y the assessee on this issue are allowed. 7. In the result, the assessee s appeal for assessment year :2010-11 is allowed . 11. Since the facts in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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