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TMI Blog2015 (12) TMI 287X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 80P - Decided in favour of assessee - I.T.A. No.5793/Mum/2014 - - - Dated:- 14-8-2015 - SHRI B.R.BASKARAN (Accountant Member) For The Appellant : Shri D P Shetty For The Respondent : Shri K P RR Murty ORDER PER BENCH: The assessee has filed this appeal challenging the order dated 3.6.2014 passed by ld CIT(A)-26, Mumbai and it relates to the assessment year 2010-11. The assessee is aggrieved by the decision of ld CIT(A) in holding that the interest income earned on the deposits kept with banks is not eligible for deduction u/s 80P(2)(a)(i) of the Act and hence liable to be assessed as income from other sources. 2. The facts relating to the above said issue are stated in brief. The assessee is a co-operative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank means a society having its area of operation confined to a taluk and the principal object of which is to provide for long term credit for agricultural and rural development activities. 3. The assessing officer, after referring to the provisions of Banking Regulation Act, held that the assessee is a bank and hence it is hit by the provisions of sec. 80P(4) of the Act. Accordingly he rejected the claim for deduction u/s 80P of the Act. 4. In the appellate proceedings, the ld CIT(A) held that the assessee cannot be considered to be a co-operative bank. On this decision, the revenue has not come on appeal before the Tribunal and hence the finding given by Ld CIT(A) has attained finality. Since the assessee is not considered as bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o-operative Sale Society Ltd (2010)(229 CTR (SC) 209) Aggrieved, the assessee has filed this appeal. 6. I heard the parties and perused the record. I notice that an identical issue was considered by me in the case of M/s Jaoli Taluka Sahakari Patpedhi Maryadit V/s ITO in I.T.A. No.6627/Mum/2014 relating to AY 2010-11 and I have decided the issue in favour of the assessee, vide my order dated 10.8.2015. For the sake of convenience, I extract below the operation portion of the said order: 9. I heard the parties and perused the record. In my view, the decision rendered by Hon ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd (supra) squarely applies to the facts of the present case. In the case bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 placed, the Supreme Court was dealing with a case where the assessee-Cooperative Society, apart from providing credit facilities to the members, was also in the business of marketing of agricultural produce grown by its members. The sale consideration received from marketin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dhra Pradesh High Court in the case of CIT v. Andhra Pradesh State co-operative Bank Ltd., [2011] 200 Taxman 220/12 taxmann.com66. 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: 7. Consistent with the view taken in the case of M/s Jaoli Taluka ahakari Patpedhi Maryadit (supra), I hold that the interest income is assessable as profit and gains of business in the hands of the assessee and accordingly, it is liable for deduction u/s 80P(2)(a)(i) of the Act. Accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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