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TMI Blog2016 (1) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... the findings of facts recorded by the ld. CIT(Appeals). He has also not been able to cite any authority where a different or contrary view is taken on this issue, which is in favour of the Revenue. We, therefore, find no justifiable reason to interfere with the impugned order of the ld. CIT(Appeals) allowing the claim of the assessee for deduction under section 80P(2)(a)(i) - Decided against revenue Direction to treat the interest income earned by the assessee on its investment as business income eligible for deduction under section 80P(2)(a)(i) by CIT(A) - Held that:- a perusal of the relevant balance-sheet of the assessee as on 31.03.2009 (copy of which at pages 67 & 68 of the paper book), shows that the total investment made by the assessee-Society was ₹ 22.08 crores as on 31.03.2009, whereas the Reserves & Surplus and Prof it & Loss A/c. balance as on the said date were ₹ 1.76 crores and 1.73 crores respectively. The major amount appearing on the liability side of the balance-sheet as on 31.03.2009 was deposit and other account aggregating to ₹ 28.89 crores, which comprised of various funds and deposits. Keeping in view these facts and figures, we are of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse of the appellate proceedings before the ld. CIT(Appeals), it was submitted that the assessee is a Cooperative Society, which is distinguished from a Cooperative Bank and, therefore, the provision of section 80P(4) invoked by the Assessing Officer to deny its claim for deduct ion under section 80P was not correct. Reliance in support of this contention was placed by the assessee on the decision of the Bangalore Bench of ITAT in the case of Bangalore Commercial Transport Credit Cooperative Society Limited (ITA No. 1069/Bang./2010 dated 08.04.2011), wherein it was held that there is a clear distinction between a Cooperative Bank and a Cooperative Society and that while the provisions of section 80P(4) are applicable only to Cooperative Banks, Credit Cooperative Societies are entitled for deduction under section 80P(2)(a)(i) of the Act. Reliance was also placed by the assessee on the decision of Tribunal in the case of Dwarka Souharda Credit Sahakari Limited, wherein it was held that none of the aims and objects of the assessee-Society permit ting it to accept deposits of money from public for the purpose of lending or investment, it could not be regarded as a Cooperative Bank as d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red under the Banking Regulation Act, 1949 and it was registered under the West Bengal Cooperative Societies Act , 1983. On the basis of al l these findings of fact recorded by him, the ld. CIT(Appeals) has held, by following the decision of the Tribunal cited on behalf of the assessee before him, that the assessee-Society is not a Cooperative Bank, which is covered by section 80P(4) and it is, therefore, eligible for deduction under section 80P(2)(a)(i). At the time of hearing before us, ld. D.R. has not been able to rebut or controvert any of the findings of facts recorded by the ld. CIT(Appeals). He has also not been able to cite any authority where a different or contrary view is taken on this issue, which is in favour of the Revenue. We, therefore, find no justifiable reason to interfere with the impugned order of the ld. CIT(Appeals) al lowing the claim of the assessee for deduction under section 80P(2)(a)(i) and upholding his impugned order on this issue, we dismiss Ground No. 1 of the Revenue s appeal . 7. In Ground No. 2, the Revenue has challenged the act ion of the ld. CIT(Appeals) in directing the Assessing Officer to treat the interest income of ₹ 2,06,49,203/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of Ground of appeal no. 1. This ground of appeal of the appellant is accordingly allowed . 9. Ld. D.R. contended that this issue involved in the appeal of the Revenue is squarely covered in favour of the Revenue by the decision of the Hon ble Supreme Court in the case of Totgar s Cooperative Sale Society Limited vs. - ITO reported in [2010] 322 ITR 283, wherein it was held that interest income arising to a Cooperative Society carrying on the business of providing credit facilities to its members or marketing of agricultural produce of its members, on the surplus, which is not required immediately for business purposes, from investment in short-term deposits and securities, has to be taxed as income from other sources. He contended that the relief allowed by the ld. CIT(Appeals) vide his impugned order passed in assessee s case thus is not in accordance with law laid down by the Hon ble Supreme Court in the case of Totgar s Cooperative Sale Society Limited. 10. Ld. Counsel for the assessee, on the other hand, contended that the decision of the Hon ble Supreme Court in the case of Totgar s Cooperative Sale Society Limited (supra) cited by the ld. D.R. is distinguish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of Tumkur Merchants Souharda Credit Cooperative Limited (supra) cited by the ld. Counsel for the assessee, the amount, which was invested in Bank to earn interest, was not an amount due to any member and which was not the liability shown in their accounts. In fact, the said amount, which was in the nature of prof it and gains, was not immediately required by the assessee for lending money to the members as there were no takers and the same, therefore, had been deposited in a Bank so as to earn interest. In these facts and circumstances of the case, as involved in the case of Tumkur Merchants Souharda Credit Cooperative Limited (supra), the decision of the Hon ble Supreme Court in the case of Totgar s Cooperative Sale Society Limited was found to be distinguishable on facts by the Hon ble Karnataka High Court and the interest income received by the assessee- Society on Bank deposits was held to be its business income being attributable to carrying on the business of banking eligible for deduction under section 80P(2)(a)(i) of the Act. 12. Keeping in view the decision of the Hon ble Supreme Court in the case of Totgar s Cooperative Sale Society Limited (supra) cited by the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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