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TMI Blog2015 (9) TMI 1403X X X X Extracts X X X X X X X X Extracts X X X X ..... . As a measure of safety minimum liquid and convenience of fund movement the appellant society had to keep its surplus liquid funds with different banks including nationalized banks. Therefore, in view of above discussion and relying on the decision of Tumkur Merchants Souharda Credit Co-op. Ltd.(2015 (2) TMI 995 - KARNATAKA HIGH COURT ), the assessee is eligible for deduction under section 80P(2)(a)(i) of the Act; however, rent income at ₹ 18,600, commission income at ₹ 13,701, other income ₹ 400 and incometax refund of ₹ 13,271 totalling to ₹ 45,542/- is not eligible for deduction under section 80P(2)(a)(i) of the Act - Decided partly in favour of assessee - ITA No.2073/Ahd/2015 - - - Dated:- 24-9-2015 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o decide the case. 3. Briefly stated the facts of the case are that the assessee filed return of income on 13.9.2012 declaring total income at Rs.NIL. Proceedings u/s 143(3) were initiated and addition of ₹ 12,72,308/- was made on account of inadmissibility u/s 80P for following income : Rent income 18,600 Commission 13,701 Other Income 400 Interest on I.T. fund 13,271 Interest on investment with 12,26,336 Institution other than cooperatives 12,72,308 The AO went ahead to tax this am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supra). Considering the facts and following the ratio laid down by the Hon ble Supreme Court in the case of Totgars(supra), I am of the firm view that the total interest income earned of ₹ 12,22,308/- from institution other than cooperative banks is required to be taxed u/s 56 of the Act. Thus, the addition made by the AO of ₹ 12,22,308/- is hereby held justified and addition is confirmed for the purpose of section 56 of the Act. The relevant ground of appeal is rejected. Aggrieved, assessee is now in appeal before the Tribunal. 4. The ld. DR relied on the orders of lower authorities. The following statement of facts were submitted by the assessee along with the appeal :- M/s Dhanlaxmi Credit Co-Op. Society Ltd. is a Co- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o-op. Urban Thrift and Credit Society, also sought clarification from CBDT regarding admissibility of deduction under Section 80P of Income-Tax Act, 1961. The Central Board of Direct Taxes clarified that Delhi Co-op. Urban Thrift and Credit Society does not fall within the meaning of Co-operative Bank as defined in Part V of the Banking Regulation Act, 1949. Looking to the above facts and circumstances of the case our society is eligible deduction u/s 80P of I.T. Act. The learned Income-tax Officer has disallowed our claim u/s 80P of I.T. Act and learned Commissioner of Income-tax (Appeals) has confirmed the Income-tax Officer s order. The society has interest income received on fixed deposit kept with Nationalized Banks considered as a i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 (1) of the Act. I fact similar view is taken by the Andhra Pradesh High Court in the case of CIT v/s. Andhra Pradesh State Co-operative Bank Ltd., [2011] 200 Taxman 220/12 taxmann.com 66. In that view of the matter, the order passed by the appellate authorities denying t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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