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TMI Blog2016 (5) TMI 1153X X X X Extracts X X X X X X X X Extracts X X X X ..... est earned from employees cannot be said to be core activity of the society and, therefore, in our opinion, interest earned from employees is not eligible for deduction u/s 80P(2)(a)(i) - Decided against assessee - ITA No. 17 of 2016 (O&M) - - - Dated:- 10-5-2016 - MR. AJAY KUMAR MITTAL AND MRS. JUSTICE RAJ RAHUL GARG., JJ. For The Appellant : Mr. M.R. Sharma, Advocate AJAY KUMAR MITTAL, J. 1. This appeal has been filed by the assessee under Section 260A of the Income Tax Act, 1961 (in short the Act ) against the order dated 28.4.2015 (Annexure A-3) passed by the Income Tax Appellate Tribunal, Chandigarh Bench B , Chandigarh (hereinafter referred to as the Tribunal ) in ITA Nos. 847/Chd/2013 and 810/Chd/2013 for the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n upholding the order of the Assessing Officer and reversing the order of the Commissioner of Income Tax (Appeals) and also not following its own earlier decision is perverse more so when the earlier order of the Tribunal was a reasoned order and has not been even distinguished? vi) Whether on the facts and in the circumstances of the case the Learned Income Tax Appellate Tribunal was right in law in holding that the income by way of interest on loans advanced to its employees and the deposits held with schedule banks was chargeable to tax u/s 56 under the head income from other sources without allowing any deduction in respect of cost of funds and proportionate administrative and other expenses u/s 57? 2. Put shortly, the facts neces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,19,241/- under Section 80P(2)(a)(i) of the Act being amount of interest received by the assessee on various loans advanced to its employees as a condition of service of its employees holding the income as 'income from other sources' and not 'income from business'. Hence, the present appeal by the assessee. 3. We have heard learned counsel for the appellant-assessee. 4. The assessee has filed one appeal against the consolidated order dated 28.4.2015 (Annexure A-3) passed by the Tribunal where the appeal of the assessee was dismissed and that of the revenue was allowed. 5. Question No. (i) being general in nature cannot be termed to be substantial question of law. 6. Question No. (ii) relating to deduction under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant observations of the Tribunal read thus:- 17. After considering the rival submissions we find that the Hon'ble Supreme Court has clearly held that deduction u/s 80P(2)(a)(i) of the Act is available only in respect of core activities of the Society and interest earned from other banks cannot be said to be the core activity. In fact, in this regard it has been observed as under:- The interest income arising to a co-operative 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 shortterm deposits and securities, has to be taxed as income from other source ..... X X X X Extracts X X X X X X X X Extracts X X X X
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