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TMI Blog2016 (3) TMI 1113X X X X Extracts X X X X X X X X Extracts X X X X ..... on the business of banking and therefore it was liable to be deducted in terms of Section 80P(1) of the Act. See Tumkur Merchants Souharda Credit Cooperative Ltd [2015 (2) TMI 995 - KARNATAKA HIGH COURT] - Decided in favour of assessee - ITA No. 347/Ahd/2014 - - - Dated:- 31-3-2016 - SHRI SHAILENDRA K. YADAV, JUDICIAL MEMBER AND SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER Assessee by : Shri M.K. Patel, AR Revenue by : Shri R.I Patel, CIT-DR O R D E R PER SHAILENDRA K. YADAV, JUDICIAL MEMBER: This appeal by the assessee is directed against the order of the Commissioner of Income-Tax, Ahmedabad-1, Ahmedabad, dated 28.11.2013 for Assessment Year 2010-11, on the following grounds:- (1) That on facts, and in law, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is not a co-operative society and he accordingly held that assessee was not eligible to claim deduction u/s 80P on interest of ₹ 42,14,854/- received from SBI. The CIT issued a show-caused notice to the assessee and having considered the contentions on behalf of the assessee, the CIT in concluding paragraph of his order held as under:- 8. Considering the above facts and findings, it is amply clear that the AO has erred in treating the interest income derived by the assessee from SBI as deductible u/s 80P(2) in contravention of the provisions of section 80P(2)(d), which are applicable to all co-operative societies. As a result thereof, there was substantial loss of revenue to the exchequer since the interest income of ₹ 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nking 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. [Para 8] 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 Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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