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TMI Blog2014 (4) TMI 1172X X X X Extracts X X X X X X X X Extracts X X X X ..... etting out of the property cannot partake the character of profit and gains attributable to an activity carried out by the assessee society, therefore, not entitled for exemption u/s 80P(2)(c) of the Act. Thus Letting out of the property and receipt of rental income is not an activity referred to in section 80P(2)(c) of the Act, therefore, not entitled for deduction u/s 80P(2)(c) of the Act. - Decided against assessee - I.T.A No. 09/Coch/2014 - - - Dated:- 25-4-2014 - Shri N.R.S. Ganesan (JM) and Shri B.R. Baskaran(AM) For The Appellant : Shri Abraham K Thomas For The Respondent : Shri K.K. John ORDER Per N.R.S. Ganesan (JM) This appeal of the assessee is directed against the order of CIT(A)- V, Kochi dated 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ri K.K. John, the ld.DR submitted that the activity referred to in section 80P(2)(c) is only confined to business activity other than those mentioned in sub clauses (a) or (b) of section 80P(2)(c) of the Act. According to the ld.DR section 80P(2)(c) does not refer to letting out of the property and receipt of rental income which has to be classified as income from house property. Therefore, according to the ld.DR, the assessing officer has rightly rejected the claim of the assessee. 5. We have considered the rival submissions on either side and also perused the material available on record. Admittedly, the assessee returned income from business and income from house property. In respect of income from business the assessing officer allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... found that the shop constructed by the assessee society was let out on leave and licence basis to help the maintenance of the society. The Bombay High Court found that the income derived by the assessee society from letting out of the shop was exempt u/s 80P(2)(c) of the Act. In fact, the Bombay High Court placed its reliance on the judgment of the Gauhati High Court in The Industrial Cooperative Bank Ltd (supra). We also find that the revenue carried the matter before the Apex Court by way of Special Leave Petition against the judgment of the Gauhati High Court in The Industrial Co-operative Bank Ltd (supra). However, the Apex Court dismissed the Special Leave Petition on the ground of delay in filing the Special Leave Petition. The Apex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome, the income thus received cannot partake of the character of profits and gains attributable to an activity carried on by the society. The building let out is not a commercial asset or the rent received is not profit or gain arising from the exploitation of a business asset. The word activity is wider than the word business . It connotes a specified form of supervised action or field of action. Read in the context of the profit-earning activity of a co-operative society, it means the corporate activity of the society, that is to say, the combination of operations undertaken by the co-operative society whether or not they amount to a business, trade or profession in the ordinary sense. Clause (c) of section 80P(2) is intended to cover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purpose And Transport Co-operative Society Ltd (supra) held that letting out of the property and receipt of rental income is not an activity referred to in section 80P(2)(c) of the Act, therefore, not entitled for deduction u/s 80P(2)(c) of the Act. This Bench of this Tribunal is under the territorial jurisdiction of the Kerala High Court. Hence, the judgments of the Kerala High Court are binding on this Tribunal rather the judgments of other High Courts. The other High Court judgments may have a persuasive value; however, the judgment of the jurisdictional High Court is binding on this Tribunal. In the absence of any Apex Court judgment, this Tribunal is of the considered opinion that the Kerala High Court judgment needs to be followed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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