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TMI Blog2018 (4) TMI 446X X X X Extracts X X X X X X X X Extracts X X X X ..... ey 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. The order passed by the appellate authorities denying the benefit of deduction of the aforesaid amount is unsustainable in law. Accordingly it is hereby set aside. - Decided in favour of assessee. - I.T.A. No. 412/Mum/2018 - - - Dated:- 3-4-2018 - Shri B.R. Baskaran (AM) And Sandeep Gosain (JM) For The Assessee : Shri V.G. Ginde For The Department : Shri N. Hemalatha ORDER Per B.R. Baskaran (AM) :- The appeal filed by the assessee is directed against the order dated 18.10.2017 passed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is regard, the learned CIT(A) followed the order passed by the Coordinate Bench in the case of Shri Saidatta Cooperative Credit Society Ltd. Vs. ITO in ITA No. 2379/Mum/2015 dated 15.1.2016. Accordingly, he sustained the assessment of ₹ 23.32 lakhs, being interest income earned by the assessee from fixed deposits kept with co-operative banks. Aggrieved, the assessee has filed this appeal before us. 4. Learned AR placed his reliance on the decision dated 10.8.2015 rendered by SMC Bench of the Tribunal in the case of Jaoli Taluk Sahakari Patpedhi Maryadit Vs. ITO (2017) 83 taxmann.com 247 and submitted that an identical issue was considered in the above said case, wherein the Tribunal has placed reliance on the decision rendered by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee by considering the decision rendered by Hon'ble Supreme Court in the case of Todgars Cooperative Sale Society Ltd. (supra). However, we noticed that Hon'ble Karnataka High Court has also considered the decision of Todgars Cooperative Sale Society Ltd. (supra) in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. (supra) and held that interest income is attributable to carrying on the business of the assessee and therefore it is liable to be deducted u/s. 80P(2)(a)(i) of the Act. The SMC Bench of the Tribunal in the case of Jaoli Taluk Sahakari Patpedhi Maryadit (supra) has followed the decision rendered by Hon'ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. (supra). Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es to its members. The interest income so derived or the capital, if not immediately required to be lent to the members, they cannot keep the said amount idle. If they deposit this amount in bank so as to earn interest, the said interest income is attributable to the profits and gains of the business of providing credit facilities to its members only. The society is not carrying on any separate business for earning such interest income. The income so derived is the amount of profits and gains of business attributable to the activity of carrying on the business of banking 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. 9. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. In fact similar view is taken by the Andhra Pradesh High Court in the case of CIT v. Andhra Pradesh State co-operative Bank Ltd., [2011] 200 Taxman 220/12 taxmann.com66. In that view of the matter, the order passed by the appellate authorities denying the benefit of deduction of the aforesaid amount is unsustainable in law. Accordingly it is hereby set aside. The substan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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