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TMI Blog2018 (5) TMI 1545X X X X Extracts X X X X X X X X Extracts X X X X ..... of its business of providing credit facilities to its members - in the interest of justice and equity, the matter is restored to the A.O. for fresh consideration - appeal allowed for statistical purposes. - ITA No.98/Coch/2018, ITA No.99/Coch/2018 And ITA No.100/Coch/2018 - - - Dated:- 25-5-2018 - Shri Chandra Poojari, AM And Shri George George K, JM For The Appellant : Sri. Santhosh P.Abraham, Advocate For The Respondent : Sri.A.Dhanaraj, Sr.DR ORDER Per George George K., JM These appeals at the instance of the assessee are directed against two orders of the CIT(A), both dated 23.02.2018. The relevant assessment years are 2010-2011, 2011-2012 and 2014-2015. The issues raised in these appeals are common ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 490 (Ker.)] directed the Assessing to grant the benefit of deduction u/s 80P(2) of the I.T.Act, for the assessment years 2010-2011, 2011-2012 and 2014-2015. As regards interest received on investments made with sub-treasuries and co-operative banks, the CIT(A) confirmed the view taken by the Assessing Officer. The CIT(A) also rejected the alternative plea of the assessee that deduction u/s 80P(2)(d) to be granted with regard to the interest received on investments made with subtreasuries and co-operative banks. 4. Aggrieved by the orders of the CIT(A) by treating the interest received on investments with sub-treasuries and cooperative banks as taxable income, the assessee has preferred the present appeals before the Tribunal. For all t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... embers of the society with marginal rate of interest. The balance of deposit amount shall be deposited with the apex bank like District Co-operative Bank, Kollam, with half percentage low interest rate when being paid to fixed depositors of the society. Hence interest received or due from apex bank (Kollam District Co-operative Bank) is a liability or expense of the society. Where there is no role and chance for under the head of income from other sources. So also the interest received from the Government Treasury. For the reasons stated in the above and also the grounds urged at the time of final hearing, it is just and necessary to set aside the Annexure A1 Assessment Order as well as Annexure A3 Order in Appeal to the extent of obj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... os.A, B C raised in these appeals are rejected. 8. Now let us examine whether the interest income received is to be allowed as deduction u/s 80P(2)(a)(i) of the I.T.Act. Section 80P(2)(a)(i) states that any income that arises to the assessee while carrying out the business of banking or credit facilities to its members, is entitled to deduction of such income. In order to get the benefit of section 80P(2)(a)(i), the assessee has to prove that the investments with subtreasuries and co-operative banks are done in the normal course of its business of providing credit facilities to its members. The Assessing Officer had relied on the Tribunal order in the case of M/s.Mutholy SCB Ltd. v. ITO [ITA No.11/Coch/2014 order dated 24.09.2014] . T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts members in the course of its business had made investments of surplus funds with sub-treasuries /co-operative banks and earned interest income, such interest income was entitled to deduction u/s 80P(2)(a)(i) of the I.T.Act. Since, neither the CIT(A) nor the A.O. had the benefit of these orders of the Tribunal, in the interest of justice and equity, we restore the matter to the A.O. for fresh consideration. The A.O. shall examine whether the assessee-society had made investments with sub-treasuries and other co-operative banks in the course of carrying out its business of providing credit facilities to its members. The A.O. shall take into consideration the dictum laid down in the orders of the Tribunal in the case of The Padne SCB Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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