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TMI Blog2019 (1) TMI 1008X X X X Extracts X X X X X X X X Extracts X X X X ..... Two issues are raised in this appeal : (i) Whether the assessee is entitled to deduction u/s. 80P(2) of the I.T.Act. (ii) Whether the interest income, commission from GDCS and processing fee are income from business or income from other sources. 3. At the outset, we find that the issues involved in this appeal are squarely covered in favour of the assessee by the order of the Cochin Bench of the Tribunal, in assessee s own case, in ITA No.152 153/Coch/2018 (order dated 29th August, 2018), wherein identical issues were raised to that of the issues raised in the present appeal. The relevant finding of the Tribunal reads as follow:- 6. We have heard the rival submissions and perused the material on record. We find that similar issues involved in the present appeals came up for adjudication for the immediately preceding year, i.e. for assessment year 2012-2013, in assessee s own case, wherein the Tribunal had decided both the issues in favour of the assessee. The relevant finding of the Tribunal for assessment year 2012-2013, reads as follows:- 5. We have perused the orders and heard the rival submissions. Certificate dated 16-03-2004 issued by the Office of Central ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the business of supplying milk, oilseeds, fruits, or vegetables, as the case may be; or (ii) the Government or a local authority; or (iii) a Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956), or a corporation established by or under a Central, State or Provincial Act (being a company or corporation engaged in supplying milk, oilseeds, fruits or vegetables, as the case may be, to the public), the whole of the amount of profits and gains of such business; (c) in the case of a co-operative society engaged in activities other than those specified in clause (a) or clause (b) (either independently of, or in addition to, all or any of the activities so specified), so much of its profits and gains attributable to such activities as does not exceed,- (i) where such cooperative society is a consumers' co-operative society, one hundred thousand rupees; and (ii) in any other case, fifty thousand rupees. Explanation.-In this clause, consumers' co-operative society means a society for the benefit of the consumers; (d) in respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other co-op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rimary Cooperative Agricultural and Rural Development Bank. Hon ble Karnataka High Court in the case of CIT Vs. Sri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha, Bagalkot, (2014) (369 ITR 86) has clearly held that for a Co-operative Society to be considered as a Co-operative Bank, it was necessary that Reserve Bank of India should have given such a classification to the said Co-operative Society. A similar view was taken by the Hon ble Gujarat High Court in the case of Jafari Momin Vikas Co-op Credit Society Ltd.(2014) (362 ITR 331). In the circumstances, we are of the opinion that section 80P(4) had no application in the case of the assessee. We do not find any reason to interfere with the order of CIT(A) in this regard. Appeal of the Revenue is thus dismissed. 6. In the Cross Objection of the assessee, grievance raised is on the treatment of interest, under the head income from other sources instead of income from business . The Assessing Officer, while doing the assessment, had considered interest earned by the assessee on bank deposits under the head income from other sources . Assessee had earned interest of ₹ 51,93,347/- on bank deposits. Since the above i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f business that the deposits were placed by the as in the Banks. Earning of interest there from, in our opinion, could only be treated as income from its business. It is also interesting to have a look at Circular dated 02/11/2015 (supra) issued by the CBDT which is reproduced hereunder: New Delhi, 2 nd November,2015 Subject: Interest from Non-SLR securities of Banks reg It has been brought to the notice of the Board that in the case of Banks, field officers are taking a view that, expenses relatable to investment in non-SLR securities need to be disallowed u/s. 57(i) of the Act as interest on non-SLR securities is income from other sources. 2. Clause (id) of sub-section(1) of Section 56 of the Act provides that income by way of interest on securities shall be chargeable to income-tax under the head Profits and Gains of Business and Profession . 3. The matter has been examined in light of the judicial decisions on this issue. In the case of CIT vs. Nawanshahar Central Co-operative Bank Ltd. (2007) 160 TAXMANN 48 (SC), the Apex Court held that the investments made by a banking concern are part of the business of banking. Therefore, the income arising from such i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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