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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 ..... 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 iss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of power, of the agricultural produce of its members, or (vi) the collective disposal of the labour of its members, or (vii) fishing or allied activities, that is to say, the catching, curing, processing, preserving, storing or marketing of fish or the purchase of materials and equipment in connection therewith for the purpose of supplying them to its members, the whole of the amount of profits and gains of business attributable to any one or more of such activities : Provided that in the case of a co-operative society falling under sub-clause (vi), or sub-clause (vii), the rules and bye-laws of the society restrict the voting rights to the following classes of its members, namely:- (1) the individuals who contribute their labour or, as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st or dividends derived by the co-operative society from its investments with any other co-operative society, the whole of such income; (e) in respect of any income derived by the cooperative society from the letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities, the whole of such income; (f) in the case of a co-operative society, not being a housing society or an urban consumers' society or a society carrying on transport business or a society engaged in the performance of any manufacturing operations with the aid of power, where the gross total income does not exceed twenty thousand rupees, the amount of any income by way of interest on securities or any income from house property charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be considered as a Cooperative Bank. Nothing was brought on record by the Revenue to show that Reserve Bank of India declared it as a Co-operative Bank. Neither was the assessee a Primary Agricultural Credit Society nor was it a Primary 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 S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion but were deposits for meeting the statutory reserve requirements under section 64 of the Multi State Co-operative Societies Act, 2002. The Ld. AR also placed reliance on Board Circular No. 18/2015 in F.1279/Misc./140/2015/ITJ dated 02/11/2015. As per the Ld. AR by virtue of the judgment of the Hon'ble Apex Court in the case of Nawanshahar Central Co-operative Bank Ltd. (2007) 160 Taxman 48 the interest income would be considered only under the head of 'business'. 8. We have perused the orders and heard the rival submissions. It has not been disputed that interest income earned by the assessee were from deposits placed by it in Banks. Contention of the assessee is that such interest should be considered only as part of its business ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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 investments is attributable to the business of banking falling under the head "Profits and Gains of Business and Profession". 3.2 Even though the abovementioned decision was in the context of cooperative societies/Banks claimi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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