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TMI Blog2017 (3) TMI 1746X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) TMI 3 - SUPREME COURT] wherein it was held that the interest received by a co-operative society from investment of its surplus funds is assessable under the head “income from other sources” and deduction u/s 80P is not available in respect of such interest and dividend income. Therefore in the present case the disallowance of deduction u/s 80P was rightly upheld to that extent. Commission Income - assessment as ‘Business Income’- HELD THAT:- We find that the revenue has not carried out the required verification and the CIT(A) has only mentioned that these income are credited to the profit and loss account of the assessee and it is not connected with the banking/credit giving facilities business, therefore in these circumstances we set aside these grounds to the file of the AO for carrying out detail verification of these grounds. It is needless to mention that Assessing Officer would provide reasonable opportunity of being heard to the assessee. Therefore, these grounds are allowed for statistical purposes. - I.T.A. No. 5819, 5217/Mum/2014 (Assessment Year: 2010-11) - - - Dated:- 17-3-2017 - Shri R. C. Sharma And Shri Sandeep Gosain, JJ. Appellant by: Shri Malay M. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inition given in the Banking Regulation Act. 6. On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in holding that the ratio of the case laws rellied upon by the A.O. especially decision of ITAT, Jaipur in the case of Kekri Sahakari Bhumi Vikas Bank Ltd. and Cochin ITAT in the case of Kerala State Co-op. Agricultural Rural Development Bank Ltd are not applicable in the case of the assessee. 7. On the facts and circumstances of the case and in law, the Ld.CIT(A) has erred in not appreciating his own order in the case of Vishal Janseva Sahkari Patsantha Ltd. for A.Y.2008-09 on the same issue vide order No.ClT(A)-26/IT-30/15(3)(3)/10-11 dt. 0 July 2012. 8. The appellant craves leave, add, amend, alter or vary any of the grounds appeal at the time and/or before the hearing of the appeal. 3. The brief facts of the case are that the assessee is a Credit Cooperative Society and filed its return of income on 03.09.10 declaring total income at Rs. NIL after claiming deduction u/s 80P of the I.T. Act. The case was selected for scrutiny and after serving statutory notice, the AO passed assessment order thereby holding that the status of assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excepted under sec.80P(4) of the Act and the assessee has failed to demonstrate that its principal business consisted: of. providing financial accommodation to its members for agricultural purposes or for purposes connected with agricultural activities for claiming deduction u/s.80P(2)(a)(i) of the Act. It is also held therein that requirement of transacting banking business is not a prerequisite for a Central or a State co-operative bank. In the instant case, the assessee has not claimed itself to be a Primary Co-operative Agricultural and Rural Development Bank. Rather, it is a co-operative society constituting of members being the residents of the territory of Navi Mumbai. The objects of the assessee include acceptance of deposits and granting of loans to members together with other activities but do not include banking. Moreover, the assessee has not granted any loan to or accepted a deposit from a person who is not a member. Therefore, the decision of the Jaipur ITAT in Kekri Sahakari Bhoomi Vikas Bank Ltd., cannot be applied on the facts of this case. Apart from the above Ld. CIT(A) has also discussed in detail at para no. 3.2.15 to 3.2.19 and also while deciding the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 33,168/- earned from deposit kept with MSEB as not its Business Income. 5. On the facts and in the circumstances of the case and in law the Ld. CIT (A) has erred in holding income of Rs, 5,43,356/- earned from MSE.B as per 26AS to be different then the income under this head already declared by the appellant. 6. The appellant craves leave to amend, alter, delete or add any of the above grounds of appeal. Ground No. 1 2. 13. Since both the grounds raised by the assessee are inter-connected and inter-related therefore we thought it fit to dispose off the same through the present common order. 14. We have heard the counsels for both the parties and we have also perused the material placed on record as well as the orders passed by the revenue authorities. After considering the facts of the case, we found that the Ld. CIT(A) while dealing with the said ground has categorically mentioned the facts of the case and had given the findings in para no. 4.1, 4.1.1 4.1.2 in its order and the same is reproduced below:- 4.1 The Income Expenditure account of the appellant has been examined. As per the account, the assessee has received interest on FDs ₹ 41,50,854/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore after going through the Balance sheet, we find that the accrued interest as on 31.3.2010 is ₹ 21,39,846/- and the interest on FDs accrued during the year is only ₹ 41,50,846/- as per the Income expenditure account. Thus Ld. CIT(A) has rightly conclude that the interest has been received either from a Scheduled bank or Co-operative Bank and no interest income has been received by the assessee from its investment in a co-operative society. The Ld. CIT(A) has rightly followed the mandate given by Hon ble Supreme Court in case of The Totgars Co-operative Sale Society Ltd. (2010) 229 CTR (SC)209 wherein it was held that the interest received by a co-operative society from investment of its surplus funds is assessable under the head income from other sources and deduction u/s 80P is not available in respect of such interest and dividend income. Therefore in the present case the disallowance of deduction u/s 80P was rightly upheld to that extent. No new facts or contrary judgments have been brought on record before us by the learned DR in order to controvert or rebut the findings recorded by the learned CIT (A) on the basis of the remand report. Moreover, there is n ..... 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