9911796707
TMI Blog2016 (4) TMI 1367X X X X Extracts X X X X X X X X Extracts X X X X ..... se for the assessment year 2007-08 is of no detriment to the assessee for the year presently under consideration. Action of the AO, as confirmed by the CIT(A), in denying the deduction claimed and allowable u/s 80P(2)(a)(i) of the Act in respect of interest of 8,52,314/- earned from the banks, is erroneous. The same is reversed. The claim is allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Supreme Curt in the case of Totgars Co-operative Sale Society Ltd. vs. ITO 322 ITR 283, I have no hesitation in holding that the interest income of the nature as is added to the total income is taxable in the hands of the assessee." 5. Thus, the ld. CIT(A) has held the facts of the present case to be covered by the decision of the Hon'ble Supreme Court in the case of 'Totgars Co-operative Sale Society Ltd. vs. ITO', 322 ITR 283 (SC). The assessee has challenged this action of the ld. CIT(A) before this Bench. 6. The ld. counsel for the assessee has contended that 'Totgars Cooperative Sale Society Ltd. vs. ITO' (supra) stands considered in 'Tumkur Merchants Souharda Credit Co-operative Ltd.', 55 Taxman .Com. 447 (Karnataka) (cop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding 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 vs. Andhra Pradesh State Co-operative Bank Ltd., [2011] 200 Taxman 220/12 taxmann. Com 66. 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 substantial question of law is answered in favour of the assessee and against the revenue." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the society. 5. To purchase or hire vehicle or delivery vans for transport of goods from one place to another." 10. Therefore, like in 'Tumkur Merchants Souharda Credit Cooperative Ltd.' (supra), the amount invested by the assessee Society in banks to earn interest, was not due to any of its members. It was not a liability of the assessee Society, nor was it shown as such in their account. The assessee-Society, as noted by the AO in the assessment order itself and reiterated by the ld. CIT(A) in para-11 of the impugned order, is carrying on the business of providing credit facilities to its members. It earns profits and gains of business by providing said credit facilities to its members. The interest income so derived, or the cap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction of denying the benefit of deduction. No decision to the contrary has been brought to our notice. 11. Accordingly, the ld. CIT(A) has clearly erred in relying on 'Totgars Co-operative Sale Society Ltd.' (supra). 12. Apropos the order of the ITAT, Amritsar Bench, in the assessee's own case for the assessment year 2007-08, therein the facts were entirely different in as much as for that year, a categorical finding of the ITAT was that the assessee, despite being queried as to whether there was anything on record to establish that the assessee was carrying on the business of banking or providing credit facilities to its members, the assessee could not establish such fact with the help of any documentary evidence, or otherwise. For the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
