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TMI Blog2012 (2) TMI 689X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the Tribunal. This assertion of the learned counsel for the assessee was not controverted by the Revenue. 3. We have considered the rival submissions and perused the material available on file. We find that the impugned issue is also covered by the latest decision of this Tribunal (in the case of the assessee) in ITA No.54/Ind/2011 (A.Y. 2007-08), order dated 4.11.2011, wherein, the order for assessment year 2003-04 has also been considered. In view of the above assertion/admission, we are reproducing hereunder the relevant portion of the order dated 4.11.2011 (supra): This is an appeal by the Revenue challenging the order dated 12.1.2011 of the learned Commissioner of Income Tax (Appeals) on the ground that on the facts and in the circumstances of the case, the ld. first appellate authority erred in deleting the addition of ₹ 14,66,113/- made by the Assessing Officer to the income of the assessee as it is not covered u/s 80P(2)(a)(i) of the I.T. Act, 1961. 2. During hearing of this appeal, we have heard Shri Arun Dewan, learned Sr. DR and Shri S.S. Deshpande, learned counsel for the assessee. At the outset, the learned cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncentive from UTI and income from Guest House of ₹ 11,783/-. 6. The ld. Authorized Representative relied on various decisions of Supreme Court and High Courts and also the decision of I.T.A.T. , Indore Bench. He pleaded that I.T.A.T. Indore Bench in I.T.A.Nos. 394/Ind/2000 and 3/Ind/2003 in the case of Jt. CIT vs. Indore Paraspar Sahkari Bank order dated 23.1.2003, the I.T.A.T. has held as under :- 4.4 We have considered the arguments advanced by the parties in view of the material available on record and have gone through the order impugned as well as the judgments relied on by the ld. Authorized Representative. In the case of CIT v. Karnataka State Co.op. Apex Bank (supra) the Hon'ble Supreme Court was pleased to hold that the interest arising from the investment made in compliance with statutory provisions to enable it to carry on banking business out of reserve fund by a cooperative society engaged in banking business is exempt u/s 80P(2)(a)(i) of the Income-tax Act, 1961. The placement of such funds being imperative for the purpose of carrying on banking business, the income therefrom would be income from the assessee s business. Ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... )(i) of the Act. It was not in dispute that the assessee was carrying on the business of banking. Under these circumstances, the provisions of clause (f) of section 80P(2) could not control the benefit of exemption extended to the assessee from payment of tax. The assessee was entitled to exemption in respect of the rental income received by it. He also relied on the decision of Hon ble Bombay High Court in the case of CIT vs. Ahmednagar District Central Co-Op. Bank Limited Others, (2003) 264 ITR 38 (Bom), where the Hon ble High Court has held that income by way of commission from M.S.E.B. and M.P.C.S. was attributable to the business of Banking as the relief u/s 80-P(1) read with section 80-P(2)(a)(i) of the Income-tax Act, 1961, was allowable to the assessee. He pleaded that the Hon ble Apex Court in the case of Cambay Electric Supply Co.Ltd. vs. CIT, 113 ITR 84, has held that expression attributed has to be given a very wide meaning. Therefore, the interest earned on FDR etc. qualify for special deduction u/s 80P(2) of the Income-tax Act, 1961. The amount of ₹ 20,43,750/- is interest on the FDR in Banks, interest on deposits with UTI, interest on SB A/c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. Regarding miscellaneous income, income from guest house, we also hold that this income also qualify for deduction u/s 80-P(2)(a)(i), in view of the decision of Hon ble Karnataka High Court in the case of CIT vs. Grain Merchants Co-Op. Bank Limited (supra), where the Hon ble High Court has held that from letting out a part of the property was treated as income from Banking business and held to be qualified for deduction u/s 80- P(2)(a)(i). We also get strength on this issue from the decision of Hon ble Bombay High Court in the case of CIT vs. Ahmednagar District Central Co-Op. Bank Limited Others, ( cited supra), where the Hon ble High Court has held that the commission collected from electricity bills was held tobe income qualifying for deduction u/s 80- P(2)(a)(i). 10. The incentive from U.T.I. of ₹ 40,000/- shall not qualify for the deduction u/s 80-P as it is not in any way attributable to the business of assessee. 11. In view of these facts, we direct the A.O. to allow the deduction u/s 80-P(2)(a)(i) of the Income-tax Act, 1961, as directed above. 12. In the result, the appeal of the assessee is partly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ka State Co-operative Apex Bank (supra) have already been discussed wherein identical ratio was laid down. The decision in Gorakhpur Kshetriya Gramin Bank (292 ITR 205) (All) also held identically. Therefore, respectfully following the same, we do not find any infirmity in the order of the ld. CIT(A) especially when the interest income on fixed deposits and saving bank account is very much part of banking activity/business of the assessee. The ratio laid down in the case of CIT vs. Ratnagiri District Central Co-operative Bank Ltd. (254 ITR 697) (Bom) further supports the case of the assessee. Exemption of interest income will be available only if it has arisen in the course of business of banking and not otherwise as was held by the Hon'ble Andhra Pradesh High Court in the case of A.P. Cooperative Central Land Mortgage Bank Ltd. vs. CIT (100 ITR 472). In view of these facts and the judicial pronouncements discussed hereinabove and especially when no contrary decision was brought to our notice by either side and also the ld. Representatives from both sides consented that the facts are identical to assessment year 2007- 08, therefore, by following the aforesaid decision, we affir ..... X X X X Extracts X X X X X X X X Extracts X X X X
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