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TMI Blog2020 (3) TMI 1111X X X X Extracts X X X X X X X X Extracts X X X X ..... 143 (3) of the Income Tax Act for assessment year 2014 - 15 was challenged and appeal of the assessee was dismissed. 2. The assessee has raised the following grounds of appeal:- "1. That in view of the facts and circumstances of the case, the impugned order passed and the addition/ disallowances made by the AO and upheld by CIT(A) in the case of the assessee appellant are illegal, bad in law and without jurisdiction. 2. That in view of the facts and circumstances of the case, the CIT(A) has erred in law and on facts in upholding the disallowance of the deduction u/s 80P of the Income Tax Act, 1961 claimed by the appellant assessee. 3. That in view of the facts and circumstances of the case, the CIT(A) has erred in law and on facts i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0P of the Income Tax Act and therefore the return of income filed by the assessee is Nil. The AO questioned the allowability of deduction under section 80P on interest on fixed deposit receipts and interest on savings bank accounts as according to him same is not deductible under that section. Assessee submitted that looking to the nature of the business activities the assessee is eligible for deduction of interest on fixed deposit receipts and savings bank account as the main object of the assessee is to accept deposits from its members and providing credit facilities to its member. The assessee further relied upon the several judicial precedents. The learned Assessing Officer rejected the contention of the assessee and stated that assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvolved in this appeal is whether the assessee being a co-operative society is eligible for deduction under section 80P of the Income Tax Act with respect to the income earned by the assessee on bank interest on fixed deposit receipts and savings bank accounts. The above issue is covered by the decision of the Hon'ble Supreme Court in case of Totgar's Co-operative Sale Society Ltd. v. ITO [2010] 322 ITR 283 (SC) wherein it has been considered and held that assessee is not eligible for deduction under section 80P of the Act on the bank interest received on fixed deposit receipts and savings bank accounts. The Hon'ble Court held as under:- "10. At the outset, an important circumstance needs to be highlighted. In the present case, the intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore specified activities, then such income shall be deducted from the gross total income in computing the total taxable income of the assessee-society. An income, which is attributable to any of the specified activities in section 80P(2) of the Act, would be eligible for deduction. The word "income" has been defined under section 2(24)(i) of the Act to include profits and gains. This sub-section is an inclusive provision. Parliament has included specifically "business profits" into the definition of the word "income". Therefore, we are required to give a precise meaning to the words "profits and gains of business" mentioned in section 80P(2) of the Act. In the present case, as stated above, the assessee-society regularly invests funds not i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the facts and circumstances of this case, we are of the view that the Assessing Officer was right in taxing the interest income, indicated above, under section 56 of the Act. 11. An alternative submission was advanced by the assessee(s) stating that, if interest income in question is held to be covered by section 56 of the Act, even then, the assessee-society is entitled to the benefit of section 80P(2)(a)(i) of the Act in respect of such interest income. We find no merit in this submission. Section 80P(2)(a)(i) of the Act cannot be placed at par with Explanation (baa) to section 80HHC, section 80HHD(3) and section 80HHE(5) of the Act. Each of the said sections has to be interpreted in the context of its subject-matter. For example, sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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