9911796707
TMI Blog2021 (12) TMI 1259X X X X Extracts X X X X X X X X Extracts X X X X ..... ion that the interest so earned should be taxed as income from other sources There is a cleavage of judicial opinion among several High Courts on the issue of eligibility of this kind of income for exemption u/s. 80P(2)(a)(i) of the Act. The Hon ble Punjab Haryana High Court in the case of CIT vs. Punjab State Cooperative Federation of Housing Building Societies Ltd. [ 2016 (12) TMI 560 - PUNJAB AND HARYANA HIGH COURT] took a view that the income arising on the surplus invested in short term deposits and securities cannot be attributed to the activities of the society and, therefore, not eligible for exemption u/s.80P(2)(a)(i) of the Act. However, the Hon ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Coo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. This ground is also allowed. - ITA No.1700/PUN/2017 - - - Dated:- 27-12-2021 - Shri Inturi Rama Rao, Accountant Member And Shri S.S. Viswanethra Ravi, Judicial Member For the Assessee : Shri Sanket Joshi, Shri Bhushan Daga Shri Shakarlal Meena For the Revenue : Shri Mahesh Jasnani ORDER PER INTURI RAMA RAO, AM : This is an appeal filed by the assessee directed against the order of ld. Commissioner of Income Tax (Appeals)-1, Nashik ( CIT(A) for short) dated 01.05.2017 for the assessment year 2013-14. 2. Briefly, the facts of the case are that the appellant is a cooperative society registered under the Maharashtra Co-operative Societies Act, 1960. It is engaged in the business of provid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowance of expenses pertaining to MSEB Commission Income (without allowing deduction u/s.80P(2) on the enhanced amount of business income). 1,115 6 Disallowance u/s.14A (without allowing deduction u/s.80P(2) on the enhanced amount of business income). 9,713 Total Additions 44,01,002 3. Being aggrieved by the above additions, an appeal was preferred before the CIT(A). 4. The CIT(A) during the course of proceedings before him held that the appellant society is a Cooperative bank and, therefore, hit by the provisions of sub-section (4) of section 80P, accordingly, denied the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the appellant society was not granted licence to carry on the business of banking by RBI. It is a Cooperative society registered under the Maharashtra Cooperative Societies Act,1960. Placing reliance on the recent decision of Hon ble Supreme Court in the case of The Mavilayi Service Co-Operative Bank Ltd. and Another Vs. CIT (2021) 431 ITR 01 submitted that the AO cannot go beyond the registration certificate granted under the Cooperative Societies and therefore, the provisions of section 80P have no application. 8. On the other hand, the ld. DR placing reliance on the orders of the lower authorities held that the interest earned on investment made in Bank of Baroda are not eligible for exemption u/s.80P(2) of the Act as it is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pment Bank Ltd. 389 ITR 68 and the Hon ble Kolkata High Court in the case of CIT Vs. Southern Eastern Employees Cooperative Credit Society Ltd. 390 ITR 524 took a view that the income arising on the surplus invested in short term deposits and securities cannot be attributed to the activities of the society and, therefore, not eligible for exemption u/s.80P(2)(a)(i) of the Act. However, the Hon ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. Vs. ITO (2015) 230 taxmann 309 (Kar.) and the Hon ble Telangana and Hon ble Andhra Pradesh High Court in the case of Vaveru Co-operative Rural Bank Ltd. v CIT [(2017) 396 ITR took a view that such interest income is attributable to the activities of the so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so increased shall equally qualify for exemption u/s.80P(2)(a)(i) of the Act. Accordingly, we hold that the enhanced income on account of disallowances made by the AO should qualify for exemption 80P(2)(a)(i) of the Act. Thus, the grounds of appeal No. 5 to 10 stands allowed. 12. Ground of appeal No.11 challenges the decision of the CIT(A) holding that the appellant society is not eligible for exemption u/s. 80P(2)(a)(i) of the Act on the ground that the money is also lent to the nominal members and extraordinary members who are not members of the cooperative society. Therefore, the question that comes up for consideration is whether the nominal members are also the members of the Cooperative societies or not. The term members is no ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
