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TMI Blog2023 (4) TMI 481X X X X Extracts X X X X X X X X Extracts X X X X ..... admittedly the income that the petitioners derived from the activities listed in sub-clauses (i) to (vii) of clause (a), then the character of such income may not be lost, especially when the statute uses the expression attributable to and not any one of the two expressions, namely, derived from or directly attributable to . It, therefore, goes without saying that the interest credited by the Andhra Bank and the Indian Bank to the account of the assessee on the credit balances does not lose its character as the income derived from the activities of the assessee covered by 80P(2)(a)(i) - thus disallowed interest in this matter, as a matter of fact is eligible for deduction under section 80P(2)(a)(i) - AO will accordingly delete the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent the business transactions and, therefore, the interest accrued thereon will also partake the same character, inasmuch as its not the surplus amount that was invested for earning the income, but such credit balances are bound to arise due to the business transactions. 4. Learned Assessing Officer did not agree with the contentions of the assessee but opined that any interest income arising from deposit/investment of funds in banks is in the nature of income from other sources taxable under section 56 of the Act, and cannot be categorized as income from the profits and gains of business of the assessee. He thereby brought the said interest income to tax for all the three years under section 56 of the Act. learned Assessing Officer plac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons made on either side. Facts are not in dispute. The decision of the Hon ble Apex Court in the case of Totgars Co-operative Sale Society Ltd. (supra), is explained by the Hon ble jurisdictional High Court in the case of The Vavveru Co-operative Rural Bank Ltd. vs. CCIT (2017) [396 ITR 371] (AP), while dealing with the allowability of the interest derived by co-operative societies from out of the investments if any, made. The Hon ble court observed that, the case before the Supreme Court in Totgar's Co-operative Sale Society Ltd.'s case (supra) was in respect of a co-operative credit society, which was also marketing the agricultural produce of its members. As seen from the facts disclosed in the decision of the Karnataka High Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (i) to (vii) of clause (a), then the character of such income may not be lost, especially when the statute uses the expression attributable to and not any one of the two expressions, namely, derived from or directly attributable to . 10. It, therefore, goes without saying that the interest credited by the Andhra Bank and the Indian Bank to the account of the assessee on the credit balances does not lose its character as the income derived from the activities of the assessee covered by 80P(2)(a)(i) of the Act. I, therefore, am of the opinion that the disallowed interest in this matter, as a matter of fact is eligible for deduction under section 80P(2)(a)(i) of the Act. Learned Assessing Officer will accordingly delete the disallowa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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