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TMI Blog2024 (7) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... tter back to the file of Ld. AO with a direction to deal with these two bullet issues (1) proportionate deduction of management expense interest paid against the gross interest earned and (2) deduction of interest u/s 80P(2)(d) of the Act and decide the same in accordance with law in the light of judicial precedents referred herein above. Needless to state that the appellant shall be given three effective opportunities of being heard in each these cases separately. Ground stands allowed for statistical purposes. - Hon ble Shri G. D. Padmahshali, Accountant Member And Shri Subhash Malguria, Judicial Member For the Assessee : Mr KR Rastogi [ Ld. AR ] For the Revenue : Mr SK Sharma [ Ld. DR ] ORDER PER G. D. PADMAHSHALI, AM; These twin appea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to interest income claimed to have earned by the assessee society from its investment with banks. 3.3 Aggrieved by the denials, the assessee carried the matters in separate appeal u/s 246A(1) of the Act before the first appellate authority unsuccessfully. 3.4 Further aggrieved by the adjudication of Ld. NFAC, the assessee instituted instant twin appeals u/s 253(1)(a) of the Act on as many as ten argumentative grounds, the reproduction of which deemed unnecessary in view of rule 8 of ITAT-Rules, 1963. However, it suffices to state that these grounds common to both the appeals under adjudication solitarily directed against (1) proportionate deduction of management expenses and interest expense from the gross interest earned by the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before Hon'ble Allahabad, the orders of the Tribunal were reversed and Hon'ble High Court decided the issue in favour of the Revenue after relying on the judgment of Hon'ble Supreme Court in the case of Totgars Co-operative Sale Society Limited (supra). The assessee filed appeals before Hon'ble Supreme Court and Hon'ble Supreme Court set aside the order of Hon'ble Allahabad High Court by holding as under: Having heard learned counsel for the parties, we are inclined to remit the matters to the Income Tax Appellate Tribunal to decide afresh the appeals relating to the assessment years in question. We have passed the order in view of lack of clarity on facts and the exemption clause under sub-section 2 to Section 80P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g applications are disposed of. 7.1 Now the parties are again before us. We find that assessees had earned interest from fixed deposits from bank and co-operative societies. Hon'ble Supreme Court, after acceptance of additional documents had set aside the issue before this Tribunal for read-judication. We find that the arguments of the assessees are that the assessees had placed the funds in the form of fixed deposits with nationalized banks and Co-operative banks in view of the specific requirements of U.P. Co-operative Societies Act. We find that section 58 of the U.P. Co-operative Societies Act requires the net profit to be distributed as under: (a) An amount not less than twenty five percent shall be transferred to a fund called the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 80-P(2) exempts income of cooperative societies to the extent mentioned in that section if the profits or gains are 'attributable' to the activity in which the cooperative society is engaged. The findings are that under statutory provisions the cooperative society is bound to invest 25% of its profits in Government securities. The assessee complied with this provision. In the process, it earned interest on these investments. The question is whether such profits or gains are attributable to the activity of supplying sugarcane carried on by the assessee. In Cambay Electric Supply Industrial Co. Ltd. v. CIT [1978] 113 1TR 84 the Supreme Court held that the expression 'attributable to' suggests that the Legislature intended to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... table to the business of an assessee. 7.4 Here in the present cases, we do not find the figures regarding the interest which the assessees may have earned on fixed deposits attributable to the making of statutory reserves. We further find that bye laws of the assessee has to be gone through which, though are available in the paper book, but require examination by the Assessing Officer as these were filed before Hon'ble Supreme Court as additional evidences. Therefore, as agreed by the parties, we deem it appropriate to remit the issue of deduction u/s 80P for read-judication by the Assessing Officer, who, in the light of judgment of Hon'ble Supreme Court and keeping in view the judgments relied on by the assessee and keeping in view ..... X X X X Extracts X X X X X X X X Extracts X X X X
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