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TMI Blog2024 (8) TMI 544X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee is eligible for deduction 80P(2)(a)(ii) itself. On perusal of the decision in the case Tumkur Merchants Souharda credit Co-Op. Ltd [ 2015 (2) TMI 995 - KARNATAKA HIGH COURT] relied by the Ld.AR is clearly explained that, the interest earned from the deposits made out of the idle funds of the assessee, the said interest income is attributable to the profits and gains of the business only. Therefore, we are of the view that the lower authorities have grossly erred in disallowing the said deduction u/s. 80P(2)(d), without appreciating the fact that, the claim of the assessee as a cottage industry and the entire Income was claimed as deduction u/s. 80P(2)(a)(ii). Therefore, we are of the view that, the assessee is a cottage industry and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and destitute pregnant women. The Appellant is getting allotment of wheat from the Tamil Nadu Civil Supplies Corporation Ltd., through the Government of Tamil Nadu. Also getting the blend (a mixture of various nutritious grains and nuts) through the Government approved sources. The members of the Society (Appellant) receive the above, clean the same, dry the wheat through the heating process, grinding the wheat into flour, mixing the wheat flour and the blend, packing the same into 1 kg packs and deliver the same to the designated Anganwadi centers. 3.1 The Assessee is a cottage Industry assessed as AOP (Cooperative Society) under the Income Tax Act, 1961 and has been allowed deduction u/s. 80P(2)(a)(i) of the Income Tax Act, 1961 on its e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred an appeal before the Ld.CIT(A), NFAC, Delhi. 4. The Ld.CIT(A), is pleased to confirm the action of the AO and dismissed the appeal of the assessee. Aggrieved by the order of the Ld.CIT(A), the assessee challenged the same by filing an appeal before us. 5. Before us, the Ld.AR Shri. I.Dinesh, appeared and argued that, the assessee is a co-operative society formed by the Government of Tamilnadu through social welfare department. The Ld.AR filed a paper book before us consisting of 1 to 47 pages and drew our attention to the Circular No.722 of the CBDT dated 19/09/1995 (Page No.37 of the paper book), wherein the criteria for availing the benefits of Section 80P(2)(a)(ii) of the Act by a cottage industry have been specified in para 3 as de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e society is in its regular course of its operations and forms part of the revenue attributable to the operations of the society as a cottage industry and hence it is eligible for deduction 80P(2)(a)(ii) itself. 5.2 Further the Ld.AR relied on the decision of the Hon ble High court of Karnataka in the case Tumkur Merchants Souharda credit Co-Op. Ltd Vs.ITO, Ward V, Tumkur (2015) 55 Taxmann.com 447(Kar), wherein the Hon ble High Court held as under: 8. Therefore, the word attributable to is certainly wider in import than the expression derived from . Whenever the legislature wanted to give a restricted meaning, they have used the expression derived from . The expression attributable to being of wider import, the said expression is used by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii). Therefore, the Ld.AR pleaded for setting aside the orders of the lower authorities and allow the appeal of the assessee s claim of deduction u/s. 80P(2)(a)(ii) of the Act. 6. Per contra, the Ld.Addl.CIT Mr.Aroon prasad stated that, the assessee is not eligible for deduction u/s. 80P(2)(d), as the interest income on deposits has been received by the assessee from the banks and not from the co operative societies. Further, contended that, the Tamilnadu Industrial Co-op. Bank ltd, Chennai (TAICO Bank) has been carrying on the business of banking as per the Licence No.RPCD.(Che)/05/03.00.109/2009- 10 dated April 06, 2010 and therefore, the AO and the Ld.CIT(A) has rightly disallowed the deduction claimed by the assessee u/s. 80P(2)(d) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 80P(2)(a)(ii) of the Act by a cottage industry have been specified in para 3 (supra). According to Ld.AR the assessee is a cottage industry, since the criteria stated in the said circular are satisfied and eligible for claiming deduction u/s. 80P(2)(a)(ii) of the Act. According to the AR both the AO and Ld.CIT(A) have appreciated the fact that the assessee is a cottage industry but still have disallowed the interest earned from the banks as not eligible for deduction u/s. 80P(2)(d) against the claim of the assessee u/s. 80P(2)(a)(ii) of the Act. It is observed that the interest income earned by the society is in its regular course of its operations and does forms part of the revenue attributable to the operations of the society as a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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