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TMI Blog2024 (6) TMI 1402X X X X Extracts X X X X X X X X Extracts X X X X ..... ative Ltd. [ 2015 (2) TMI 995 - KARNATAKA HIGH COURT ] wherein the interest accrued in a sum is from the deposits made by the assessee in a nationalized bank out of the amounts which was used by the assessee for providing credit facilities to its members considering the decision in case of Toatagarh [ 2010 (2) TMI 3 - SUPREME COURT ] as held amount which was invested in banks to earn interest was not an amount due to any members. It was not the liability. It was not shown as liability in their account. In fact this amount which is in the nature of profits and gains, was not immediately required by the assessee for lending money to the members, as there were no takers. Therefore they had deposited the money in a bank so as to earn interest. The said interest income is attributable to carrying on the business of banking and therefore it is liable to be deducted in terms of Section 80P(1) We hold that assessee is entitled to deduction u/s 80P(2)(a)(i) of the act on interest income received by the assessee from state bank of India of funds which are not immediately required for its utilisation in case of assessee being a members credit cooperative society. Assessee appeal allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... rners employees cooperative credit society of the employees of nuclear Power Corporation of India. It has received interest from bank, which is not eligible for deduction under section 80P(2) of the act. Accordingly appeal of the assessee was dismissed 6. Before us assessee is contesting the above appellate order raising several ground of appeal. Assessee is contested that for assessment year 2013 - 14 under section 143 (3) disallowance was made and assessee was found by the learned CIT - A as eligible for deduction under section 80P(2) (a) of the act. Similar is the case for assessment year 2014 - 15 wherein the claim of the assessee was held to be allowable by the learned CIT - A. He further relied upon the decision of the coordinate bench in ITA number 643/PU/2024 dated 14/05/2024 for assessment year 2018 - 19 wherein the deduction under section 80P(2) (d) such deduction is allowable. Therefore the claim of the assessee is that deduction is allowable to the assessee even in the otherwise under section 80P(2) (d) of the act. 7. The learned departmental representative vehemently supported the orders of the lower authority and stated that the provisions of section 80 P(2)(a) does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee. (2) The sums referred to in sub-section (1) shall be the following, namely: (a) in the case of co-operative society engaged in-- (i) carrying on the business of banking or providing credit facilities to its members, or (ii) to (vii) xx xx xx the whole of the amount of profits and gains of business attributable to any one or more of such activities." 7. The word 'attributable' used in the said section is of great importance. The Apex Court had an occasion to consider the meaning of the word 'attributable' as supposed to derive from its use in various other provisions of the statute in the case of Cambay Electric Supply Industrial Co. Ltd. v. CIT [1978] 113 ITR 84 (SC) as under: 'As regards the aspect emerging from the expression "attributable to" occurring in the phrase "profits and gains attributable to the business of the specified indu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vity of carrying on the business of banking or providing credit facilities to its members by a co-operative society and is liable to be deducted from the gross total income under Section 80P of the Act. 9. In this context when we look at the judgment of the Apex Court in the case of M/s. Totgars Co-operative Sale Society Ltd., on which reliance is placed, the Supreme Court was dealing with a case where the assessee-Cooperative Society, apart from providing credit facilities to the members, was also in the business of marketing of agricultural produce grown by its members. The sale consideration received from marketing agricultural produce of its members was retained in many cases. The said retained amount which was payable to its members from whom produce was bought, was invested in a short-term deposit/security. Such an amount which was retained by the assessee - Society was a liability and it was shown in the balance sheet on the liability side. Therefore, to that extent, such interest income cannot be said to be attributable either to the activity mentioned in Section 80P(2)(a)(i) of the Act or under Section 80P(2)(a)(iii) of the Act. Therefore in the facts of the said case, t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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