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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 ..... eligible for deduction of interest income HELD THAT:- On plain reading of the provisions of section 80P(2) (a) (i) the assessee is eligible for deduction of the whole of the sum attributable to carrying on business of credit to its members. Therefore only such income which has been attributable to business from its member is eligible for deduction under this section. Identical issue has been decided in case of Tumkur Merchants Souharda Credit Cooperative 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 Toata ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that assessee has invested surplus amount in fixed deposits with state bank of India and earned interest of ₹ 1,176,084/ . The assessee claimed deduction under section 80(P)(2) of the act which was denied to the assessee and is contested in this appeal. 3. The brief facts of the case shows that assessee is a co-operative society registered under the Maharashtra State cooperative societies act, 1961 collecting deposits from members under various scheme and major source of income is on account of interest on loan to its members and interest from fixed deposits. The assessee filed its return of income on 12/2/2021 wherein the gross total income of assessee was computed at ₹ 13,854,411/ and entire amount has been claimed as a deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 not provide for such ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in case of Toatagarh , it has been held as under: 6. From the aforesaid facts and rival contentions, the undisputed facts which emerges is, the sum of Rs. 1,77,305/- represents the interest earned from short-term deposits and from savings bank account. The assessee is a Cooperative Society providing credit facilities to its members. It is not carrying on any other business. The interest income earned by the assessee by providing credit facilities to its members is deposited in the banks for a short duration which has earned interest. Therefore, whether this interest is attributable to the business of providing credit facilities to its members, is the question. In this regard, it is necessary to notice the relevant provision of law i.e., Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved from . It cannot be disputed that the expression attributable to is certainly wider in import than the expression derived from . Had the expression derived from been used, it could have with some force been contended that a balancing charge arising from the sale of old machinery and buildings cannot be regarded as profits and gains derived from the conduct of the business of generation and distribution of electricity. In this connection, it may be pointed out that whenever the legislature wanted to give a restricted meaning in the manner suggested by the learned Solicitor-General, it has used the expression ''derived from , as, for instance, in section-80J. In our view, since the expression of wider import, namely, attributable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 liabili ..... X X X X Extracts X X X X X X X X Extracts X X X X
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