9911796707
TMI Blog2025 (3) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... RA PRADESH HIGH COURT] and also Kakateeya Mutually Aided Thrift and Credit Cooperative Society [2023 (9) TMI 211 - ITAT VISAKHAPATNAM] no hesitation to come to the conclusion that the facts in the case of Totgars Cooperative Sale Society Limited [2008 (9) TMI 493 - KARNATAKA HIGH COURT]as the ratio laid down by the Hon'ble Supreme Court is not applicable to the present case in hand and, therefore, AO as well as CIT(Appeals) are not correct to disallow the amount on the ground that the assessee had earned interest income from savings bank accounts other than cooperative bank. Therefore, the grounds raised by the assessee are allowed. X X X X Extracts X X X X X X X X Extracts X X X X ..... es to the members for agricultural activities. It was the further submission of the assessee that the appellant-Society also claimed deduction under section 80P(2) of the Act for the earlier assessment years, but the same was allowed by the Department in accordance with law. Ld. Counsel for the assessee further submitted that the only grievance of the assessee is that the interest income of Rs. 7,66,340/- has been received from the savings bank account of the assessee-society, which was not earned from the Cooperative Bank. He further submitted that the revenue authorities relied on the decision of the Hon'ble Apex Court in the case of M/s. Totgars Cooperative Sale Society Limited -vs.- ITO, Karnataka (2010) 188 taxmann 282 in Civil Appeal No. 1622 of 2010. He further submitted that the decision of the Hon'ble Apex Court in the case of Totgars Cooperative Sale Society Limited -vs.- ITO, Karnataka (supra) is not applicable to the facts of the present case on hand and so many Hon'ble High Courts and Tribunal are held that the decisions of the Hon'ble Apex Court is distinguishable to the facts of present case on hand. He pleaded to set aside the orders passed by both the revenue autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grown by its members, or] (iv) the purchase of agricultural implements, seeds, livestock or other articles intended for agriculture for the purpose of supplying them to its members, or (v) the processing, without the aid of power, of the agricultural produce of its members, [or] (vi) the collective disposal of the labour of its members, or (vii) fishing or allied activities, that is to say, the catching, curing, processing, preserving, storing or marketing of fish or the purchase of materials and equipment in connection therewith for the purpose of supplying them to its 8 members,] the whole amount of profits and gains of business attributable to any one or more of such activities:" 8. Further, I also extract below the provisions of section 80P(2)(d) and (e) of the Act for reference: "(d) in respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other co-operative society, the whole of such income; (e) in respect of any income derived by the cooperative society from the letting of godowns or warehouses for storage, processing or facilitating the marketing of commodities, the whole of such income;" 9. Fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... members. As seen from the facts disclosed in the decision of the Karnataka High Court in Totgars, from out of which the decision of the Supreme Court arose, the assessee was carrying on the business of marketing agricultural produce of the members of the society. It is also found from paragraph-3 of the decision of the Karnataka High Court in Totgar's Co-operative Sale Society Ltd.'s case (supra) that the business activity other than marketing of the agricultural produce actually resulted in net loss to the society. Therefore, it appears that the assessee in Totgars was carrying on some of the activities listed in clause (a) along with other activities. This is perhaps the reason that the assessee did not pay to its members the proceeds of the sale of their produce, but invested the same in banks. As a consequence, the investments were shown as liabilities, as they represented the money belonging to the members. The income derived from the investments made by retaining the monies belonging to the members cannot certainly be termed as profits and gains of business. This is why Totgar's struck a different note." 10. Further Hon'ble High Court of Andhra Pradesh and Telen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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