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2015 (1) TMI 743 - AT - Income TaxTDS u/s 194A - Interest paid on term deposits to its members by the Co-op bank - whether the assessee co-operative bank engaged in the banking business is liable for TDS or not? - Held that:- Wherever, the reference is made to any co-operative society, the Income tax Act, 1961 has clearly distinguished and specified the type of co-operative society based on the type of activity carried out. Such a distinction was required as the legislation intends to extend different benefits to different types of co-operative societies through the Income tax Act. The assessee claimed the benefit of sections 36(1)(viia), 269 SS and 269T on the ground that it is a co-operative bank but for availing exemption from TDS under section 194A, it is claiming itself as an ordinary 'co-operative society' within the meaning of section 194A(3)(v) of the Act. We find that this distinguishes the co-operative society and the cooperative society carrying on business of banking. The Hon'ble Kerala High Court in the case of Moolamatom Electricity Board Employees Co-operative Bank Ltd., [1998 (7) TMI 53 - KERALA High Court] has distinguished this. The decision of Hon'ble Kerala High Court in the case of ITO & Ors. vs. Thodupuzha Urban Co-operative Bank, wherein they have clearly defined and interpreted the Section it appears that the bank did not consider the provision of section 194A(viia). Therefore, when there is a specific provision, general provision cannot be applied in the case of the assessee otherwise the provision of section 194A (viia) will become redundant. Interest paid on time deposits by a co-operative society, other than a co-operative society or bank referred to in sub-clause (a), engaged in carrying on the business of banking will be covered by sub-section (1), and therefore, will be liable to deduct income-tax. - Decided against assessee. Dividend income disallowed though the same is claimed as exempt u/s.80P(2)(d) - Held that:- We are of the view that both the revenue authorities are justified in holding that provisions of section 80-P(4) is not applicable to co-operative bank. Addition of ₹ 27,58,64,367/- deleted on account of accrued interest on loans by CIT(A) - Held that:- Interest accrued on sticky advances which was not brought in profit and loss account but taken to separate suspense account should be added as income only when actually received, which is in the case of the assessee. Thus we uphold the order of ld CIT(A) in deleting the addition of Rs. ₹ 27,58,64,357/-. - Decided against revenue.
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