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2016 (2) TMI 879 - AT - Income TaxDeduction claimed under section 80P(2)(a)(i) - interest income earned on investment / deposits with other banks -assessee is a credit co-operative society, which is accepting deposits from its members and using the same for giving loans to its members - Held that:- The surplus amount which was on account of amount received from its members only, which had not been advanced to any of the members was invested in the banks, against which the said investment was made out of surplus funds available with the assessee, which in turn, were amounts advanced by the members itself. The said parking of funds with the co-operative banks was claimed by the assessee to be in the nature of its business activity as it was the requirement of Maharashtra Co-operative Societies Act, 1960, that 20 to 30% of total deposits are to be parked in the investments with co-operative banks. It is not the case of the Department that the amount invested by the assessee was out of any liabilities due by the assessee. In the absence of the same and following the same parity of reasoning laid down by the Hon’ble High Court of Karnataka in Tumkur Merchants Souharda Credit Co-operative Ltd. Vs. ITO ([2015 (2) TMI 995 - KARNATAKA HIGH COURT]) and the facts of the present case being at variance to the facts before the Hon’ble Supreme Court in Totgar’s Co-operative Sale Society Ltd. Vs. ITO (2010 (2) TMI 3 - SUPREME COURT) we hold that the assessee is entitled to the claim of deduction under section 80P(2)(a)(i) - Decided in favour of assessee. Profit from other activities and services - deduction under section 80P(2)(a)(i) - relief allowed by the CIT(A) - Held that:- The perusal of the details filed of receipts totalling ₹ 50,21,759/-, out of which some details totalling ₹ 44,21,523/- are tabulated at page 9 of the CIT(A)’s order, it reflects that the assessee has received dividend of ₹ 160/-. The assessee had received interest income from savings account totalling ₹ 3,28,820/- and service charges of ₹ 4,48,431/-, cheque return charges of ₹ 68,680/- and charge and DD commission of ₹ 93,131/-, processing fees of ₹ 10,38,970/-, loan form fees of ₹ 10,780/- and interest received account of ₹ 24,15,280/-. As against the receipt of ₹ 44,21,523/- + other receipt from MSEB of ₹ 32,356/- and ₹ 4,65,343/-, totalling ₹ 50,21,759/-, proportionate expenditure relatable to such receipts at ₹ 43,01,457/- has been allowed by the Assessing Officer. The CIT(A) on the other hand, had upheld the order of Assessing Officer in respect of interest / commission from MSEB and had worked out the balance receipt eligible for deduction under section 80P(2)(a)(i) of the Act at ₹ 44,21,523/-. The proportionate expenditure on the same was allowed and the balance profit was determined as ₹ 6,34,206/- being eligible for deduction under section 80P(2)(a)(i) of the Act. We find no merit in the aforesaid order of CIT(A) in view of the nature of receipts in the hands of assessee being not covered by the provisions of section 80P(2)(a)(i) of the Act. The interest from savings bank account and the other receipts are not eligible for the aforesaid deduction under section 80P(2)(a)(i) of the Act. Accordingly, we reverse the order of CIT(A) in this regard - Decided in favour of revenue
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