Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2016 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (10) TMI 86 - AT - Income TaxSection 80P deduction inter alia on DEMAT charges, special adhesive stamps and interest income derived from loans given to employees - Held that:- A perusal of the section 6(1) of the Banking Regulation Act makes it clear that these demat charges are for maintaining dematerialised form of assessee’s investments made in securities at its customers’ behest. Learned Departmental Representative seeks to cover the same in the “constituents” category hereinabove. We find no merit in this plea since it is not a case of constituents demat charges collection. Hon’ble apex court in Mehsana District Co-operative Bank vs. ITO [2001 (8) TMI 15 - SUPREME Court] allows section 80P deduction in case of safe deposit vaults covered under section 6 extracted hereinabove. We draw support therefrom to observe that the assessee’s demat charges in question are very much covered under the said statutory provision making it entitled to claim section 80P deduction in question. Income on account of special adhesive stamp franking charges as derived @ 1% commission thereupon the paper book contains franking machine authorisation as issued by the Chief Controlling Revenue authorities, Gujarat State, Gandhi Nagar. We notice that this amounts to conferring the assessing authority of an agent of State Government as provided under section 6(1)(b) of the Banking Regulations Act hereinabove. We accept assessee’s arguments by quoting Hon’ble apex Court’s decision hereinabove to hold it entitled for the impugned section 80P deduction. Interest income on loans given to employees - Both the lower authorities hold that the same is not admissible in case of interest earned from employees as per decision in CIT vs. Sirohi SBV Bank Ltd [2008 (9) TMI 112 - HIGH COURT RAJASTHAN ]. They nowhere hold that the said employees are not assessee’s members. The CIT(A) deals with this aspect to observe that the assessee has advanced the impugned loans to its nominal members. We have perused section 25 of the Gujarat State Co-operative Society’s Act 1961 prescribing such nominal members. There is nothing in section 80P of the Act to the contrary so as to decline the impugned deduction. We reiterate that it is a deduction provision to be liberally construed. We conclude in these facts that the assessee has derived the impugned interest income by advancing loans to its nominal members who are also working as its employees. Our view is that the latter status is not significant once the former condition of membership as prescribed under section 80P of the Act is qualified. We reverse both lower authorities’ finding on all three issues. - Decided in favour of assessee
|