TMI Blog2015 (2) TMI 995X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee for lending money to the members, as there were no takers. Therefore they had deposited the money in a bank so as to earn interest. The said interest income is attributable to carrying on the business of banking and therefore it is liable to be deducted in terms of Section 80P(1) of the Act. In fact similar view is taken by the Andhra Pradesh High Court in the case of COMMISSIONER OF INCOME -TAX III, HYDERABAD VS . ANDHRA PRADESH STATE COOPERATIVE BANK LTD ., reported in (2011 (6) TMI 215 - ANDHRA PRADESH HIGH COURT). In that view of the matter, the order passed by the appellate authorities denying the benefit of deduction of the aforesaid amount is unsustainable in law. Accordingly it is hereby set aside. - Decided in favour of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for scrutiny and statutory notice under the provisions of Section 143(2) was issued. The assessee produced all the information to substantiate its claim. The assessing authority, taking note of the insertion of Section 80P(4) of the Act, declined to extend the benefit of deduction under Section 80P(2)(i) an d passed an order of assessment, determining a total income of ₹ 42,02,079/-, as against the declared income of Rs. NIL. Aggrieved by the said order, the assessee preferred an appeal to the Commissioner of Income Tax (Appeals)-II. The appellate authority held that assessee s activity is not in the nature of banking and consequently the benefit of deduction under Section 80P of the Act cannot be denied. However, insofar as the inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d submitted, the case is covered by that judgment of the Apex Court and no case for interference is made out. 6. From the aforesaid facts and rival contentions, the undisputed facts which emerges is, the sum of ₹ 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 de posited 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 regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g in the phrase profits and gains attributable to the business of the specified industry (here generation and distribution of electricity) on which the learned Solicitor-General relied, it will be pertinent to observe that the legislature has deliberately used the expression attributable to and not the expression derived 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 electric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earning such interest income. The income so derived is the amount of profits and gains of business attributable to the activity of carrying on the business of banking or providing credit facilities to its members by a co-operative society and is liable to be deducted from the gross total income under Section 80P of the Act. 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 - 11 - 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 m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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