9911796707
TMI Blog2015 (4) TMI 829X X X X Extracts X X X X X X X X Extracts X X X X ..... me from other sources". 2. The appellant is a Co-operative Society in the business of marketing agricultural produce and provide credit facilities to its members. For the assessment years 1991-92 to 1999-2000, appellant had claimed deduction under Section 80P(2). No regular assessment was conducted, but a notice under Section 148A of Income Tax Act ('Act' for short) was issued by the respondent. Appellant raised an objection that Notice under Section 148 could not have been issued as prior consent of the Additional Commissioner was necessary. The appellant requested the respondent to accept the original returns and also filed one more return as a technical compliance and furnished the information called for. On completion of assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant has preferred these appeals. 5. We have heard Sri.A.Shankar, learned counsel appearing for the appellant and Sri.Y.V.Raviraj, learned counsel for the Revenue. 6. Learned counsel for the appellant submits that the very issue with regard to the benefit of deduction of interest came up for consideration before the Hon'ble Supreme Court in Civil Appeal Nos.1622/2010 to 1629/2010 filed by the Appellant and by order dated 08.02.2010 the said appeals have been disposed off by recording a finding as follows: "The words "the whole of the amount of profits and gains of business" emphasise that the income in respect of which deduction is sought must constitute the operational income and not the other income which accrues to the Society. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dicates that the appellant earns interest on fund which are not required for business purpose and therefore, in the facts and circumstances, the interest income has been held to fall in the category of "other income". 9. Learned counsel for the appellant further submits that the Assessing Officer has erred in coming to the conclusion that the appellant who is involved in the business of marketing of agricultural produce of its members are not exposed to any element or risk when funds are placed in bank deposits, bond and securities and on this premise, the Assessing Authority has wrongly held that the income so earned is "income from other sources" and therefore, disallowed the exemption under Section 80P(1)(i). He submits that in view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is no doubt true that the appellant did initially claim deduction under Section 80P(2). Upon the pronouncement of the order by the Apex Court, in these appeals referred to supra, the income earned on the interest is declared as "other income" falling under Section 56 of the Income Tax Act. Then the next immediate question that follows is as to whether the entire fund i.e., in deposit with the Bank is taxable or the proportionate expenditure incurred by the appellant requires deduction. It is logical that when the Revenue is permitted to assess and recover taxes from assessee under Section 56 by treating the income earned by interest as income from "other sources", the appellant shall be entitled for proportionate expenditure cost incurred i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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