TMI Blog2011 (11) TMI 666X X X X Extracts X X X X X X X X Extracts X X X X ..... Bansal appears for the respondent-assessee. 2. The revenue has preferred this appeal on following questions of law:- 1. Whether on the facts and in the circumstances of the case, the Hon'ble Income Tax Appellate Tribunal was correct in law in directing to allow deduction u/s 80P amounting to ₹ 61,94,383/- without appreciating that the investment of its surplus funds over and above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the special deduction under Section 80P (2) (a) (i) must relate to operational income. Where cooperative society was providing credit facilities to members or marketing agricultural produce of its members, investment of surplus on hand, which is not immediately required in short-terms deposits and securities, interest on such deposits is not business income but income from other sources. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eology of section 80P (2) (a) (i), which makes it applicable only to income derived from working or circulating capital. 5. In the case of the respondent assessee in I.T.A. No.(245) of 2005, CIT v. M/s United Mercantile Cooperative Bank Ltd., the Division Bench had dismissed the appeal on the same question with the short order, which reads as follows:- The question whether the interest on s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in Totgar's Cooperative Sale Society Ltd. (Supra) did not find merit in the arguments advanced by the revenue and relied upon its earlier decisions, that source was irrelevant for construing provisions of Section 80P of the Act. The Supreme Court observed, We find no merit because all the judgments cited were cases relating to co-operative banks and the assessee- society is not carryin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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