TMI Blog2012 (1) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... its banking activity. Once it is a business income, the assessee is entitled for deduction u/s 80P(2)((a)(i). therefore, this Tribunal is of the opinion that the judgment of the Larger Bench of the apex Court in Karnataka State Cooperative Apex Bank (2001 (8) TMI 9 - SUPREME Court) is applicable to the facts of this case. Appeal of the revenue stands dismissed. - I.T.A. No. 372/Coch/2010 - - - Dated:- 20-1-2012 - Shri N.R.S. Ganesan (JM) and Shri Sanjay Arora (AM) For the Appellant : Ms Vijayaprabha For the Respondent : Shri Arun Raj. S ORDER Per N.R.S. Ganesan (JM) This appeal of the revenue is directed against the order of Commissioner of Incometax( A)-IV, Kochi dated 25-03-2010 and pertains to assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cheme Is not eligible for deduction u/s 80P(2)(a)(i). Referring to the Apex Court judgment in the case of Commissioner of Incometax vs Karnataka State Co-operative Apex Bank (supra), the ld.DR pointed out that in that case it was a statutory requirement for the assessee to deposit funds with State Bank or Reserve Bank of India for the purpose of carrying on its banking business. In this case, there is no such statutory requirement. Therefore, the judgment in the case of Commissioner of Income-tax vs Karnataka state Co-operative Apex Court (supra) is not applicable to the facts of the case on hand. 4. On the contrary, Shri Arun Raj. S, the ld. counsel for the assessee submitted hat the Apex Court in Commissioner of Income-tax vs Karnataka ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tural produce. The assessee deposited surplus funds in short term deposits and securities which surplus was not required for business purpose. The assessee markets the produce of its members whose sale proceeds, at times, were retained by it. The interest received by the assessee from such deposits / securities was classified as Income from other sources and taxable u/s 56 of the Income-tax Act, 1961. Therefore, the apex court held that the assessee is not entitled for deduction u/s 80P(2). According to the ld.counsel, the fats of the case, in our hand, are entirely different. According to the ld.counsel the assessee is a banking society and doing banking business. Therefore, the interest earned on investment is eligible for deduction u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of banking. Therefore, this Tribunal is of the opinion that the judgment of the Apex court in Totgar s Co-operative Sale Society Ltd (supra) is not applicable in respect of the co-operative society whose business is banking. Admittedly, the assessee has invested funds in state promoted treasury small savings fixed deposit scheme. Since Government of India has withdrawn India Vikas Patra, as a small savings instrument, funds invested at the discretion of the bank is one of the activities of the banking as per the Banking Regulation Act. Since the assessee co-operative society is in the business of banking the investment in the state promoted treasury small savings fixed deposit certificate scheme is a banking activity, therefore, the intere ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
