9911796707
TMI Blog2015 (9) TMI 1403X X X X Extracts X X X X X X X X Extracts X X X X ..... come received on fixed deposit kept with Nationalized bank, commission income and other income amt. comes to Rs. 12,22,308/- was confirmed by ld. CIT(A) Gandhinagar and also not granted benefit of Section 80P of the Income-tax Act. 2. The assessment is bad in law, invalid and illegal. It be so held now and the same be quashed. 3. Direction to charge interest under ss 234B and 234C without application of mind is unjustified. It be so held now. 4. There being no concealment or furnishing of inaccurate particulars, initiation of penalty proceedings is erroneous. It be so held now. 5. That the appellant craves leave to add, to alter, to amend, to modify, to substitute, delete and/or rescind all or any of the grounds of appeal on or before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon'ble High Court of Gujarat is silent in its order dated 15/01/2014 in the case of Jafari Momin (supra) on the decision of Hon'ble ITAT, as regards the taxability of interest income u/s 56 of the Act. Taking into consideration, the ratio of the Hon'ble Supreme Court in the case of Totgars (supra) the decision of Hon'ble Jurisdictional Tribunal in the case of Jafari Momin (supra) in ITA No.1491/Ahd/2012 dated 4/9/2012 is distinguishable. This clearly indicates that appellant has earned the interest income from deposits made with institution other than co-operative banks, which definitely falls under the purview of section 56 in view of Hon'ble Supreme Court decision of Totgars (supra). Considering the facts and following the ratio laid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bject for which the society had been created. Hence the society was entitled to deduction u/s 80P(2)(a)(i) in respect of interest received on fixed deposit kept with Nationalized Banks by the society, it was decided in the case of CIT vs. Salem Co-op. Sugar Mills Ltd. (2006) 286 ITR 635 (Mad). The Dhanlaxmi Credit Co-op. Society Ltd. is a Primary Co-op. Sharafi Mandli and is principal object is to provide credit facility to members for Rural Development activity purpose. It is a Co-op. Society having area of operation confined to Unjha village only, therefore it is eligible deduction u/s 80P of I.T. Act. In the meanwhile, one of the Delhi based credit society, Delhi Co-op. Urban Thrift and Credit Society, also sought clarification from CBD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y banking activity. Surplus funds in the hands of society at times when borrower members demand was less in comparison to the deposits from members held by the assessee society. Therefore, in the interest of the members this surplus fund was given as deposit in nationalized bank to fetch some income. Similar type of issues has been dealt by Hon'ble High Court of Karnataka in the case of Tumkur Merchants Souharda Credit Co-op. Ltd. reported in (2015) 55 Taxman.com 447 (Kar). The relevant portion from the above referred judgment is reproduced below :- "10. In the instant case, the amount which was invested in banks to earn interest was not an amount due to any members. It was not the liability. It was not shown as liability in their ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt banks including nationalized banks. Therefore, in view of above discussion and relying on the decision of Hon'ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Co-op. Ltd.(supra), the assessee is eligible for deduction under section 80P(2)(a)(i) of the Act; however, rent income at Rs. 18,600, commission income at Rs. 13,701, other income Rs. 400 and incometax refund of Rs. 13,271 totalling to Rs. 45,542/- is not eligible for deduction under section 80P(2)(a)(i) of the Act. Ground Nos.1 and 2 are partly allowed. 6. Ground No.3 is regarding charging of interest u/s 234B & 234C which is consequential. So it is decided accordingly. 7. The next ground is regarding initiation of penalty proceedings which is premature a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
