TMI Blog2015 (2) TMI 1132X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Respondent : Shri R. P. Maurya, D.R. ORDER Per Rajpal Yadav, Judicial Member The assessee is in appeal before us against the order of ld. CIT(A)-4 dated 09th June, 2015 passed for A.Y. 2012-13. The grounds of appeal taken by the assessee are not in consonance with Rule 8 of ITAT Rules, 1963. They are descriptive and argumentative in nature. 2. In brief, the grievance of the assessee is that ld. CIT(A) has erred in denying the claim of deduction u/s.80P(2)(a)(i) of interest income amounting to ₹ 3,93,533/- which was earned by the assessee on deposits made out of surplus funds. 3. The brief facts of the case are that the assessee is a Co-operative Society registered under Gujarat Co-operative Society Act, 196 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm deposits in banks were only investment in the course of activity of providing credit facilities to members and that the same cannot be considered as investment made for the purpose of earning interest income and consequently passed a perverse order ? (ii) Whether the Tribunal is correct in law in holding that the interest earned on the deposits by the appellant/co-operative society does not qualify for deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961 on the facts and circumstances of the case? (iii) Without prejudice, whether the tribunal is justified in not holding that if at all the interest earned from deposits with scheduled banks is held to be not attributable to the activity of providing credit to member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) shall be the following, namely: (a) in the case of co-operative society engaged in- (i) carrying on the business of banking or providing credit facilities to its members, or (ii) to (vii) ** ** ** the whole of the amount of profits and gains of business attributable to any one or more of such activities. 9. The word 'attributable' used in the said Section is of great importance. The Apex Court had an occasion to consider the meaning of the word 'attributable' as supposed to derive from its use in various other provisions of the statute in the case of Cambay Electric Supply Industrial Co. Ltd. v. CIT [1978] 113 ITR 84 (at page 93) as under:- 'As regards the aspect emerging from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The expression attributable to being of wider import, the said expression is used by the legislature whenever they intended to gather receipts from sources other than the actual conduct of the business. A Co-operative Society which is carrying on the business of providing credit facilities to its members, earns profits and gains of business by providing credit facilities to its members. The interest income so derived or the capital, if not immediately required to be lent to the members, the society cannot keep the said amount idle. If they deposit this amount in bank so as to earn interest, the said interest income is attributable to the profits and gains of the business of providing credit facilities to its members only. The society i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther they made it clear that they are confining the said judgment to the facts of that case. Therefore it is clear, Supreme Court was not laying down any law. 12. 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 account. In fact this amount which is in the nature of profits and gains, was not immediately required by the assessee for lending money to its 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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