TMI Blog2016 (4) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... : Shri Mehul S. Thakkar, AR For The Respondent : Shri Vilash V. Shinde, DR ORDER PER Manish Borad, Accountant Member. These two appeals by the assessee are directed against two separate orders of ld. CIT(A)-4, Ahmedabad, dated 8.5.2015 and 8.6.2015. Assessment orders were framed u/s 143(3) of IT Act, 1961 (in short the Act) by ACIT, B.K. Circle, Palanpur on 28.01.2014 27.02.2015 for Asst. Years 2011-12 2012-13 respectively. The assessee has raised various grounds of appeal for both the years but the solitary issue in all these grounds is regarding denial of deduction u/s 80P(2)(a)(i) of the Act at ₹ 55,731/- for Asst. Year 2011-12 and ₹ 69,486/- for Asst. Year 2012-13 for interest income earned from shor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were required by the assessee society to maintain operation funds and to meet the eventuality for repaying in deposit. Ld. AR further submitted that even if it is held that Banas bank is not a credit co-op. society and not eligible for deduction u/s 80P(2)(d) but alternatively deduction u/s 80P(2)(a)(i) is also available on such interest income earned through short term deposits with banks and, therefore, ld. CIT(A) was not correct in denying the benefits to the assessee. In support of his contention ld. AR relied on the decision of Hon. Karnataka High Court in the case of Tumkur Merchants Souharda Credit Co-op. Ltd. vs. ITO in ITA No.307 of 2014 dated 28th October 2014 and on the decision of co-ordinate bench in the case of Dhanlaxmi Cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... funds. A. By share B. To obtain funds I. From Members. k. By taking amount on loan. d. By gift. e. by entrance fee. : (4) To collect fund by selling shares should not be more than ₹ 50 00 000/- The value of: each share will remain ₹ 100/-' (5) The deposits and loans for fixed deposit in current or savings account can be taken at the rate of interest and amount as decided by the managing committee. But the total amount of deposits / and loan should not be more than twelve times of accumulated loss after deduction of recovered share amount, reserve fund and building fund but this limit can be enhanced with the permission of registrar for fixed time and conditions from time to time (6) If the funds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest 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 the 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) of the Act. In fact similar view is taken by the Andhra Pradesh High Court in the case of COMMISSIONER OF INCOME-TAX III, HYDERABAD vs. ANDHRA PRADESH STATE COOPERATIVE BANK LTD., reported in (2011) 200 TAXMAN 220/12. In that view of the mat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e exemption granted by Section 80P(2)(d) of the Act. The assessee was also eligible under the provisions of Section 80P(2)a(i) as the funds placed by assessee in the form of fixed deposits can be said to be kept for the purpose of business of the assessee as the assessee had availed credit facilities also against such fixed deposits which were again used for the purpose of business of assessee. Moreover, under similar circumstances, Chandigarh Bench in I.T.A. No. 996/2009 as noted by Ld. CIT(A) has decided in favour of assessee. The dividend income is exempt for all persons including assessee. The interest income from bank amounting to ₹ 18,190/- is though not exempt u/s 80(p)(2)(d) but is exempt u/s 80P(2)(i) of the Act. The case law ..... X X X X Extracts X X X X X X X X Extracts X X X X
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