TMI Blog2016 (4) TMI 1091X X X X Extracts X X X X X X X X Extracts X X X X ..... framed by ACIT, Circle-56 and ITO Ward- 56(4), Kolkata u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) vide their orders dated 31.12.2010 and 28.11.2011 for assessment years 2008-09 and 2009-10 respectively. 2. Both appeals are heard together and pass a consolidate order for the sake of convenience. First we take up ITA No. 1164/Kol/2012 for AY 2008-09. 3. Revenue has raised revised grounds which are reproduced below:- That on the facts and in he circumstances of the case the Ld. CIT(A)- XXXVI, Kolkata, erred in allowing he interest income of ₹ 1,14,93,068/- claimed by the assessee as exemption u/s. 80P(2)(a)(i) of the IT Act. That on the facts and in the circumstances the recent jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot allowed as deduction then the expenses incurred in relation to this income should be allowed as deduction. However, AO has disregarded the claim of assessee relying in the judgment of Hon'ble Supreme Court in the case of Tatgars cooperative sales society Ltd. 188 taxmann 282 (SC) and further relied in the case of Agar Apex Marketing Society v. CIT 201 ITR 332 (SC). The AO further observed that the question of expense against the interest income does not arise as this investment were made out the surplus fund and all expenses of activity of the assessee-society has been duly recognized in its books of account. 5. Aggrieved, assessee preferred an appeal before Ld. CIT(A) who has deleted the addition made by AO by observing as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n-complusory investment would also qualify for exemption u/s. 80P(2)(a)(i) of the Act. The Assessing Officer is directed accordingly. This ground of appeal is therefore allowed. The appellant gets relief of ₹ 1,14,93,068/-. Being aggrieved by this order of Ld. CIT(A) Revenue is in appeal before us. 6. We have heard the rival parties and perused the materials available on record. At the time of hearing of this appeal the Ld. Counsel for the assessee filed before me a copy of the decision rendered by ITAT, Kolkata Bench in the case of S.E.C. E. Co. Railways Employees Co-operative Credit Society Ltd., vs. ACIT in ITA No. 11693/Kol/2012 order dated 30.10.2014. In the aforesaid case the identical question as to whether interest i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der of the Learned Tribunal. It appears that the point involved is whether interest earned out of the investment earned by the assessee cooperative can be treated to be the income arising out of business activity or from other sources in order to apply the provision of Section 80P(2)(a)(i) of the IT Act it is an undisputed factual position that similar issue arose before the Commissioner of Income Tax (Appeal) in relation to the assessment year 1998- 99 to 2002-2003 as also for the assessment year 1995-96 and 1996-97. Then again in relation to the assessment years 2003-04 and 2004-05 a similar point arose. The Learned Tribunal in relation to the assessment years 1998-99 to 2002-2003 by order dated 10.11.2006 in ITA Nos 840 to 844/Kol/2006 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been produced before us to show subsequent decision of the Tribunal in relation to the assessment years 1998-99 to 2002-03 and 2003-04 have been challenged by any of the parties before this Court. It is submitted by Mr. Bowmick that there has been challenge of the decision in relation to assessment years 1995-96, 1996-97 and the same is pending before this Court we think that challenge of the assessee has now become redundant as the earlier view taken in both the assessment years have been reversed by the Tribunal by its subsequent decision. Hence the pendency of that earlier matter is of no consequence in this matter. Had there been a challenge of the decision of the Tribunal in relation to the assessment years 1998-99 to 2002-03 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iately for business purposes, it invested same in specified securities and earned interest income. In these circumstances the Hon ble Apex Court had held that interest earned would come in category of income from other sources taxable u/s. 56 of the Act and would not qualify for deduction as business income u/s. 80P(2)(a)(i). From the above it is amply evident in the present case the assessee has not retained any amount due to its members and instead of paying the same had invested the same and earned interest. Thus this case law is not applicable on the facts of the present case. 7.4 As regards the decision of Hon ble Patna High Court in the case of Bihar Rajya Sahkari Bhoomi Bikash Co-op. Bank Ltd. (supra) the same is also not app ..... X X X X Extracts X X X X X X X X Extracts X X X X
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