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TMI Blog2015 (4) TMI 1116X X X X Extracts X X X X X X X X Extracts X X X X ..... ll the cannons of law and justice. 2. That the order of the Assessing Officer as upheld by the Commissioner of Income Tax(Appeals) Chandigarh holding that the income of Rs. 10,54,722/- out of the amount of interest received from commercial banks as income from other sources and that too setting off/allowing expenses attributable to the earning of the said income @ 1% more particularly when the loans raised have been deposited in the banks and have earned interest under consideration as per the provision of the law in the facts and circumstances of the case is bad in law and needs to be set-aside. 3. That the order of the Assessing Officer as upheld by the Commissioner of Income Tax (Appeals) Chandigarh disallowing claim of the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the only issue which has been raised i.e. whether assessee is entitled to deduction u/s 80P(2)(a)(i). During the assessment proceedings it was noticed that assessee has received interest from various banks amounting to Rs. 10,65,376/-. According to Assessing Officer this interest could not be assessed as business income because earning of interest on other banks on surpluses funds was not the activity of the assessee eligible for deduction u/s 80P(2)(a)(i) and, therefore, after reducing 1% expenses the net amount of Rs. 10,54,752/- was assessed under the head 'income from other sources.' 7. On appeal it was mainly submitted that in earlier years this issue was decided by the Chandigarh Bench of the Tribunal in favour of the assessee. Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and was taxable under Section 56 being income from other sources. It appears that since the judgment of the Tribunal is prior to the judgement of the Hon'ble Supreme Court relied upon on behalf of the Revenue. The Tribunal did not have advantage of the law laid down therein. The matter is thus, covered in favour of the Revenue by the judgment of Hon'ble Supreme Court. Contrary view of the Tribunal cannot be sustained." Following the above, we decide this issue against the assessee. 11. In the result, assessee appeal is dismissed. 12. In this appeal Revenue has raised the following grounds:- 1. On the facts and circumstances of the case and in law, the Ld. CIT(A) has erred in allowing appeal of the assessee without appreciating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd, Chandigarh in ITA No. 120/Chd/2007. 15. Before us, Ld. DR submitted that when the issue was decided in the case of Punjab State Cooperative Agricultural Development Bank, the decision of Hon'ble Supreme Court in the case of Totgar's Co-operative Sale Society Ltd vs ITO [2010] 322 ITR 283 (SC) was not available. The principles laid down in this case are squarely applicable even in the case of interest earned form employees. 16. On the other hand Ld. counsel of the assessee submitted that loans were given for purchase of vehicles and construction of houses to the employees as per terms of employment and the loans were not given out of surplus funds, therefore, the decision of Hon'ble Supreme Court in the case of Totgar's Co op ..... X X X X Extracts X X X X X X X X Extracts X X X X
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