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2017 (1) TMI 766 - ITAT NAGPUR

2017 (1) TMI 766 - ITAT NAGPUR - TMI - Benefit of exemption u/s 80P(2)(a)(i) - denial of claim holding that the assessee society was engaged in the business of cooperative banking - Held that:- As decided in Asstt. Year 2009-10 the assessee society is maintaining operational funds and to meet any eventuality towards repayment of deposit the cooperative society is maintaining some liquidated funds as short term deposits with banks. Hence adhering to the doctrine stair desises, we hold that the as .....

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correct and bad in law and against the natural justice. 2. That the learned Assessing Officer erred in treating the assessee as a co-operative bank u/s 80-P(4) instead of treating the assessee as a society providing credit facilities to its members. 3. The Assessing Officer erred in disallowing the claim u/s 80-P of ₹ 1784272-00 and disallowance of provision. 2. In this case the assessee is a co-operative credit society. In the assessment order the AO denied the benefit of exemption u/s 80 .....

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credit facilities" takes its colour from the preceding expression 'business of banking". It is also held that the words which are used in one particular clause have to be given the same colour and understood as forming part of one genus of which they may be different species. The said finding is given on the use of terms "banking or providing credit facilities to its members" appearing section 80P(2)(a)(i) of the Income Tax Act 1961. 5. Perusal of the financial statement .....

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rt has held that as long as there is no ambiguity in the statutory language, resort to any interpretative process to unfold the legislative intent becomes impermissible. The supposed intention of the Legislature cannot then be appealed to whittle down the statutory language which is otherwise unambiguous. If the intendment is not in the words, it is nowhere else. The need for interpretation arises when the words used in the statute are, in their own terms, ambivalent and do not manifest the inte .....

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of income by furnishing of inaccurate particulars of income. 3. Against the above order the assessee appealed before the learned CIT(Appeals). The learned CIT(Appeals) elaborately reproduced the submission of the assessee. However, learned CIT(Appeals) declined to adjudicate the issue and dismissed the appeal for non prosecution. 4. Against the above order the assessee is in appeal before the ITAT. 5. I have heard the learned D.R. None appeared on behalf of the assessee. However, in my considere .....

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sessee by this Tribunal in ITA No. 371/Nag/2012 for Asstt. Year 2009-10 vide order dated 27-05-2015 in the case of Chhattisgarh Urban Credit Sahakari Sanstha Maryadit wherein the Tribunal held as under : 11 Upon careful consideration, we note that identical issue was the subject matter of consideration by ITAT, Ahmedabad Bench decision in the case of Dhanlaxmi Credit Cooperative Society Ltd. (supra), in which one of us, learned Judicial Member, was a party. The concluding portion of the Tribunal .....

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91/Ahd/2012 (for A.Y. 2009-10) and CO No.138/Ahd/2012 (by Assessee) order dated 31/10/2012. The relevant portion is reproduced below:- 19. The issue dealt with by the Hon ble Supreme Court in the case of Totgars (supra) is extracted, for appreciation of facts, as under: What is sought to be taxed under section 56 of the Act is the interest income arising on the surplus invested in short term deposits and securities which surplus was not required for business purposes? The assessee(s) markets the .....

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erest income would come in the category of income from other sources , hence, such interest income would be taxable under section 56 of the Act, as rightly held by the assessing officer... 19.1. However, in the present case, on verification of the balance sheet of the assessee as on 31.3.2009, it was observed that the fixed deposits made were to maintain liquidity and that there was no surplus funds with the assessee as attributed by the Revenue. However, in regard to the case before the Hon ble .....

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on 80P(2)(a)(i) of the Act. The argument was rejected by the assessing officer as also by the Tribunal and the High Court, hence, these civil appeals have been filed by the assessee(s). 19.2. From the above, it emerges that (a) that assessee (issue before the Supreme Court) had admitted before the AO that it had invested surplus funds, which were not immediately required for the purpose of its business, in short term deposits; (b) that the surplus funds arose out of the amount retained from mark .....

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resent assessee with that assessee (before the Supreme Court), the following clinching dissimilarities emerge, namely: (1) in the case of the assessee, the entire funds were utilized for the purposes of business and that there were no surplus funds; -in the case of Totgars, it had surplus funds, as admitted before the AO, out of retained amounts on marketing of agricultural produce of its members; (2) in the case of present assessee, it did not carry out any activity except in providing credit f .....

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s members, as it accepts deposits from and lends the same to its members. To meet any eventuality, the assessee was required to maintain some liquid funds. That was why, it was submitted by the assessee that it had invested in short- term deposits. Furthermore, the assessee had maintained overdraft facility with Dena Bank and the balance as at 31.3.2009 was ₹ 13,69,955/- [source: Balance Sheet of the assessee available on record]. 19.6. In overall consideration of all the aspects, we are o .....

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