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TMI Blog2017 (12) TMI 879X X X X Extracts X X X X X X X X Extracts X X X X ..... edit Society providing credit facility to its members. It filed its return of income for the A.Y 2012-13 on 28.09.2012 admitting "income from business or profession" at Rs. 1,91,88,053 and claiming the same as a deduction u/s 80P of the Act. 3. During the assessment proceedings u/s 143 (3) of the I.T. Act, the AO observed that the assessee was established for the benefit of SBI Officers only, by collecting share capital and thrift contributions every month, from members and was sanctioning loans to the members who are in need of money for performing of marriages and higher education of children etc. From the income and expenses statement for the year, the AO observed that the assessee's receipts include "Interest on Deposits" amounting to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank. The AO was, however, not convinced with the assessee's explanation. He was of the opinion that the interest earned on Fixed Deposits made with nationalized bank is not attributable to the activities of providing credit facilities for its members. He therefore, held that the interest income on FDs received from SBI of Rs. 77,44,295 is the "income from other sources" and disallowed the claim of deduction u/s 80P(2)(a)(i) of the Act to that extent. Aggrieved, the assessee preferred an appeal before the CIT (A) who confirmed the order of the AO and the assessee is in second appeal before us. 4. The learned Counsel for the assessee submitted that the assessee, being a Cooperative Society, carrying on the business of banking, is required t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /2013 dated 26.2.2014 had held that the assessee is eligible for deduction u/s 80P of the Act and that the Revenue had gone in appeal to the Hon'ble High Court by way of ITTA No.669/2016 and the Hon'ble High Court, following its decision in W.P.Nos. 12727 of 2016 and Batch dated 15.3.2017, has upheld the order of the Tribunal. He filed the copies of the said orders before us. 5. The learned DR, on the other hand, submitted that similar issue in the case of SBI, Gujarat region had come up for consideration before the Hon'ble Gujarat High Court, as reported in (2016) 72 Taxmann.com 64 (Guj.), wherein following the decision of the Hon'ble Supreme Court in the case of Totgar's Co-operative Sale Society Ltd vs. ITO (cited Supra) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and direct the AO to allow the deduction u/s 80P of the Act of the 'interest income' earned by the assessee on the deposits placed with the SBI, a nationalised bank. The learned DR had tried to distinguish the facts of the case before us with the above decision stating that in the case of the assessee, the interest is earned on FDR's, while, in the case before the Hon'ble High Court, the deposits were not fixed deposits. However, from the assessment order, it is seen that the reserves and surpluses have been kept as deposits and there is no reference to 'FDRs' by the AO. Therefore, this distinction is not established.
7. In the result, assessee's appeal is allowed.
Order pronounced in the Open Court on 15th December, 2017. X X X X Extracts X X X X X X X X Extracts X X X X
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