TMI Blog2017 (12) TMI 879X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 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. - Decided in favour of assessee. - ITA No. 673/Hyd/2017 - - - Dated:- 15-12-2017 - Smt. P. Madhavi Devi, Judicial Member And Shri S. Rifaur Rahman, Accounta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o why the interest earned on bank deposit should not be treated as income from other sources and exemption u/s 80C should not be disallowed. In response, the assessee filed explanations dated 22.1.2015 and 29.01.2015, stating that the funds constitute reserves which have been deposited with State Bank of India as per norms of A.P. Cooperative Society Act, 1964 and that the Society is eligible for deduction under the profits attributable to their activity u/s 80P(1)(2(a)(i) of the I.T. Act and that the provisions of section 80P(2)(d) are not applicable to the society as they are keeping the reserves and temporary surpluses with the nationalized Bank as mandated by law. It was submitted that the interest earned on statutory fund deposits made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al High Court. He placed reliance upon the decision of the jurisdictional High Court in the case of Vavveru Co-operative Rural Bank Ltd, in writ petition Nos. 12727 of 2016 and Batch, dated 15.03.2017, wherein the Hon'ble Court was considering the question as to whether the income derived by the petitioners by way of interest on fixed deposit made in the Bank is to be treated as profit and gains of business attributable to any of the activities indicated in sub-clauses (i) to (vii) of clause (a) of sub-section (2) of section 80P or not. After considering the various decisions/precedents on the issue, including the decision of the Hon'ble Supreme Court in the case of Totgar s Co-operative Sale Society Ltd vs. ITO in reported in (2010 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is in favour of the assessee, while the decision of the Hon'ble Gujarat High Court is against the assessee. However, we find that in the case of SBI vs. CIT, before the Hon'ble Gujarat High Court, the W.P. was filed against the order of the CIT u/s 263 on the question whether the interest income from SBI was exempt u/s 80P(2) of the I.T. Act. The Hon'ble Gujarat High Court has followed the decision of the Hon'ble Supreme Court of India in the case of Totgar s Co-operative Sale Society Ltd vs. ITO to hold in favour of the Revenue. The Hon'ble jurisdictional High Court, in the case of Vavveru Coop.Rural Bank Ltd (cited Supra) has distinguished the decision of the Hon'ble Supreme Court in the case of Totgar s Co-opera ..... X X X X Extracts X X X X X X X X Extracts X X X X
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