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TMI Blog2018 (3) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 11,01,302/-. The appellant's case was selected for scrutiny. Notice under Section 143(2) of the Act was issued and served on the appellant. After hearing the appellant, the learned Assessing Officer passed an order under Section 143(3) of the Act determining the tot al income at Rs. 25,08,170/-, denying the deductions under Section 80P(2)(a)(i) of the Act, for interest income earned on bank fixed deposits. Aggrieved by the same, the appellant preferred an appeal before the Commissioner of Income Tax (Appeals)-Hubballi, who partly allowed the appeal of the appellant upholding the order passed by the Assessing Officer inasmuch as denial of deductions under Section 80P(2)(a)(i). However accepted the claim of appellant of cost of fund and administrative expenses in respect of fund invested which had yielded interest income. Aggrieved by the same, to the extent it was against Assessee, the appeal was preferred before the Income Tax Appellate Tribunal, Bengaluru by the Assessee. The Tribunal after hearing the parties, dismissed the Appeal. Hence, this appeal by the Assessee. Relevant substantial questions of law raised are as under : 1. Whether the Tribunal was justified in law in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of banking or providing credit facilities to its members of a Co-operative Society and is liable to be deducted from its gross total income under Section 80P of the Act". Thus, the learned counsel submits that the income derived from the interest is attributable to the activity of carrying on the business of Banking or providing credit facilities to its members by Co-operative Society and has to be deducted from the gross total income under Section 80P(2)(a)(i) of the Act. 6. Secondly, learned counsel submitted that the Assessing Officer computed the income at Rs. 25,08,166/- rounded off to Rs. 25,08,170/-. Considering the total income (as per return of income filed) at Rs. 65,590/-, it is the contention of the learned counsel that interest income on the F.D.R.s. namely F.D.R.s. Karnataka Bank Rs. 11,08,505/-; F.D.R.s. Corporation Bank Rs. 10,05,661/- and F.D.R.s. Ratnakar Bank Rs. 3,38,647/- totaling to Rs. 24,52,813/- was taken into account by the assessee, while computing the consolidated income and expenditure account wherein interest received is shown as Rs. 1,21,52,715.58 ps. and the surplus for the current year being Rs. 11,66,893.94 ps. In the details for interest receive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntial question s of law in favour of the assessee. 9. Learned counsel Sri Y.V. Raviraj appearing for the Revenue would contend that the issue involved herein is no more res-integra in view of the judgment of the Hon'ble Apex Court in Totgar's Co-operative Sale Society Limited supra, whereby the Hon'ble Apex Court has held that interest received only on investment by the Co-operative Societies in the Banks cannot be said to be attributable either to the activity mentioned in Section 80P(2)(a)(i) of the Act or in Section 80P(2)(a)(iii) of the Act. Such income has to be taxed under Section 56 of the Act. In view of the judgment of the Hon'ble Apex Court in Totgar's Co- operative Sale Society Limited supra, the Division Bench judgment of this Court in Tumkur Merchants Souharda Credit Co-operative Limited supra, cannot be made applicable to the case on hand. Hence, Commissioner of Income Tax (Appeals) as well as Tribunal rightly placing reliance on M/s. Totgar's Co-operative Sale Society Limited supra, held that the assessee is not entitled to any deduction under Section 80P(2)(a)(i) of the Act. 10. Nextly, it is submitted that the Division Bench judgment of this Court in The Pr. Comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Banks is entitled for deduction under Sect ion 80P(2)(i)(a) of the Act. It is also pertinent to note that this judgment of the jurisdictional High Court in Tumkur Merchants Souharda Credit Co-operative Limited supra, has reached finality. As submitted by the learned counsel for the assessee, the applicability of this Tumkur Merchants Souharda Credit Co-operative Limited supra to the facts of the present case is not considered by the authorities in a right perspective. The Tribunal proceeded to hold that the Commissioner of Income Tax (Appeals) has considered the judgment of Tumkur Merchants Souharda Credit Co-operative Limited supra as well as M/s. Totgar's Co- operative Sale Society Limited supra and given the benefit of deduction under Section 80P on the interest or dividend received in respect of income by way of deposits with the Co- operative Banks from its investment. The Tribunal proceeded to consider the deduction given under Section 80P(2)(d) of the Act as the deduction under Section 80P(2)(a)(i) of the Act or in other words deduction given under Section 80P(2)(d) of the Act would not further entitle the appellant/assessee to claim deduction under Section 80P(2)(a)(i) of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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