TMI Blog2018 (3) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... enhanced to ₹ 25,00,000/- for the purpose of levying income tax without considering the actual figures arrived at by the assessee returned while declaring the taxable income. Hence, on this ground also the computation made by the Assessing Officer requires to be reconsidered. Thus the order of the Tribunal as well as the authorities are set aside and the matter is remanded to the Assessing Officer for fresh consideration. All rights and contentions of the parties are left open. The Assessing Officer shall provide an opportunity of hearing to the assessee and pass appropriate orders in the light of the judgment of the Hon’ble Apex Court. Substantial question of law is not answered. - ITA No. 100004 OF 2018 - - - Dated:- 19-2-2018 - MRS. S. SUJATHA AND MR. JOHN MICHAEL CUNHA JJ. Appellant: (By Sri. A. Shankar, Adv.) Respondent: (By Sri. Y.V. Raviraj, Adv.) S. SUJATHA J. JUDGMENT This appeal is directed against the order of the Income Tax Appellate Tribunal SMC-A Bench: Bengaluru in ITA No.1590/Bang/2016 relating to the assessment year 2012-13, whereby, the appeal filed by the Assessee is dismissed confirming the order of the CIT (Appeals) as well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tumkur Merchants Souharda Credit Co-operative Limited v. The Income Tax Officer, Tumkur, is squarely applicable to the facts of the present case. Section 80P(1) and 80P(2)(a)(i) of the Act reads thus : Deduction in respect of income of co-operative societies. 80P. (1) W here, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub- section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub- section(2), in computing the total income of the assessee. (2) The sums referred to in sub- section(1) shall be the following, namely :- (a) in the case of a co-operative society engaged in (i) carrying on the business of banking or providing credit facilities to its members, or (ii) xxx (iii) xxx (iv) xxx (v) xxx (vi) xxx (vii) xxx whole of the amount of profits and gains of business attributable to any one or more of such activities. 5. The phrase attributable to was considered by this Court in Tumkur Merchants Souharda Credit Co- operative Limited supra , placing reliance on the Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts and circumstances of the case. 8. Nextly, it was contended that Tribunal is not justified in not correctly determining the income from business and not giving set-off of such loss from regular business against the interest income determined under other sources. Thus, it is submitted that even not admitting, but assuming the judgment of the Hon ble Apex Court in Totgar s Co-operative Sale Society Limited v. The Income Tax Officer, Sirsi, reported in (2010) 322 ITR 283 SC : (2010) 3 SCC 223 is applicable to the facts of the case, in terms of paragraph 14 of the said judgment, the Tribunal ought to have examined whether it was right in law for the Tribunal that the income by way of interest on deposits held with Scheduled banks, bonds and other securities was chargeable to tax under Section 56 under the head In come from other sources without allowing any deduction in respect of cost of funds and proportionate administrative and other expenses under Section 57 without considering the deduction to which the assessee is entitled to under Section 57 of the Act. The Authorities as well as the Tribunal proceeded to apply the judgment of M/s. Totgar s Co- operative Sale Society ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e income of ₹ 25,08,166/- adding the interest on the fixed deposit at ₹ 24,52,813/- which was already taken into account by the assessee in the consolidated income and expenditure account in reflecting the interest received at ₹ 1,21,52,715.58 ps. requires to be reconsidered. Similarly it is also submitted that in terms of the judgment of the Hon ble Apex Court in the case of Totgar s Co-operative Sale Society Limited supra even the matter if remanded to the Assessing Officer for reconsideration to determine the proportionate cost of funds and administrative and other expenses to be deducted under Section 57 of the Act, the same would not be of any assistance to the assessee since the said expenditure has already been reflected in profit and loss account and has been claimed and given deduction by the Assessing Officer. 12. We have given our thoughtful consideration to the arguments advanced at the bar and perused the material on record. 13. The Co-ordinate Bench of this Court in Tumkur Merchants Souharda Credit Co-operative Limited supra has categorically observed that the interest earned by the society in investing in the Banks is attributable to the activ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case, it was obligatory on the part of the Tribunal being a last fact finding authority to examine the factual aspect in respect of the proportionate costs and administration expenses to be incurred by the appellant regarding the interest earned under Section 56 of the Act and the availability of deduction under Section 57 of the Act to the assessee. This exercise also not being done by the Tribunal merely upholding the order of the Commissioner of Income Tax as well as the Assessing Officer is wholly unsustainable. 14. The judgment relied upon by the learned counsel for the revenue in the case of Totgar s Co-perative Sale Society Limited supra, deals with Section 80P(2)(d). As aforesaid, Section 80P(2)(d) and Section 80P(2)(a)(i) of the Act being different, the said judgment is not squarely applicable to the facts of the present case. The applicability of Section 80P(2)(a)(i) of the Act has to be considered in terms of the said section. The authorities mixing up the issue of Section 80P(2)(a)(i) and Section 80P(2)(d) cannot reject the claim of the assessee under Section 80P(2)(a)(i) of the Act without giving a proper finding on the issue. 15. It is prima facie a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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