TMI Blog2018 (3) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the order dated 30.9.2016 of CIT(A)- 9, Kolkata, relating to AY 2013-14. 2. The grounds of appeal raised by the revenue reads as follows: 1 . That in the facts and circumstances of the case, the Ld. CIT(A)-9, Kolkata erred in law by allowing deduction u1s.80P(2)(a)(i) and 80P(2)(d) of the Act to the assessee for which it was not entitled under the said section. 2. That in the fact and circumstances of the case the Ld. CIT(A)-9, Kolkata is not correct in allowing the deductions u/s.80P(2)(a)(i) of the Income Tax Act. 3. That in the fact and circumstances of the case the Ld. CIT(A)-9, Kolkata failed to appreciate the facts and came to the wrong conclusion that the money earned by the assessee from deposits fall within the meaning of 'Profit and gains of business' whereas the interest earned on such investment falls within the category of income from other source. 4. The Ld. CIT(Appeals) failed to fully appreciate and take full cognizance of all the material facts of the order while giving relief to the assessee in respect of section u/s.80P(2)(a)(i) of the Income Tax Act. 5. Any other ground of appellant craves leave to submit on or before the hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td vs ITO 322 ITR 283 (SC) interest earned on deposits had to be regarded as income under the head Income from other sources and therefore deduction u/s 80P(2)(a)(i) of the Act cannot be allowed to the assessee as only the whole of the amount of profits and gains of business attributable to carrying on the business of banking or providing credit facilities to its members is allowed as deduction under the said provision. According to the AO the aforesaid income is not derived from the business of providing credit facility to its members. Applying the decision in the case of Totgar s Co-operative Sale Society Ltd vs ITO (supra), the AO treated the interest income as income from other sources and accordingly denied the benefit of deduction u/s 80P(2)(a)(i) of the Act. 5. Aggrieved by the orders of AO, the Assessee preferred appeal before CIT(A). The CIT(A) held that interest income had to be assessed under the head income from business and that the the Assessee was entitled to deduction u/s.80P(2)(a)(i) of the Act on the interest income in question. In doing so, he followed his own order in Assessee s own case in AY 2012-13 wherein he had allowed similar claim of the Assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foresaid case the identical question as to whether interest income had to be regarded as income from business or income from other sources had come up for consideration. The Assessee in the aforesaid decision accepted loans and deposits from its members and utilized the same towards providing loans and credit facilities to its members. However excess funds were utilized in making deposits in banks and investments. The Tribunal relying upon the decision rendered by the Hon ble Calcutta High Court in the case of CIT vs South Eastern railway Employees Co-operative Credit Society in G.A.No.1838 of 2010 dated 22.07.2010 came to the conclusion that interest income has to be regarded as income from business of banking and is entitled for deduction u/s 80P(2)(a)(i) of the Act. The Tribunal had also distinguished the decision rendered by the Hon ble Supreme Court in the case of Totgar s Co-operative Sale Society Ltd vs ITO (supra). The following observations of the Hon ble Tribunal read as under :- 7.1. We further find that the issue involved is covered in favour of the assesee by catena of decisions of the Tribunal in assessee s own case. These decisions are also affirmed by the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifferent view. Under these circumstances, we feel that when the Commissioner of Income Tax (A) as well as the Tribunal has followed the earlier unchallenged decision no question of law is involved in this matter. Nothing has been produced before us to show subsequent decision of the Tribunal in relation to the assessment years 1998-99 to 2002- 03 and 2003-04 have been challenged by any of the parties before this Court. It is submitted by Mr.Bhowmick that there has been challenge of the decision in relation to assessment years 1995-96, 1996-97 and the same is pending before this Court we think that challenge of the assessee has now become redundant as the earlier view taken in both the assessment years have been reversed by the Tribunal by its subsequent decision. Hence, the pendency of that earlier matter is of no consequence in this matter. Had there been a challenge of the decision of the Tribunal in relation to the assessment years 1998- 99 to 2002-03 and also 2003-04 to 2004-05 the matter would have been different. The revenue did not take any step whatsoever. Therefore, we presume the revenue has accepted the subsequent view of the Tribunal and the same now hold th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee by the decision of the Tribunal and the Jurisdictional High Court in assessee s own case. The decision relied upon by the ld. CIT(A) are not applicable in the facts of the case. The principle of consistency as conveyed by the Hon ble Apex Court mandates that the Revenue does not take a different stand. Accordingly we set aside the orders of the authorities below and decide the issue in faovur of the assessee. 6.1. Respectfully following the above decision and taking down the fact that interest income in the present case is identical to the interest income received by the assessee in the decision referred to above. I hold that the assessee is entitled to deduction u/s 80P(2)(a)(i) of the Act in respect of the interest income. 13. The aforesaid view has also been followed by the Tribunal in I.T.A.Nos.737-742/Kol/2011for Assessment Years : 1996-97 to 2001-02 in the case of A.C.I.T., Circle-56, -vs.-The West Bengal State Co-operative Bank Ltd. 14. The Hon ble Karnataka High Court had also an occasion to examine the scope of Sec.80P(2)(a)(i) of the Act, in the light of the decision of the Hon ble Supreme Court in the case of Totagar Co-operative Societ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... derived from . Whenever the legislature wanted to give a restricted meaning, they have used the expression derived from . The expression attributable to being of wider import, the said expression is used by the legislature whenever they intended to gather receipts from sources other than the actual conduct of the business. A Co-operative Society which is carrying on the business of providing credit facilities to its members, earns profits and gains of business by providing credit facilities to its members. The interest income so derived or the capital, if not immediately required to be lent to the members, the society cannot keep the said amount idle. If they deposit this amount in bank so as to earn interest, the said interest income is attributable to the profits and gains of the business of providing credit facilities to its members only. The society is not carrying on any separate business for earning such interest income. The income so derived is the amount of profits and gains of business attributable to the activity of carrying on the business of banking or providing credit facilities to its members by a co-operative society and is liable to be deducted from the gross t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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