TMI Blog2018 (5) TMI 1634X X X X Extracts X X X X X X X X Extracts X X X X ..... two appeals by the assessee are directed against two separate orders of ld. CIT (A), Alwar both dated 04.10.2017 for the assessment years 2013-14 and 14-15 respectively. The assessee has raised common grounds in these appeals except quantum of addition. The ground raised for the assessment year 2013-14 are reproduced as under :- 1. The ld. CIT (A) has erred on facts and in law in confirming the action of in not allowing the deduction in respect of interest receipt of ₹ 2,33,780/- from banks u/s 80P(2)(a)(i) of the IT Act, 1961. 2. The assessee craves to amend, alter and modify any of the grounds of appeal. 3. Necessary cost be allowed to the assessee. 2. The assessee is a Cooperative Society and registered wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and submitted that the Hon ble High Court has held that the interest earned from deposits and from savings bank account by the Co-operative Society providing credit facilities to its members is eligible for deduction under section 80P(2)(a)(i). The ld. A/R has further submitted that the Hon ble High Court has decided this issue after considering the decision of Hon ble Supreme Court in case of M/s. Totgars Co-operative Sale Society Ltd. vs. ITO, 322 ITR 283 (SC). Thus the ld. A/R has submitted that when the assessee has earned the interest in the normal course of its activity providing credit facilities to its members, then the said interest from the savings bank account is eligible for deduction under section 80P(2)(a)(i). 3.1. On the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ):- 80P Deduction in respect of income of co- operative societies:- (1) Where, 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 co-operative society engaged in- ( i) carrying on the business of banking or providing credit facilities to its members, or ( ii) to (vii) ** ** ** the whole of the amount of profits and gains of business attributable to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew, since the expression of wider import, namely, attributable to , has been used, the legislature intended to cover receipts from sources other than the actual conduct of the business of generation and distribution of electricity.' 10. Therefore, the word attributable to is certainly wider in import than the expression 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 facil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee-Society was a liability and it was shown in the balance sheet on the liability side. Therefore, to that extent, such interest income cannot be said to be attributable either to the activity mentioned in Section 80P(2)(a)(i) of the Act or under Section 80P(2)(a)(iii) of the Act. Therefore in the facts of the said case, the Apex Court held the assessing officer was right in taxing the interest income indicated above under Section 56 of the Act. Further they made it clear that they are confining the said judgment to the facts of that case. Therefore it is clear, Supreme Court was not laying down any law. 12. In the instant case, the amount which was invested in banks to earn interest was not an amount due to any membe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... according the Hon ble Supreme Court held that such an amount was retained by the society was a liability and it was shown in the Balance Sheet on the liability side. Therefore, on the specific facts of the said case the interest income was held to be non attributable either to the activities mentioned in section 80P(2)(a)(i) or under section 80P(2)(a)(iii) of the Act. In the case in hand, the interest income received by the assessee is on its own funds and not on the funds which is a liability towards the members. Further, this interest income is earned from the savings bank which is maintained for day to day activity of the assessee society for providing credit facilities to its members. Therefore, following the order of the Hon ble Karna ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
