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TMI Blog2014 (10) TMI 996X X X X Extracts X X X X X X X X Extracts X X X X ..... see is exclusively engaged in the business of providing credit facility to its member and hence the entire income of the appellant is eligible for deduction u/s. 80P(2)(a)(i) of Income tax Act. 1.2 The learned AO failed to appreciate that the interest from the deposits with Scheduled / nationalized Bank is nothing but income attributable to providing credit facilities to its members and hence eligible for deduction u/s 80P(2)(a)(i) of the Income Tax Act. 1.3 The learned AO may be directed to allow deduction u/s 80P(2)(a)(i) for the entire income of the appellant. 2.1 Without prejudice to above, if the interest on deposits is treated as income from other source, the learned A.O. may be directed to allow proportionate deduction for inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Rs. 60,86,519/-. The assessee was show caused to explain as to why the deduction under section 80P(2)(a)(i) of the Act was available to it on the interest income derived from the deposits in the bank. Reliance was placed on the ratio laid down by the Hon'ble Supreme Court in the case of The Totgars Co-operative Sale Society Ltd. Vs. ITO reported in (2010) 229 CTR 209 (SC) by the Assessing Officer. The plea of the assessee was that, it was providing credit facilities to its members and during the course of carrying on its business, money was received as deposits from the members. The surplus was parked in deposits with the banks in order to provide for the needs of the depositors for redemption of the deposits on maturity. It was also poi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided the issue in favour of the assessee. The learned Authorized Representative for the assessee has filed the copies of the decision of the Pune Bench of the Tribunal in Niphad Nagari Sahakari Patsanstha Ltd. (supra) on record and the learned Departmental Representative for the Revenue has neither controverted the same nor referred to any contrary decisions. In view thereof and for the sake of consistency, we uphold the plea of the assessee that it is entitled to the claim of the deduction under section 80P(2)(a)(i) of the Act. The relevant findings of the Tribunal in Niphad Nagari Sahakari Patsanstha Ltd., in turn the same was followed in the case of Shri Venkatesh Nagari Sah. Pat Sanstha Maryadit (supra) are as under:- "7...... 11. W ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of sale proceeds of agricultural produce of farmer members marketed by the society. Further, the Hon'ble Apex Court has considered only the latter part of section 80P(2)(a)(i), i.e. income of a cooperative society engaged in providing credit facilities to its members is eligible for deduction and has not considered the earlier part of section 80P(2)(a)(i), i.e. income of a cooperative society engaged in carrying on the business of banking is eligible for deduction. 11.1.... "17. We have carefully considered the submissions of the either party, perused the relevant records and also the case law on which the learned AR had reservation in it's applicably in the circumstances of the assessee's case. 18... ...... 12. In the result ..... X X X X Extracts X X X X X X X X Extracts X X X X
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