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2019 (5) TMI 1052

ORE ] the assessee’s claim for deduction under section 80P(2)(a) in respect of interest income earned from out of bank deposits is restored to the file of the AO for denovo adjudication after examining the facts in the light of the judgments in the case of The Totagars Cooperative Sale Society Ltd., [2010 (2) TMI 3 - SUPREME COURT] and in the case of Tumkur Merchants Souharda Co-operative Ltd., [2015 (2) TMI 995 - KARNATAKA HIGH COURT] - AO shall afford the assessee adequate opportunity of being heard and to file submissions / details required, which shall be duly considered before deciding the issue. - Decided in favour of assessee for statistical purposes. - ITA No.230/Bang/2019 - 15-5-2019 - Shri Jason P. Boaz, Accountant Member Fo .....

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'Income from other sources'. 2. The learned Commissioner (A) erred in confirming the order of the Assessing Officer by not considering the judgment of the Hon'ble High Court of Karnataka when it clearly held that the interest earned by credit co-operative societies on deposits with banks is an income attributable to Business and hence eligible for claim of deduction. 3. The learned Commissioner (A) erred in relying on the decision of the Hon'ble High Court of Karnataka in the case of Totagars Co-operatives Sale Society as the same is not squarely applicable to the case of the appellant as the said judgment is confined only to the facts of the case before the Hon'ble High Court and accordingly cannot be applied in genera .....

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identical issue was considered by the ITAT-Bangalore Bench in the assessee s own case for Assessment Years 2009-10 and 2012-13 (supra). In its order in ITA Nos.2793 and 2794/Bang/2018 dated 25.01.2019, the Co-ordinate Bench at paras 6 to 8 thereof has held as under: 6. I have heard the rival submissions. The learned AR relied on the decision of the Hon'ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Co-operative Society Ltd. Vs. /TO 230 Taxman 309 (Kam) wherein the Hon'ble Karnataka High Court considered the decision of the Hon ble Apex Court in the case of The Totgar's Co- operative Sales Society (supra) and held that interest income in respect of temporary parking of own surplus funds not immediately r .....

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Tile claim of the Assessee was that Co-operative Bank is essentially a Co-operative Society and therefore deduction has to be allowed under Clause (d) of Sec.80P(2) of the Act. The Hon'ble Karnataka High Court followed the decision of the supreme Court in The Totgars Co-operative Sales Society Ltd. (supra) and held that interest earned from Schedule bank or cooperative bank is assessable under the head income from other sources which investments were made remained the same in AY 2007-08 to 2011- 12 and in AY 1991-92 to 1999-2000 decided by the Hon'ble Supreme Court. Therefore, whether the source of funds were Assessee's own funds or out of liability was not subject matter of the decision of the Hon'ble Karnataka High Court .....

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