TMI Blog2019 (6) TMI 1212X X X X Extracts X X X X X X X X Extracts X X X X ..... Co-operative Bank Limited c [ 2016 (7) TMI 1405 - ITAT COCHIN] had held that such interest income received by the assessee should be assessed as income from business instead of income from other sources . In view of the order of the co-ordinate bench, we hold that the CIT(A) is justified in holding that interest income received by the assessee should be assessed as income from business . Grant of deduction u/s. 80P(2)(i)(a) of the Act, the Assessing Officer shall follow the law laid down by the Larger Bench of the Jurisdictional High Court in the case of Mavilayi Service Co-operative Bank Ltd. vs. CIT [ 2019 (3) TMI 1580 - KERALA HIGH COURT] and examine the actual activities of the assessee so as to grant deduction u/s. 80P(2)(i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of deduction u/s. 80P of the Act: (i) The Ld. CIT(A) ought to have noticed that the respondent is essentially a Co-operative Bank and not merely a primary agricultural credit society and hence the allowance of deduction u/s. 80P to the respondent assessee while computing the total income was irregular in nature and also against law. (ii) The case of M/s. Chirakkal Service Co-operative Bank Ltd. on which the ld. CIT(A) relied upon is contested by the Department and the issue has been referred to a full bench by the Hon ble High Court of Kerala, the decision of which is still awaited. (iii) The Ld. CIT(A) ought to have considered the judgment of Hon'ble Supreme Court in the case of Citize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has invested surplus funds like an ordinary investor and it has to be taxed as income from other sources? (iv) in not duly considering the decision of the Apex Court in 322 ITR 283 in the case of M/s Totgars Co-operative Sales Society. 4. For these and other grounds that may be advanced at the time of hearing the order of the learned Commissioner of Income-tax(Appeals), Trivandrum on the above points may be set aside and that of the Assessing Officer restored. 4. The facts of the case are that the assessee is a Co-operative Society engaged in banking business and filed its return of income for AY 2011-12, 2014-15 2015-16 declaring total income for the years at Rs. Nil after claiming d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R relied on the order of the Assessing Officer. 7. We have heard the Ld. DR. In our opinion, the issue was considered by the Jurisdictional High Court in the case of Mavilayi Service Co-operative Bank Ltd. vs. CIT reported in ITA No.97/2018 dated 19.03.2019 wherein it was held that the Assessing Officer is not obliged to grant deduction by merely looking at the certificate of registration issued by the competent authority under the Co-operative Societies Act. Instead, he has to conduct an enquiry into the factual situation as to the activities of the assessee and arrive at a conclusion whether the benefits of section 80P can be extended or not. Thus, the Full Bench overruled the earlier judgment of the Jurisdictional High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Ld. DR relied on the order of the Assessing Officer. 10. We have heard the Ld. DR. With regard to the interest income earned by the assessee from other Banks and Treasury on which deduction u/s. 80P(2)(i)(a) of the Act is to be granted, there is no dispute that the assessee has made investments in the course of banking activities and such interest income was received on investments made with cooperative banks and other scheduled banks. The coordinate bench of the Tribunal in the case of Kizhathadiyoor Co-operative Bank Limited cited supra had held that such interest income received by the assessee should be assessed as income from business instead of income from other sources . In view of the order of the co-ordinate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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