TMI Blog2019 (8) TMI 451X X X X Extracts X X X X X X X X Extracts X X X X ..... n prohibited to carry out the banking business. In such situation, inherently, it is entitled for exemption u/s 80P(2)(a)(i) being a cooperative credit society. But such exemption will be only on the activities confined to a cooperative credit society viz. if an assessee has earned interest income from its members, it may qualify for grant of exemption u/s 80P(2)(a)(i). If it has earned any other income from its activities as a cooperative society, for which it existed, then the income on such activity would also qualify. In the present years, the assessee has only interest income from the deposits made with nationalized bank. Such interest income does not qualify for grant of exemption u/s 80P(2)(a)(i) as held by the Hon ble jurisdictional High Court in the case of SBI Employees Co-op. Credit Supply Society Vs. CIT, [ 2016 (7) TMI 516 - GUJARAT HIGH COURT] that it is the only interest derived from the credit provided to its members, which is deduction under section 80P(2)(a)(i), and the interest derived by depositing surplus with nationalized banks not being attributable to the business carrying on by the assessee, could not be deducted under section(2)(a). In view of the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 4, Vadodara has erred in law and on facts of the case in treating interest receipt of ₹ 68,02,038/- as income from other sources and not allowing set off of earned forward loss u/s.72(1) of the I.T. Act, 1961 and carried forward depreciation. 3. The Learned Commissioner of Income Tax (Appeals)-4, Vadodara has erred in law and on facts of the case in confirming the addition made by the Assessing Officer in respect of DICGC interest payable of ₹ 14,95,276/-. 4. The Learned Commissioner of Income Tax (Appeals)- 4, Vadodara has erred in law and on facts of the case in confirming the addition of ₹ 12,65,852/- being profit on sale of Lockers and Vault as income from other sources though the same is business income u/s.50 of the I.T. Act, 1961. ITA No.102/Ahd/2017 [Asstt.Year 2012-13] 1. The Learned Commissioner of Income Tax, (Appeals)-4, Vadodara has erred in law and on facts of the case in treating gross income of interest of ₹ 1,37,00,110/- as income from other sources. 2. The Learned Commissioner of Income Tax, (Appeals)-4, Vadodara has erred in law and on facts of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection has been filed on page no.25 to 28 of the paper book. The ld.AO has considered this objection, but rejected them vide his order dated 21.5.2014. Copy of such order is filed on page no.29 of the paper book. Thereafter, the ld.AO has passed an assessment order on 10.3.2015 under section 143(3) r.w.s. 1247. Against this assessment, assessee carried the matter in appeal before the ld.CIT(A) and took one of the grounds challenging reopening of the assessment. The ld.CIT(A) has gone through the reasons as well as the order of the AO, vide which objection of the assessee has been rejected. The ld.CIT(A) has upheld the reopening of the assessment. 4. With the assistance of the ld.representatives, we have gone through the record carefully. Before us, though the copy of reasons have not been placed on record, but with help of objections filed by the assessee vis- -vis order of the AO vide which its objection against the reopening has been rejected. It was contended that assessment has been reopened merely on the basis of change of opinion. The ld.counsel for the assessee submitted that whether income of the assessee is to be assessed as business income or income from ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be considered eligible for exemption under section 80P(2)(a)(i). In her alternative contentions, she submitted that in case it is not admissible on gross basis, then only net interest income be excluded from the grant of exemption under section 80P(2)(a)(i). 8. On the other hand, the ld.DR relied upon the order of the Revenue authorities. He pointed out that the assessee has stopped banking business due to liquidation, and therefore, whatever interest income it has earned, it is to be treated as income from other sources. 9. We have duly considered rival submissions and gone through the record carefully. No doubt the status of the assessee as a cooperative credit society is intact. It has been prohibited to carry out the banking business. In such situation, inherently, it is entitled for exemption under section 80P(2)(a)(i) being a cooperative credit society. But such exemption will be only on the activities confined to a cooperative credit society viz. if an assessee has earned interest income from its members, it may qualify for grant of exemption under section 80P(2)(a)(i). If it has earned any other income from its activities as a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d loss. Therefore, it is not entitled for carry forward of such business loss. The authorities have rightly rejected its claim. 14. In the Asstt.Year 2014-15 under ground no.4, the assessee has pleaded that the ld.CIT(A) has erred in confirming the addition of ₹ 12,65,852/-. 15. Brief facts of the case are that the assessee has shown the above amount as profit on sale of locker and vault income. According to the assessee it is a business income and not to be assessed as income from other sources. Being a credit society, its activity ought to be confined to its members. If any activity carried out beyond the scope of society, the income from that activity will not qualify for exemption under section 80P(2)(a)(i). Even if this profit on sale of locker and vault is to be treated as business income under section 50 of the Act, then also nothing would change. It will not qualify for exemption under section 80P(2)(a)(i) of the Act. It is to be assessed as a separate income. The assessee failed to demonstrate that it was carrying on an organized activity in the nature of business, and therefore, the ld.Revenu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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