TMI Blog2019 (9) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... ber For the Appellant : Sh. Ashray Sarna (C.A.) For the Respondent : Sh. Amar Pal Meena (D.R.) ORDER PER B. R. BASKARAN, ACCOUNTANT MEMBER: Both the appeals filed by the assessee are directed against the orders passed by Ld CIT(A)-2, Jalandhar and they relate to the assessment years 2014-15 and 2015-16. 2. The assessee is aggrieved by the decision of Ld CIT(A) in confirming the action of the Assessing Officer in assessing the interest income earned from banks as income under the head income from the other source and thus denying deduction u/s. 80P of the Act thereon. 3. The facts relating to the case are stated i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n ble Supreme Court in the case of Totgars Co-operative Sales Society Ltd. (322 ITR 283) and followed the decision rendered by Hon ble Andhra Pradesh High Court in the case of CIT v. Andhra Pradesh State Co-operative Bank Ltd. (366 ITR 516). The tribunal has held that interest income earned by the credit co-operative society is assessable as profits and gains of business and hence the said income is eligible for deduction u/s. 80P(2)(a)(i) of the Act. 5. I heard the Ld DR and perused the record. I notice that an identical issue was considered by Mumbai SMC Bench of the Tribunal in the case of Gandhinglaj Taluka Sahakari Patpedhi Ltd (supra) and decided the issue in favour of the assessee. For the sake o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2)(a)(i) of the Act. However, sec. 80P(4) was inserted by Finance Act 2006 w.e.f. 1.4.2007 and the same reads as under:- 80P(4) The provisions of this section shall not apply in relation to any cooperative bank other than primary agricultural credit society or primary cooperative agricultural and rural development bank. According to Explanation given under sec. 80P(4), the expressions Co-operative Bank and Primary agricultural credit society shall have the meanings respectively assigned to them in Part V of the Banking Regulation Act, 1949. The expression primary cooperative agricultural and rural development bank means a society having its area of operation confined to a taluk and the principal obje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anks. Accordingly it was submitted that these interest income also derived from carrying on its business activities and hence the same is exempt u/s 80P(2)(a)(i) of the Act. In the alternative, it was submitted that the interest received from deposits kept with Co-operative societies is exempt u/s 80P(2)(d). The Ld CIT(A) was not convinced with the contentions of the assessee and accordingly held that the interest income received from deposits cited above is assessable as income under the head Income from other sources and accordingly held that the deduction u/s 80P(2)(a)(i) is not available to it. In this regard, he placed reliance on the decision rendered by Hon ble Supreme Court in the case of Totgars Co-operative Sale Society Ltd (2010) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning, 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 Cooperative Society which is carrying on the business of providing credit facilities to its members, earns profits and gains of business by providing credit facilities to its members. The interest income so derived or the capital, if not immediately required to be lent to the members, they cannot keep the said amount idle. If they deposit this amount in bank so as to earn interest, the said interest income is attributable to the profits and gains of the business of providing credit faci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 10. In the instant case, the amount which was invested in banks to earn interest was not an amount due to any members. It was not the liability. It was not shown as liability in their account. In fact this amount which is in the nature of profits and gains, was not immediately required by the assessee for lending money to the members, as there were no takers. Therefore they had deposited the money in a bank so as to earn interest. The said interest i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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