TMI Blog2019 (9) TMI 1289X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Hon'ble Karnataka High Court in the decision cited by the learned DR. To this extent the decision in the case of Tumukur Merchants Souharda Co-operative Ltd. [ 2015 (2) TMI 995 - KARNATAKA HIGH COURT] still holds good. Hence, on this aspect, the issue should be restored back to the AO for a fresh decision after examining the facts in the light of these judgment of the Hon'ble Apex Court rendered in the case of The Totgars Co-operative Sale Society Ltd. [ 2010 (2) TMI 3 - SUPREME COURT] and of Hon'ble Karnataka high Court rendered in the case of Tumukur Merchants Souharda Co-operative Ltd. [ 2015 (2) TMI 995 - KARNATAKA HIGH COURT] AO will afford adequate opportunity of being heard to the Assessee and for filin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessable under the head Income from Business . Interest earned on investment of surplus funds not immediately required in short term deposits and securities by a Co-operative Society providing credit facilities to members or marketing agricultural produce to members is not business income but income from other sources and the society is not entitled to special deduction. 4. While learned AR relied on the decision of the Hon ble Karnataka High Court in the case of Tumukur Merchants Souharda Credit Co-operative Ltd., 230 taxman 309 (Karn), the DR relied on a subsequent decision of the Hon ble Karnataka High Court in the case of PCIT Vs. Totgars Co-operative Sale Society Ltd., 395 ITR 611 (Karn.). We have carefully gone through t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that interest earned from Schedule bank or cooperative bank is assessable under the head income from other sources and therefore the provisions of Sec.80P(2)(d)of the Act was not applicable to such interest income. It is thus clear that the source of funds out of 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 in the decision cited by the learned DR. To this extent the decision of the Hon'ble Karnataka High Court in the case of Tumukur Merchants Souharda Co-operative Ltd. (s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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