TMI Blog2018 (3) TMI 1825X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellant : Md.Usman, CIT(DR) For the Respondent : Shri S.L.Kochar, Advocate Shri Anil Kochar, Advocate ORDER Per N.V. Vasudevan, JM This is an appeal by the Revenue against the order dated 29.09.2016 of C.I.T.(A)-10, Kolkata relating to A.Y.2013-14. 2. The grounds of appeal raised by the revenue read as follows :- (i)That on the facts in the circumstances of the case, the Ld, CIT(A) had erred in law in deleting the addition of ₹ 6,07,21,269/-. made on account of Income from Investment under the head Income from other sources. (ii). That on the facts in the circumstances of the case, the Ld. CIT(A) had erred in law in deletion of addition of ₹ 5,11,980/- made on account of Income from Holiday Home. (iii). That on the facts in the circumstances of the case, the Ld. CIT(A) had erred in law in treating the interest income of ₹ 6,07,21,269/-. received from the Bank deposits by the assessee other than co-operative society is eligible for deduction under section 80P(2)(a)(i) read with section 80P(2)( d) of the 1. T.Act, 1961 ignoring the decision of the Hon'ble Supreme Court in Totgar Co-operative Sales Society Ltd. iv) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ank 3,40,5401- 6 . On recurring deposit with West Bengal State Co-operative Bank 12,28,442/- 7. On recurring deposit with Union Bank Of India 17,96,202/- Total: 7,79,55,152/- It was observed that the interest liability of the society during the year was ₹ 7 .19 crore (approx.) and the total income of the society was ₹ 10.48crore (approx) including interest income from investment in Banks of Rs .7.79crore (approx). Hence the AO concluded that the society had surplus fund available with it which was not immediately required for its business of providing credit 'facilities and the society was in a position to park the surplus fund in Investment. The society kept this fund and surplus fund of earlier years as investment with Union Bank of India, Central Bank of India ( both nationalized bank ) and West-Bengal Co-operative Bank and earned total interest income on this investment amounting to ₹ 7,79,55,152/-. Out of this, interest income of ₹ 1,72,33,883/- was receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uncements:- 1.South Eastern Railway Employees Co-operative Credit Society Limited vs. ACIT (2014) (41 CCH 0218) passed by Hon'ble ITAT, C Bench Kolkata in ITA No- 1693/Kol/2012. The said order has been challenged by the department before the Hon'ble High Court at Calcutta which is pending. 2.Bihar Raj a Sahkari Bhoomi Vikash Co-operative Bank Ltd vs CIT passed by Hon'ble ITAT. 3.Tumukur Merchants Souharda Credit Co-operative Society Ltd by Hon'ble High Court of Karnataka in ITA no.307 of 2014 dated 28.10.2014. 5. It was observed by the Ld.CIT(A) that there are a catena of judgments wherein the case of Totgars Co-operative Sale Society Ltd. ,(supra) has been clearly distinguished on facts, and it has been held that the interest earned by assessees, such as the one at hand, namely a Credit Co-operative Society that carries on business of providing credit facilities to its members and earned interest by deposits made in nationalized banks, would be eligible for the deduction envisaged under Section 80P (2)(a) (1) of the Act. 6. Aggrieved by the order of the CIT(A), the revenue has preferred the present appeal before the Tribunal. 7. The ld. DR submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel for the assessee brought to our notice the decision of ITAT in assessee s own case in ITA No.1340/Kol/2015 for A.Y.2012-13 order dated 18.10.2017 wherein on identical facts the Tribunal after considering the decision of Hon ble Supreme Court in the case of Totgars Co-operative Society (supra) has held that interest earned on deposits with Books is also eligible for deduction u/s 80P(2)(a)(i) of the Act. 9. We have given a very careful consideration to the rival submissions. This Tribunal in assessee s own case in AS.Y.2012-13 dealt with identical issue as to whether the assessee would be entitled to deduction u/s 80P(a)(2)(i) of the Act on interest earned on deposits with bank. The Tribunal held as follows :- 8. We have heard the rival contentions and perused the materials on record. At the outset, we find that the Hon ble Tribunal of Kolkata Benches In ITA NO.2058/Kol/2014 has decided the identical issue in favour of the assessee after distinguishing the facts of Totagars Cooperative Sale Society Ltd. reported in 188 Taxman 282. The relevant extract of the order is reproduced below : 3. After hearing the rival contentions, I find that similar issue has been adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vs Excel Industries 358 ITR 295 wherein the principle of consistency has been reiterated. Hence when the issue has been decided by the Jurisdictional High Court no convincing reason has been pointed to take a different view, any deviation is not permitted. 7.3. Now we come to the case laws relied upon by the Id. CIT(A). As regards the decision of the Hon 'ble Apex Court in the case of Totgars Co-operative Sale Society Ltd. (supra) we find that the said decision is not applicable in the facts of the case. We find that the Hon'ble Apex Court in the said decision in para 11 has itself mentioned that We are confining the judgment to the facts of the present case. The facts of the case were that assessee's business was to provide credit facilities to its members and to market their agricultural produce. In many cases assessee retained sale proceeds of members whose produce was marketed by it and since funds created by such retention were not required immediately for business purposes, it invested same In specified securities and earned interest income. In these circumstances the Hon ble Apex Court had held that interest earned would come in category of 'Income from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterial available on record. In the instant case the assessee has earned income for ₹ 5,11,100/- on the maintenance of holiday homes exclusively for the members. The AO was of the view that the impugned activity is not eligible for deduction under the provision of section 80P(2)(a)(i) of the Act. However the ld. CIT(A) reversed the order of the AO. 13.1 Now the question before us arise for our adjudication whether the assessee is eligible for deduction u/s 80P(2)(a)(i) of the Act on the income earned from holiday homes in the given facts and circumstances. At this juncture we would like to reproduce the provision of section 80P(2)(a)(i) which reads as follows :- 80P(2) The sums referred to in sub-section (1) shall be the following namely :- (a) In the case of a co-operative society engaged in- (i)Carrying on the business of banking or providing credit facilities to its members From the above provision, it is clear that the deduction is available to the assessee from the business of banking or providing credit facilities the members. The issue before us is with regard to the income earned by the assessee from the running and maintenance of holiday homes for the mem ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
