TMI Blog2021 (2) TMI 101X X X X Extracts X X X X X X X X Extracts X X X X ..... Pragati gramina bank, in order to maintain the overdraft limit available to assessee with state bank of Mysore. Respectfully following the decision in case of Tumkur Merchants Souharda Credit Co-operative Society Ltd vs ITO [ 2015 (2) TMI 995 - KARNATAKA HIGH COURT ] , we are of the opinion that interest earned on such deposit would partake the character of business income attributable to carrying on business of banking and is eligible for deduction under section 80P - Decided in favour of assessee. - ITA No.1290/Bang/2019 - - - Dated:- 2-2-2021 - Shri. Chandra Poojari, Accountant Member And Smt. Beena Pillai, Judicial Member For the Assessee : Shri S.V Ravishankar, Advocate For the Revenue : Shri Priyadarshi Mishra, Addl. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at may be urged at the time of hearing of appeal, the appellant prays that the appeal may be allowed for the advancement of substantial cause of justice and equity. Brief facts of the case are as under: 2. The assessee is a co-operative society engaged in the business of providing facilities to its members, marketing of agricultural produce grown by its members and supplying agricultural implements, seeds fertilisers except to its members. The assessee claimed deduction under section 80 P (2) (a), (iii) and (vi) of the Act in respect of these income. The Ld.AO observed that assessee withdrew sum of ₹ 10.60 crores from State bank of Mysore overdraft account and made deposit of ₹ 10 crore with Pragati Gramina bank. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat assessee had drawn sum of ₹ 10.60 crores on 30/03/2012 from state bank of Mysore OD account and maintain the deposit with Pragati gram in a bank to the tune of ₹ 10 crores. It was submitted that the closing balance of Pragati Gramina Bank as on 31/03/2012 was ₹ 10,00,29,570/- and closing balance of the above deposit as on 31/03/2013 was ₹ 10,99,76,208/-. He submitted that the interest earned on the above deposit during the financial year was ₹ 1,10,51,821/- and TDS of ₹ 11,05,182/- was deducted. The Ld.AR submitted that, there is a clear nexus between the withdrawal and deposit of funds from OD account to Pragati Gramina Bank and that the interest earned was attributable to the business of assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned from a short term deposit with Pragati gramina bank. Present assessee is a cooperative bank that provides credit facilities to its members. The interest income earned by assessee by providing credit facility to its members. It has been submitted that an amount of ₹ 10.60 crores was withdrawn in order to maintain the OD limit of ₹ 25 crores allowed to assessee. We note that the Ld.AO estimated the interest attributable to ₹ 10 crores as assessee deposited ₹ 10 crores with Pragati Gramina Bank and ₹ 60 Lacs was used for business purposes which is undisputed. 15. Hon ble Karnataka High Court in case of Tumkur Merchants Souharda Credit Co-operative Society Ltd vs ITO (supra) was deciding identical issue. Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iew, since the expression of wider import, namely, attributable to , has been used. the legislature intended to cover receipts from sources other than the actual conduct of the business of generation and distribution of electricity.' 8. Therefore. the word attributable to is certainly wider in import than the expression derived from Whenever the legislature wanted to give a restricted meaning, 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty was a liability and it was shown in the balance sheet on the liability side. Therefore, to that extent, such interest income cannot be said to be attributable either to the activity mentioned in Section 80P(2)(a)(i) of the Act or under Section 80P(2)(a)(111) of the Act. Therefore in the facts of the said case. the Apex Court held the assessing officer was right in taxing 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 li ..... X X X X Extracts X X X X X X X X Extracts X X X X
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