TMI Blog2021 (8) TMI 505X X X X Extracts X X X X X X X X Extracts X X X X ..... ss income. The AO can examine this aspect also in the set aside proceedings. Appeal of the assessee is treated as allowed for statistical purposes. - ITA No.2352/Bang/2019 - - - Dated:- 10-8-2021 - Shri N.V. Vasudevan, Vice President And Shri B. R. Baskaran, Accountant Member For the Appellant : Shri. V. Srinivasan, Advocate For the Respondent : Shri. Kannan Narayanan, JCIT(DR)(ITAT), Bengaluru ORDER PER N.V. VASUDEVAN, VICE PRESIDENT This is an appeal by the assessee against the order dated 30.08.2019 of CIT(A), Bengaluru-6, Bengaluru, relating to Assessment Year 2016-17. 2. The assessee is a society registered under the Karnataka State Cooperative Societies Act, 1959. For Assessment Year 2016-17, the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he operational income and not the other income which accrues to the society. In this particular case the evidence shows that the assessee society earns interest on funds which are not required for business purposes at the given point of time. Therefore, on the facts and circumstances of this case, in our view, such interest income falls in the category of Other Income which has been rightly taxed by the Department u/s 56 of the Act 5.4 Subsequently, the Karnataka High Court, following the binding precedent set by the Hon.Supreme Court, by its later day order in the case of PCIT Vs Totgars Cooperative Society reported in (2017) 395 1TR 611(Kar) held as under : Character and nature of income viz. interest on investment remains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies, facts and circumstances of the case. 2. The learned CIT[A] is not justified in upholding the assessment of interest income of ₹ 1,00,93,101/ - earned by the appellant from investment of funds in cooperative banks on the ground that the said interest income was liable for assessment under the head Other Sources and hence, the same did not form part of the income from business of providing credit facilities to the members that alone was entitled to deduction u/s. 80P[2][a][i] of the Act, under the facts and in the circumstances of the appellant's case. 3. The learned CIT[A] ought to have appreciated that the appellant had earned the interest income of ₹ 1,00,93,101/- from investments statutorily required to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs. 5. On the issue of deduction u/s.80P(2)(a)(i) of the Act, the learned Counsel for the assessee filed before us a decision of the Hon ble ITAT, Bengaluru Bench in the case of Puttur Primary Co-operative Agriculture and Rural Development Bank Ltd., Vs. ITO in ITA No.1449/Bang/2019, order dated 14.06.2021 for Assessment Year 2016-17. According to the learned Counsel for the assessee, the Tribunal has decided identical issue that arises for consideration in this appeal and has remanded the issue for consideration with the following obse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be examined afresh in the light of decision rendered by Hon'ble Supreme Court in the case of Mavilayi Service Co-operative Bank Ltd. (supra). Accordingly, he submitted that this issue may be restored to the file of the A.O. 6. We heard the parties on this issue and perused the record. We find merit in the submission made by Ld. D.R. Since the Hon'ble Supreme Court has settled many issues in the decision rendered by it in the case of Mavilayi Service Co-operative Bank Ltd. (supra) and since the facts prevailing in the instant case needs to be examined afresh in the light of the principles enunciated by Hon'ble Supreme Court in the above said case, we are of the view that the issue of deduction u/s 80P(2)(a)(i) of the Act re ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
