TMI Blog2021 (9) TMI 401X X X X Extracts X X X X X X X X Extracts X X X X ..... MP No.64/Bang/2021 [in ITA No.129/Bang/2020] - - - Dated:- 6-9-2021 - Shri Chandra Poojari, Accountant Member For the Appellant : Shri Guruprasad K.S., CA For the Respondent : Shri Ganesh R. Ghale, Standing Counsel for Dept. ORDER This miscellaneous petition by the assessee seeks rectification of the order of the Tribunal dated 9.4.2021 stating as follows:- 1. The above appeal i.e. ITA No. 129/Bang/2020 was disposed of by this Hon'ble Tribunal together with another appeal ITA No. 128/Bang/2020 vide order dated 9th of April 2021. The appeal was allowed in favour of the Appellant and the substantial question of law involved in the matter, which was common to both AYs was decided in favour of the Appellant. However, one of the grounds of appeal raised and argued before the Hon'ble Tribunal as regards ITA No. 129/Bang/2020 has not been adjudicated. This appears to have been left out inadvertently. Therefore, the Appellant begs to present this miscellaneous application for adjudication of one of the grounds urged and argued before the Hon'ble Tribunal. 2. For the sake of easy reference Ground No. 3, urged before the Hon'ble Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction u/s.80P(2)(d) of the Act cannot be allowed to the assessee. The Hon ble Court followed decision of Hon ble Gujarat High Court in the case of SBI Vs. CIT 389 ITR 578 (Guj.). The Hon ble Court had to deal with the following substantial question of law: (I) Whether the assessee, Totgar Co-operative Sale Society, Sirsi, is entitled to 100% deduction under Section 80P(2)(d) of the Income Tax Act, 1961 (for short 'the Act') in respect of whole of its income by way of interest earned by it during the relevant Assessment Years from 2007-2008 to 2011-2012 on the deposits or investments made by it during these years with a Cooperative Bank, M/s. Kanara District Central Co-operative Bank Limited? (II) Whether the Supreme Court decision in the case of the present respondent assessee, Totgar Co-operative Sale Society Limited itself rendered on 08th February 2010, in Totgar's Cooperative Sale Society Limited v. Income Tax Officer, reported in (2010) 322 ITR 283 SC : (2010) 3 SCC 223 for the preceding years, namely Assessment Years 1991-1992 to 1999- 2000 (except Assessment Year 1995-1996) holding that such interest income earned by the assessee was taxable under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nterest income earned by the respondent-assessee, a cooperative Society from a Co-operative Bank. This exclusion by Section 80P(4) of the Act even though without any amendment in Section 80P(2)(d) of the Act is sufficient to deny the claim of the respondent assessee for deduction under Section 80P(2)(d) of the Act. The only exception is that of a primary agricultural credit society. (Paragraph-14 of the judgment) (3) The amendment of Section 194A(3)(v) of the Act excluding the Cooperative Banks from the definition of Co- operative Society by Finance Act, 2015 and requiring them to deduct income tax at source under Section 194A of the Act also makes the legislative intent clear that the Co-operative Banks are not that specie of genus co-operative society, which would be entitled to exemption or deduction under the special provisions of Chapter VIA in the form of Section 80P of the Act. (Paragarph 15 of the Judgment) (4) If the legislative intent is so clear, then it cannot contended that the omission to amend Clause (d) of Section 80P(2) of the Act at the same time is fatal to the contention raised by the Revenue before this Court and sub silentio, the deduction should c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived from marketing agricultural produce of its members which was retained in many cases and invested in short term deposit/security and that the said decision was confined to the facts of the said case and did not lay down any law. The Hon ble Gujarat High Court held that in the case of Totgars Cooperative Sale Society (supra) decided by Hon ble Supreme Court, the court was dealing with two kinds of activities: interest income earned from the amount retained from the amount payable to the members from whom produce was bought and which was invested in short-term deposits/securities; and the interest derived from the surplus funds that the assessee therein invested in short-term deposits with the Government securities. The Hon ble Gujarat High Court in this regard referred to the decision of the Karnataka High Court from which the matter travelled to the Supreme Court wherein it was the case of the assessee that it was carrying on the business of providing credit facilities to its members and therefore, the appellant-society being an assessee engaged in providing credit facilities to its members, the interest received on deposits in business and securities is attributable to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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