TMI Blog2021 (11) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee-society was carrying on business of banking and providing credit facilities to its members and also taking deposits from its farmer members. Therefore, accepting deposits on interest is one of the activities of the assessee-society. In the business of banking or credit facilities, not only accepting deposits but also investment of the deposits is also the part of the business activity of such an entity. To invest the deposits accepted from the members or the surplus funds available with it, is part of the banking/credit business of the assessee-society. Therefore, the investment of the surplus amount in the banks by the assessee-society cannot be said to be not related to the business activity of the assessee-society. Theref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s purely a business income, therefore, interest earned from banks eligible for deduction under section 80P(2) of the Income Tax Act, as such his action is baseless and should be quashed. 4. For that on the facts of the case, the Ld. CIT(A) was wrong in dittoing the order of the A.O. and confirming the addition of ₹ 878,270/- on account of interest from Axis Bank IDBI Bank by ignoring rebate u/s 80P(2) under chapter VIA, as such his finding is completely arbitrary, unjustified and illegal. 5. For that the charging interest u/s. 234A at ₹ 45,611/- and u/s. 234B at ₹ 88,539/- are completely arbitrary, unjustified and illegal. 6. For that the appellant reserves the right to adduce any further ground or grounds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... records. The relevant provision of section 80P(2) are reproduced hereunder: 80P. (1) Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub-section (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in subsection (2), in computing the total income of the assessee. (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, or (ii) a cottage industry, or (iii) the marketing of agricultural produce grown by its members, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mentioned by the Assessing Officer in the assessment order itself, the assessee-society was carrying on business of banking and providing credit facilities to its members and also taking deposits from its farmer members. Therefore, accepting deposits on interest is one of the activities of the assessee-society. In the business of banking or credit facilities, not only accepting deposits but also investment of the deposits is also the part of the business activity of such an entity. To invest the deposits accepted from the members or the surplus funds available with it, is part of the banking/credit business of the assessee-society. Therefore, the investment of the surplus amount in the banks by the assessee-society cannot be said to be not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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