TMI Blog2018 (11) TMI 1883X X X X Extracts X X X X X X X X Extracts X X X X ..... of assessee. Deduction u/s. 80P(2)(a)(i) on commission income earned by the assessee from Maharashtra State Electricity Board (MSEB) - As relying on DRONAGIRI NAGRI SAHAKARI PATSANSTHA MARYADIT VERSUS THE INCOME TAX OFFICER, WARD-3, PANVEL [ 2018 (6) TMI 1576 - ITAT PUNE] we set aside the order passed by the learned CIT(A) and direct the Assessing Officer to allow deduction u/s. 80(P)(2)(a)(i) of the Act in respect of commission income also. - Decided in favour of assessee. - I.T.A. No. 6964/Mum/2017 - - - Dated:- 19-11-2018 - S/Shri B.R. Baskaran (AM) Sandeep Gosain (JM) Appellant by: Shri Bhupendra Shah Respondent by: Shri S.K. Bepari ORDER Per B.R. Baskaran (AM) :- The assessee has filed this appeal challenging the order dated 15.9.2017 passed by the learned CIT(A)-3, Thane and it relates to A.Y. 2012-13. Grounds of appeal read as under :- 1) In the facts and circumstances of the case and in law, the learned Assessing Officer erred in disallowing deduction claimed of ₹ 4,28,872/- u/s. 80P(2)(a)(i) of the Act by disregarding the fact that the interest was received on term deposit from SBI. 2) In the facts and circumstances of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oticed that Hon'ble Karnataka High Court has also considered the decision of Todgars Cooperative Sale Society Ltd. (supra) in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. (supra) and held that interest income is attributable to carrying on the business of the assessee and therefore it is liable to be deducted u/s. 80P(2)(a)(i) of the Act. The SMC Bench of the Tribunal in the case of Jaoli Taluk Sahakari Patpedhi Maryadit (supra) has followed the decision rendered by Hon'ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. (supra). For the sake of convenience, we extract below the operative portion of the order passed by the Tribunal in the above said case :- 9. I heard the parties and perused the record. In my view, the decision rendered by Hon'ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd (supra) squarely applies to the facts of the present case. In the case before the Hon'ble Karnataka High Court also, the assessee claimed deduction u/s 80P(2)(a)(i) on the interest income earned from deposits kept with banks on the reasoning that the same shall form part of its b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore, 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)(iii) 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 liability. It was not shown as liability in their account. In fact this amount which is in the nature of profits and gains, was not immediately required by the assessee for lending money to the members, as there were no takers. Therefore they had deposited the money in a bank so as to earn interest. The said interest income is attributable to carrying on the business of banking and therefore it is liable to be deducted in terms of Section 80P(1) of the Act. In fact similar view is taken by the Andhra Pradesh High Court in the case of CIT v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard learned DR and perused the record. We noticed that an identical issue was considered by the Pune SMC Bench in the above cited case and the same has been decided in favour of the assessee with following observations :- 10. After hearing both the learned Counsel for assessee and the learned Departmental Representative for the Revenue, it transpires that similar issue of Electricity Commission arose before the Tribunal in the case of Banganga Nagri Sahakari Patsanstha Ltd. Vs. ITO (ITA No.1521 1522/PN/2015 dated 10-03-2016), wherein it was held as under:- 10. We have carefully considered the rival submissions, orders of the authorities below and case law cited. The short question before us is to determine eligibility of deduction under section 80P of the Act in respect of income earned from certain allied activities viz. (i) Locker Rent; (ii) Ambulance Rent; (iii) Commission on Collection of MSEB bills; and (iv) Health Club by cooperative credit society carrying on banking business. The alternate ground agitated by the assessee is towards ad-hoc estimation of expenses in relation to such income @ 10% of the gross receipt as against actual and proportionate expenses attri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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