TMI Blog2021 (12) TMI 810X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 80P(2)(a)(i). It is only the interest derived from the credit provided to its members which is deductible under section 80P(2)(a)(i) of the Act and the interest derived by depositing surplus funds with the Banks other than cooperative bank is not being attributable to the business as envisaged under the provisions of the Act. Thus the same cannot be deducted under section 80P(2)(a)(i). No ambiguity that income earned by the assessee on the money deposited with the bank is not eligible for deduction under section 80P(2)(a)(i). As in the case of Mavilayi Service Co-operative Bank Ltd. v. CIT [ 2021 (1) TMI 488 - SUPREME COURT ] by the Hon'ble Supreme Court of India wherein, the primary agricultural credit societies were hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amlesh Makwana, Sr.D.R ORDER PER WASEEM AHMED, ACCOUNTANT MEMBER: The captioned appeals have been filed at the instance of the Assessee against the order of the Learned Commissioner of Income Tax(Appeals)-5, Vadodara, dated 15/07/2019 arising in the matter of assessment passed under s. 143(3) of the Income Tax Act, 1961 (here-in-after referred to as the Act ) relevant to the Assessment Years 2014-15 and 2015-16. 2. The assessee has raised following grounds of appeal: 1.1 The order passed u/s.250 on 15.07.2019 for A.Y.2015-16 by CIT(A)-5, Abad upholding the disallowance of deduction u/s.80P(2)(a)(i) of ₹ 4,75,759/- is wholly illegal, unlawful and against the principles of natural justice. 1.2 The Ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to the assessee from the activities of financing to the members. Thus, the AO computed the proportionate amount of interest of ₹ 4,75,759/- on the deposits from bank other than cooperative bank which was not eligible for deduction under section 80P(2)(a)(i) of the Act. This amount was calculated in the manner as discussed below: Accordingly out of an amount of ₹ 7,98,953/- claimed as deduction u/s.80P(2)(a)(i), amount not qualifying for deduction needs to be worked out. On gross receipts of ₹ 2,47,75,844/- total income is worked out of ₹ 7,98,953/-. As such on gross interest receipt from non credit cooperative societies/banks of ₹ 1,47,53,471/- profit which would not qualify for deduction u/s.80P(2)(a)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court in the case of State Bank of India versus CIT reported in 72 Taxmann.com 64 wherein it was held as under: The Income Tax Appellate Tribunal was also justified in holding that interest income of ₹ 16,14,579/- and ₹ 32,83,410/-respectively on deposits placed with State Bank of India was not exempt under section 80P(2)(a)(i) of the Income Tax Act, 1961. 9.1 In view of the above, it is only the interest derived from the credit provided to its members which is deductible under section 80P(2)(a)(i) of the Act and the interest derived by depositing surplus funds with the Banks other than cooperative bank is not being attributable to the business as envisaged under the provisions of the Act. Thus the same cannot be deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are entitled to the benefit of the deduction contained in section 80P(2)(a)(i), notwithstanding that they may also be giving loans to their members which are not related to agriculture. Also, in case it is found that there are instances of loans being given to nonmembers, profits attributable to such loans obviously cannot be deducted. 9.4 Thus, the profits and gains attributable to non-members arising as a result of advancement of loans was held to be not an allowable deduction under Section 80P(2)(a)(i) of the Act. In view of the above, we do not find any merits in the argument advanced by the learned counsel for the assessee. Thus, we hold that there is no infirmity in the order of the learned CIT (A), requiring any interference. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applicable for the year under consideration i.e. AY 2015-16. The appeal of the Assessee for the assessment 2014-15 has been decided by us vide paragraph Nos. 9 to 9.5 of this order against the Assessee. For detail discussion, please refer the aforementioned paragraphs. The learned AR and the DR also agreed that whatever will be the findings for the assessment year 2014- 15 shall also be applied for the year under consideration i.e. AY 2015-16. Hence, the ground of appeal filed by the Assessee is dismissed. 12. In the result, the appeal filed by the assessee is dismissed. 13. In the result, both the appeals filed by the assessee are dismissed. Order pronounced in the Court on 25/11/2021 at Ahmedabad. - - TaxTMI - TMITax - Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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