2017 (7) TMI 1417

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....nue, the solitary dispute is with regard to the exemption claimed by the assessee under Sec. 80-P of the Act with regard to the interest income earned on fixed deposit with State Bank of India amounting to Rs.83,86,322/-. 3. In brief, the relevant facts are that the assessee is a co-operative credit society, which is engaged in the activity of providing credit facilities to its members after accepting deposits from its members. In the course of assessment proceedings, the Assessing Officer noted that assessee had, inter-alia, earned interest on fixed deposit with State Bank of India of Rs.83,86,322/-, which was not eligible for exemption u/s 80-P(2)(a)(i) of the Act since the said income did not relate to the activity of providing credit f....

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....n u/s 80(2)(d). The AO held that the intent of the legislature was to deny deduction on any other interest. At this stage it is relevant to examine the wordings of sec 80P. sec 80P(1) provides for deduction of those sums from the total income as mentioned in 80P(2). Sec 80P(2) states that the sums referred in sub section (1) are (a) (i) to (vii) and further states that "the whole of the amount of profits and gains of business attributable to anyone or more of such activities". The controversy is therefore whether the interest income earned from SBI (which admittedly is not a cooperative society), could be said to be "attributable" to the business activity of the appellant. In this connection the decision of the Hon'ble ITAT Mumbai Bench....