TMI Blog2022 (9) TMI 475X X X X Extracts X X X X X X X X Extracts X X X X ..... ty, such interest income, partakes the same character as the business income of the cooperative society. In the present case, the material on record does not indicate the source of funds for making FDs in Syndicate Bank. Therefore, we are of the considered opinion that the matter requires to be remanded to the file of the Assessing Officer to decide the issue of eligibility of the interest income for exemption under the provisions of section 80P of the Act in terms of the decision of this Tribunal in NASHIK ROAD NAGARI SAHKARI PATSANSTHA LIMITED [ 2021 (12) TMI 1259 - ITAT PUNE] - Thus, the grounds of appeal filed by the assessee stands partly allowed. - ITA No.1138/PUN/2019 - - - Dated:- 8-9-2022 - Shri S. S. Godara, Judicial Memb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring in accordance with the provisions of law. 4) The appellant craves to leave, add/amend or alter any of the above grounds of appeal. 3. Briefly, the facts of the case are as under :- The appellant is a cooperative society registered under the Maharashtra Co-operative Act, 1960 and formed for collective disposal of labour. The return of income for the assessment year 2013-14 was filed on 28.09.2013 declaring total income of Rs.5,65,301/- after claiming deduction u/s 80P(2)(a)(vi) of the Income Tax Act, 1961 ( the Act ). Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-2(1), Kolhapur ( the Assessing Officer ) vide order dated 21.03.2016 passed u/s 143(3) of the Act at a total inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. 9. Considering the above submissions, we condone the delay and proceed to dispose the appeal on merits. 10. We heard the ld. CIT-DR and perused the material on record. The issue in the present appeal relates to the taxability of interest income earned by cooperative society from Syndicate Bank. During the previous year relevant to the assessment year under consideration, the appellant society earned interest income of Rs.82,78,245/- on FDs with Syndicate Bank. Admittedly, these fixed deposits were not made for the purpose of procurement of bank guarantee for its business purpose. The material on record clearly does not indicate the source of the investments. It is settled position of law that if the FDs are placed out of the surplu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f India Vs. CIT 389 ITR 578 (Guj.), the Hon ble Delhi High Court in the case of Mantola Co-operative Thrift Credit Society Ltd. Vs. CIT 50 taxmann.com 278, the Hon ble Punjab Haryana High Court in the case of CIT Vs. Punjab State Cooperative Agricultural Development Bank Ltd. 389 ITR 68 and the Hon ble Kolkata High Court in the case of CIT Vs. Southern Eastern Employees Cooperative Credit Society Ltd. 390 ITR 524 took a view that the income arising on the surplus invested in short term deposits and securities cannot be attributed to the activities of the society and, therefore, not eligible for exemption u/s.80P(2)(a)(i) of the Act. However, the Hon ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X
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