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TMI Blog2023 (6) TMI 1273X X X X Extracts X X X X X X X X Extracts X X X X ..... involved in all the appeals are identical, hence these have been heard together and are being disposed of by this common order. The appeal in ITA No.546/Kol/2022 for assessment year 2015-16 is taken as lead case for the purpose of narration of facts. 2. ITA 546/Kol/2022 - The assessee has taken the following grounds of appeal: "1. For that on the facts and circumstances of the case and in law, the disallowance of claim of deduction u/s. 80P(2)(a)(i) by the assessee credit cooperative society is wrong, arbitrary, misconceived, erroneous, excessive and deserves to be allowed. 2. For that on the facts and circumstances of the case and in law, the assessment of interest income of Rs. 14156300 under Income from Other Sources instead of unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or submit additional ground/grounds of appeal at the time of hearing of appeal." 2. Ground No.1 to 3 - The brief facts of the case are that the assessee is an cooperative credit society and is a primarily engaged in providing credit facilities to its members. The assessee during the year claimed deduction u/s 80P of the Act not only from the interest income earned from the credits given to its members but also in respect of interest income earned from the funds parked/invested in the commercial bank i.e United Bank of India. However, the Assessing Officer disallowed the deduction claimed u/s 80P of the Act in respect of the interest income earned from the funds invested in the United Bank of India stating that the said interest income was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resaid statutory deposits which were essential for running the business of the society of providing credit facilities to its members are therefore allowable as deduction u/s 80P(2) of the Act. The ld. Counsel for the assessee has further submitted that even otherwise, the assessee may be allowed deduction of interest expenditure incurred on the funds which were deposited in the commercial bank. 4. The ld. DR, on the other hand, has relied upon the findings of the lower authorities. 5. We have considered the rival contentions. We find that so far as the issue of claiming of deduction u/s 80P of the Act on the interest income earned by parking the surplus funds in the commercial bank is concerned, the issue is squarely covered against the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also been rightly rejected by the lower authorities in the light of the aforesaid decision of the hon'ble Supreme Court in the case of Totgar's Co-operative Sale Society Ltd. vs. ITO (supra). So far as the third contention of the ld. counsel for the assessee that the assessee u/s 81 & 82 of the West Bengal Co-operative Societies Act, 2006, is statutorily required to create and maintain bad debts fund and reserve fund out of the profits of the cooperative society and that the interest earned from the said statutory bad debts fund and reserve fund is intrinsically linked with the business activity of providing credit facilities to its members is concerned, we find that the said issue is squarely covered by the decision of the Jurisdictional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefit u/s 80P on that interest income and (b) to ascertain the interest paid to the members for the purpose of earning the interest on the funds deposited in the commercial bank and to allow deduction of such interest from the interest income earned by the assessee from investment in the commercial bank and (c) to subtract/deduct such interest from the expenses of eligible business and the consequent increased amount of profits of eligible business will be eligible as deduction u/s 80P of the Act. Thus, Ground Nos.1 to 3 are accordingly partly allowed in favour of the assessee. 7. Ground No.4 & 5 - The brief facts relevant to the issue are that the assessee apart from business of providing credit facilities to is members also maintained ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. In this case, the holiday homes maintained and run by the assessee are not in course of normal letting out of the buildings, rather, the same were run on commercial lines and the assessee has incurred daily business expenses and charges on business lines as detailed above. Therefore, the income from holiday homes is to be treated as business income of the assessee and consequential deduction of business expenditure and admissible claim of depreciation etc. is required to be given. However, so far as the claim of the assessee that the building of holiday homes has been purchased out of eligible income of the assessee after claiming deduction u/s 80P of the Act, therefore, the income of the holiday homes should also be allowed a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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