TMI Blog2011 (11) TMI 886X X X X Extracts X X X X X X X X Extracts X X X X ..... income of the assessee as it is not covered u/s 80P(2)(a)(i) of the I.T. Act, 1961. 2. During hearing of this appeal, we have heard Shri Arun Dewan, learned Sr. DR and Shri S.S. Deshpande, learned counsel for the assessee. At the outset, the learned counsel for the assessee contended that the impugned issue is covered by the decision of Tribunal, that too, in the case of assessee itself vide order in ITA No.41/Ind/2007 dated 16.5.2008. This assertion of the assessee was not controverted by the Revenue. 3. We have considered the rival submissions and perused the material available on file. In view of the above, we are reproducing hereunder the relevant portion of the aforesaid order dated 16.5.2008: This appeal arises against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R in Banks, interest on deposits with UTI, interest on SB A/c balances interest as having loan to employees, interest as vehicle loan, computer loan, grain advances, other advances to employee, interest as advances to members of federation and interest on I.T. refunds. The misc. income includes Rs. 40,000/- as incentive from UTI and income from Guest House of Rs. 11,783/-. 6. The ld. Authorized Representative relied on various decisions of Supreme Court and High Courts and also the decision of I.T.A.T. , Indore Bench. He pleaded that I.T.A.T. Indore Bench in I.T.A.Nos. 394/Ind/2000 and 3/Ind/2003 in the case of Jt. CIT vs. Indore Paraspar Sahkari Bank order dated 23.1.2003, the I.T.A.T. has held as under :- 4.4 We have considered the ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Bombay High Court in the above cases, we decide the ground and the additional grounds under consideration in favour of the assessee. He further pleaded that Hon ble Allahabad High Court in the case of Gorakhpur Kshetriya Gramin Bank v. CIT, (2007) 292 ITR 205 (All), has held as under :- Held, that the business of banking could not be carried out without the aid of the employees and therefore whatever amount the assessee had received either towards the excess provision of pay recovered from resigned staff, training cost, recovery and forfeiture of security of employees was attributable to the activity of carrying on the business of banking. It was not the case of the Revenue that apart from carrying on the business of banking, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 80-P(2)(a)(i) of the Income-tax Act, 1961, was allowable to the assessee. He pleaded that the Hon ble Apex Court in the case of Cambay Electric Supply Co.Ltd. vs. CIT, 113 ITR 84, has held that expression attributed has to be given a very wide meaning. Therefore, the interest earned on FDR etc. qualify for special deduction u/s 80P(2) of the Income-tax Act, 1961. The amount of Rs. 20,43,750/- is interest on the FDR in Banks, interest on deposits with UTI, interest on SB A/c balances,on loan to employees, interest on vehicle loan, computer loan, grain advances, other advances to employee, interest as advances to members of federation and interest on I.T. refunds. The misc. income includes Rs. 40,000/- as incentive from UTI and income f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ratio of the Hon'ble Supreme Court and Hon ble High Courts and also I.T.A.T., we hold that the assessee was eligible for deduction under section 80-P(2)(a)(i) of the Act, on the interest income from fixed deposits with the Banks and interest from S. B. Account, interest on deposits with U.T.I., interest on loan to employees, interest on advances to employees and interest on advances made to members of the Federation. However, interest received from the Income Tax Department on the refund shall not qualify for the same as it cannot be said as attributable to the business of the assessee. 9. Regarding miscellaneous income, income from guest house, we also hold that this income also qualify for deduction u/s 80-P(2)(a)(i), in view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f reserved funds is exempt u/s 80P(2)(a)(i) of the I.T. Act, 1961. The decision in the case of Mehsana District Central Co-operative Bank Ltd. (supra) and Karnataka State Co-operative Apex Bank (supra) have already been discussed wherein identical ratio was laid down. The decision in Gorakhpur Kshetriya Gramin Bank (292 ITR 205) (All) also held identically. Therefore, respectfully following the same, we do not find any infirmity in the order of the ld. CIT(A) especially when the interest income on fixed deposits and saving bank account is very much part of banking activity/business of the assessee. The ratio laid down in the case of CIT vs. Ratnagiri District Central Co-operative Bank Ltd. (254 ITR 697) (Bom) further supports the case of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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