TMI Blog2008 (1) TMI 418X X X X Extracts X X X X X X X X Extracts X X X X ..... and other miscellaneous receipts. The entire income was claimed as deduction under s. 80P(2)(a)(i) of the Act. In the course of assessment proceedings, it was noticed by the AO that the income of the assessee included a sum of Rs. 2,84,606 on account of parking and visiting charges and Rs. 27,000 on account of sale of scrap. The AO was of the view that income derived from carrying on business of banking or providing credit facilities to its members was exempt from taxation under s. 80P(2)(a)(i) of the Act and the income by way of interest and dividend derived from its investment in any other co-operative society was exempt under s. 80P(2)(d) of the Act. Accordingly, any other income could not be allowed as deduction under s. 80P. According ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o-operative Bank (1984) 149 ITR 438 (MP). On the similar analogy, it was submitted that income from the sale of scrap should also be considered as income incidental to the main business. 4. The CIT(A) was not satisfied with the submissions of the assessee. According to him, the parking charges and visiting charges related to non-performance assets (NPA) account. According to him, once the assets are qualified as NFA, the same go out of the ambit of business assets. It was also observed by him that in case of surplus amount on account of parking and visiting charges, they were liable to be added to the value of such NPA or alternatively it could be assessed as income from other sources. Reliance was placed by him on the decision of Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from the banking business. Regarding the decision of Hon'ble Andhra Pradesh High Court it was submitted that the same is distinguishable on facts. Particular attention was invited to p. 623. On the other hand, the learned Departmental Representative has relied on the orders of lower authorities by submitting that there is no nexus between the income earned by way of parking charges and visiting charges as well as sale of scrap and the business of banking activity carried on by the assessee. Therefore, the deduction under s. 80P was rightly refused by the lower authorities. 6. Rival submissions of the parties have been considered carefully. The question for our consideration is whether the assessee is entitled to deduction under s. 80P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld by the Hon'ble Supreme Court in the case of Cambay Electric Supply Industrial Co. Ltd. vs. CIT 1978 CTR (SC) 50 : (1978) 113 ITR 84 (SC). It was also observed that whenever the legislature intended to give a restricted meaning, it had used the expression 'derived from'. Lastly it was held that the expression 'attributable to' would cover receipts from sources other than the actual conduct of the business of generation and distribution of electricity. In view of these observations, the Court held that the profits computed under s. 41 (2) on the sale of old machinery and buildings would fall within the ambit of 'any profits and gains attributable to the business of generation or distribution of electricity'. This judgment was followed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. Some of the purchasers of the trucks found it difficult during some years to get the requisite spare parts either because of the spare parts manufactured by the assessee were not sufficient to meet the demand or because the assessee did not manufacture those particular spare parts. In these circumstances, and as a matter of commercial expediency, the assessee imported such spare parts and sold them to the customers on which certain profits accrued to the assessee. Though this profit did not arise directly from the activity of manufacture of trucks yet the Hon'ble Supreme Court held that such profit was attributable to the profits and gains of the business of priority industry. 9. Following the decision of the Hon'ble Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be considered as profits attributable to/profits relating to the main activity. 11. In the case before us, admittedly, the assessee is engaged in the business of banking and profits from such activity are eligible for deduction under s. 80P(2)(a)(i) of the Act. In the course of its banking activity, the assessee gave loans to its clients for purchase of vehicles. Whenever the clients could not pay the repayment of instalments of loan, the assessee used to seize the vehicles and park the same in paid parking lots. The assessee used to charge certain amount from its clients so as to recover the said parking charges. The difference between parking charges paid and received resulted in some income. In our humble opinion, the activity of se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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