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of <h1>Tribunal grants exemption to co-op society for commission income from electricity board.</h1> <h3>Ahmednagar District Central Co-operative Bank Limited. Versus Income-Tax Officer.</h3> The Tribunal ruled in favor of the co-operative society, holding that the commission income from Maharashtra State Electricity Board and Mula Pravara ... Attributable To, Carrying On Business, Co-operative Society, Earned Income Issues involved: Whether income by way of commission from Maharashtra State Electricity Board (MSEB) and Mula Pravara Co-operative Society (MPCS) is attributable to the business of banking for exemption under section 80P(1) read with section 80P(2)(a)(i) of the Income-tax Act, 1961.Summary:The appeal pertains to the assessment year 1982-83, involving a co-operative society engaged in banking business. The dispute revolves around the inclusion of commission income from MSEB and MPCS in the total income for tax purposes. The assessee contended that this commission income should be considered part of the business of banking and thus eligible for exemption under section 80P(1) read with section 80P(2)(a)(i).Upon examination, it was found that the assessee's role in collecting electricity bills and managing accounts for MSEB and MPCS involved typical banking functions such as receiving money, remitting funds, and providing related services. The departmental representative argued that earning commission was a separate activity from banking, citing the Banking Regulation Act, 1949. However, the Tribunal disagreed, emphasizing that the income in question must be 'attributable' to the business of banking, which includes activities beyond those explicitly defined as banking under the Act.The Tribunal referenced relevant case law, including decisions by the Madhya Pradesh High Court and the Supreme Court, which supported a broad interpretation of income attributable to banking activities for co-operative societies. In light of these precedents, the Tribunal ruled in favor of the assessee, holding that the commission income from MSEB and MPCS was indeed attributable to the business of banking and thus qualified for exemption under section 80P(1) read with section 80P(2)(a)(i).Therefore, the appeal was allowed, and the Income Tax Officer was directed to grant the requested relief to the assessee.
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