TaxTMI 
TaxTMI 
2015 (7) TMI 874
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....ng substantial questions of law:- i) Whether the Tribunal failed in law to appreciate that the interest earned on short-term deposits in banks were only investment in the course of activity of providing credit facilities to members and that the same cannot be considered as investment made for the purpose of earning interest income and consequently passed a perverse order? ii) Whether the Tribunal is correct in law in holding that the interest earned on the deposits in banks by the appellant/co-operative society does not qualify for deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961 on the facts and circumstances of the case iii) Without prejudice, whether the tribunal is justified in not holding that....
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....he said order, assessee preferred an appeal to the Commissioner of Income Tax (Appeals). The appellate authority held that assessee's activity is not in the nature of banking and consequently it is entitled to deduction under Section 80P(2)(a)(i) of the Act. However, insofar as the amount of interest is concerned, it is held that assessee is liable to income tax in view of the judgment of the Apex Court in the case of M/s. Totgars Co-operative Sale Society Limited Vs. Income Tax Officer, reported in 322 ITR 283 (SC). Aggrieved by that portion of the order, assessee preferred an appeal to the Commissioner of Income Tax (Appeals) which has dismissed the appeal following the judgment of the Apex Court in the aforesaid case. Aggrieved by th....
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....s interest is attributable to the business of providing credit facilities to its members, is the question. 8. In this regard, it is necessary to notice the relevant provision of law i.e., Section 80P(2)(a)(i):- "Deduction in respect of income of cooperative societies: 80P (1) Where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in subsection (2), there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub-section (2), in computing the total income of the assessee. (2) The sums referred to in sub-section (1) shall be the following, namely: (a) in the case of co-operative society eng....
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....d gains derived from the conduct of the business of generation and distribution of electricity. In this connection, it may be pointed out that whenever the legislature wanted to give a restricted meaning in the manner suggested by the learned Solicitor- General, it has used the expression "derived from", as, for instance, in section 80J. In our view, since the expression of wider import, namely, "attributable to", has been used, the legislature intended to cover receipts from sources other than the actual conduct of the business of generation and distribution of electricity." 10. Therefore, the word "attributable to" is certainly wider in import than the expression "derived from". Whenever the legislature wanted to give a restricted mean....
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.... marketing of agricultural produce grown by its members. The sale consideration received from marketing agricultural produce of its members was retained in many cases. The said retained amount which was payable to its members from whom produce was bought, was invested in a short-term deposit/security. Such an amount which was retained by the assessee - Society was a liability and it was shown in the balance sheet on the liability side. Therefore, to that extent, such interest income cannot be said to be attributable either to the activity mentioned in Section 80P(2)(a)(i) of the Act or under Section 80P(2)(a)(iii) of the Act. Therefore in the facts of the said case, the Apex Court held the assessing officer was right in taxing the interest ....