2021 (1) TMI 233

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... and also accepts thrift deposits from its members. The assessee filed its return of income for the A.Y. 2016-17 on 13.03.2018 admitting total income at 'nil' after claiming deduction u/s 80 P of the Income Tax Act, 1961 (the Act). Pursuant to selection of the return of income for scrutiny under CASS, notices u/s 143(2) and 142(1) were issued to assessee, in response to which the assessee submitted the information called for by the AO. During assessment proceedings, the AO observed that the assessee has made deposits with Kotak Mahindra Bank and has earned interest income therefrom. AO held that such interest income cannot be treated as "business income" but has to be treated as "income from other sources", and, accordingly, deduction u/s 8....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....limited to its members." 2.1. AO observed that in case of M/s Totgar's Co-Operative Sale Society Ltd for the AYs 1991-92 to 1999-2000, the Hon'ble Supreme Court has held the issue against the assessee. He also relied on the decision of Hon'ble Karnataka High Court in the case of M/s Tumkur Merchants Co-operative and Credit Society and held that interest earned on deposits held with bank out of surplus funds of Society is taxable under the provisions of S.56 of the Act. Accordingly, AO brought the sum of Rs. 11,48,437/- to tax. 2.2. Aggrieved, assessee preferred an appeal before the CIT(A), who confirmed the order of AO and the assessee is in second appeal before the Tribunal. 3. The Ld.Counsel for the assessee submitted that the amount ....