TaxTMI 
TaxTMI 
2017 (2) TMI 1500
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....r the Assessment Year 2013-14. Since common grounds are involved in these appeals therefore for the sake of convenience these four appeals are heard together and are being disposed of by this composite order. 2. Common grounds raised in these appeals are as under : 1. On the facts in the circumstance of the case. The order of the CIT (A) dated 21.10.2016 for the Assessment year 2013-14, is not maintainable in law and liable to be set aside. 2. On the facts in the circumstance of the case, the Learned CIT (A) had appreciated that the appellant assessee is primary agricultural Society and registered under Co-Operative Society act, and the facility are provided that its members only, and claimed exempt u/s. 80(P)(2)(a)(i) ....
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....he order to levy of the tax by the assessing authority is not correct and liable to be set aside 8. Without prejudice, confirming the levy of tax partly and levied interest and penalty are excessive and arbitrary and ought to have been deleted substantially. 9. For such other grounds that may be urged at the time of hearing and it is prayed that kindly may allow the appeal in the interest of justice and equity. 3. The only issue raises in these appeals is regarding the disallowance of claim of Section 80P of the Income Tax Act, 1961 (in short 'the Act') in respect of the interest on Fixed Deposits with the Bank. The assessee is a co-operative society which provides credit facilities to the farmers. The assessee ....
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.... Tumkur Merchants Souharda Credit Co-operative Ltd. Vs. ITO (supra) and again in the case of M/s. Guttigedarara Co-operative Society Ltd. Vs. ITO (supra). The Hon'ble High Court has understood the decision of Hon'ble Supreme Court in the case of Totgars Co-operative Sales Society Ltd. Vs. ITO (supra) and held that when the society has surplus funds which were made fixed deposit in the bank to earn interest, the same is eligible for deduction under Section 80P of the Act. In the case of M/s. Guttigedarara Co-operative Society Ltd. Vs. ITO (supra), the Hon'ble High Court has again considered this issue in paras 7 to 12 as under : "7, From the aforesaid facts and rival contentions, the undisputed facts which emerge are, ce....
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....ce. The Apex Court had an occasion to consider the meaning of the word 'attributable' as supposed to derive from its use in various other provisions of the statute in the case of Cambay Electric Supply Industrial Co. Ltd. v. CIT [1978] 113 ITR 84 (at page 93) as under:- 'As regards the aspect emerging from the expression "attributable to" occurring in the phrase "profits and gains attributable to the business of" the specified industry (here generation and distribution of electricity) on which the learned Solicitor-General relied, it will be pertinent to observe that the legislature has deliberately used the expression "attributable to" and not the expression "derived from". It cannot be disputed that the expression "at....
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....e so derived or the capital, if not immediately required to be lent to the members, the society cannot keep the said amount idle. If they deposit this amount in bank so as to earn interest, the said interest income is attributable to the profits and gains of the business of providing credit facilities to its members only. The society is not carrying on any separate business for earning such interest income. The income so derived is the amount of profits and gains of business attributable to the activity of carrying on the business of banking or providing credit facilities to its members by a co-operative society and is liable to be deducted from the gross total income under Section 80P of the Act. 11. In this context when we look a....
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....of profits and gains, was not immediately required by the assessee for lending money to its members, as there were no takers. Therefore they had deposited the money in a bank so as to earn interest. The said interest income is attributable to carrying on the business of banking and therefore it is liable to be deducted in terms of Section 80P(1) of the Act. In fact similar view is taken by the Andhra Pradesh High Court in the case of CIT v. Andhra Pradesh State Co-operative Bank Ltd. [2011] 336 ITR 516/200 Taxman 220/12 taxmann.com 66." Thus it is clear that when the amount which was deposited in the bank was not an amount due to members and it was not the liability of the society to the members then the interest earned from the deposits....