TaxTMI 
TaxTMI 
2021 (12) TMI 780
X X X X Extracts X X X X
X X X X Extracts X X X X
....rcumstances of the case and in law, the learned A.O. erred in disallowing deduction claimed of Rs. 8,99,083/- u/s 80P(2)(a)(i) of the Act by disregarding the fact that the interest was received on term deposit from SBI. 2. In the facts and circumstances of the case and in law, the learned A.O. erred in disallowing deduction claimed of Rs. 8,83,348/- u/s. 80P(2)(a)(i) of the Act by disregarding the fact that the commission was received from MSEB. 3. In the facts and circumstances of the case and in law, the learned A.O. erred in initiating penalty u/s 271(l)(c) and interest u/s 234A, B, C & D." 3. In so far as Ground No. 1 and 2 are concerned, Ld. Counsel for the assessee submits that the issue in these grounds is squarely covered by th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....reme Court in the case of Todgars Cooperative Sale Society Ltd. (supra). However, we noticed that Hon'ble Karnataka High Court has also considered the decision of Todgars Cooperative Sale Society Ltd. (supra) in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. (supra) and held that interest income is attributable to carrying on the business of the assessee and therefore it is liable to be deducted u/s. 80P(2)(a)(i) of the Act. The "SMC" Bench of the Tribunal in the case of Jaoli Taluk Sahakari Patpedhi Maryadit (supra) has followed the decision rendered by Hon'ble Karnataka High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd. (supra). For the sake of convenience, we extract below the operative por....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... immediately required to be lent to the members, they 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. 9. In this context when we look at the judgment of the Apex Court in the case of M/....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e for lending money to the 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] 200 Taxman 220/12 taxmann.com66. In that view of the matter, the order passed by the appellate authorities denying the benefit of deduction of the aforesaid amount is unsustainable in law. Accordingly it is hereby set aside. The substantial question of law is answered in favour of the assessee and against the revenue....
X X X X Extracts X X X X
X X X X Extracts X X X X
....le u/s. 80P(2)(c) of the Act. Accordingly, by allowing deduction of Rs. 50,000/-, the Assessing Officer assessed balance amount of Rs. 10.34 lakhs as income of the assessee under the head "income from other sources". The learned CIT(A) also confirmed the same. 8. The Learned AR submitted that an identical issue was considered by the Pune SMC Bench in the case of Dronagiri Nagri Sahakari Patsanstha Maryadit (ITA No. 1183/Pune/2017 dated 20.6.2018) and it was decided in favour of the assessee. 9. We heard learned DR and perused the record. We noticed that an identical issue was considered by the Pune SMC Bench in the above cited case and the same has been decided in favour of the assessee with following observations :- 10. After hearing....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er section 80P of the Act in respect of this income. With respect to the income from running of Ambulance, while holding that the assessee is not eligible for deduction under section 80P(2)(a) or (b), we are in total agreement with the alternate plea of the assessee that the expenses attributable for the purpose operating such activity ought to have to be allowed on actual/proportionate basis. We are of the view that the action of the CIT(A) in restricting the expenses artificially @ 10% of the gross income from such activities is not sustainable in law being devoid of objectivity. The Assessing Officer is accordingly directed to allow the expenses which are attributable to the running of Ambulance and determine the income from the aforesai....