TaxTMI 
TaxTMI 
2022 (4) TMI 1384
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....vities is profits and gains of business or profession. ii. For that in the facts and in the circumstances of the case the denial of interest income received from Axis Bank by learned Income Tax Officer, Ward-1(1), Burdwan (The Then Ward-2(3), Burdwan) and learned CIT(A), National Faceless Appeal Centre as the interest income is not "attributable to one of the activities" as specified in section 80P of the Income Tax Act 1961 is not lawful consideration and their decisions completely bad in law. iii. For that in the facts and in the circumstances of the case the learned Income Tax Officer, Ward-1(1), Burdwan (The Then Ward-2(3), Burdwan) and learned CIT(A), National Faceless Appeal Centre have admitted the fact of engagement of your appellant in banking activities in spite of the banking activities consideration of interest income as income from other sources is completely bad in law and deserves to be set aside/cancelled/quashed. iv. For that in the facts and in the circumstances of the case the learned CIT(A), National Faceless Appeal Centre is erred in law in dismissing the appeal based on the decision of the Hon'ble Jurisdictional Calcutta High court in the case of South E....
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.... erred in law in dismissing the appeal based on the decision of the Honorable Jurisdictional Calcutta High Court in the case of South Eastern Railway Employees Co-operative Credit Society Limited (2016) 73 Taxmann.com 123 (Calcutta) /which was followed by the Honorable Calcutta High Court in a recent case of Electro Urban Cooperative Society Limited (2020) 118 Taxmann.com 310(Cal), considering as the above case laws are squarely applicable to your appellant which is completely bad in law because your appellant is dong banking activities and it is a primary agricultural credit society (PACS). The above case laws are not applicable to your appellant. v. For that in the facts and in the circumstances of the case the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre is erred in Law for not considering the special provisions applicable to the Cooperative credit structure entities as provided in chapter XIIIA particularly section 134B(6) where in it is stated that a cooperative society covered under this section may invest or deposits its fund in any financial institutions regulated by the Reserve Bank of India of its choice with a minimum net worth and on a....
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....referred an appeal before us. 7. That at the time of hearing before us, the Ld. AR submitted that the assessee deserves to be allowed. The benefits of deduction u/s 80P(2) interest income of Rs. 1,16,615/- received from Axis Bank, Kalna Branch as income from the fund regularly deposited not immediately required for business purposes which is in the form of investment of surplus fund, the account was opened mainly for the purpose of encashment of other banks cheque deposited by the depositors in their Savings Bank Account maintained with the appellant. Reliance placed on the following judgement: "In the case of Mavilayi Service Co-operative Bank Ltd. & Ors. Vs. Commissioner of Income Tax, Calicut & Anr. Civil Appeal No. 8315 of 2019 and Diary No. 31268 of 2019, date of judgement 12.01.2021. In which para 45 of that order it is stated that section 80P of the I.T. Act being a benevolent provision enacted by Parliament to encourage and promote the credit of co-operative sector in general must be read liberally and reasonably and if there is ambiguity in favour of assessee." 8. Further, the Ld. AR relied on the following decisions: i. The Jawala Co-operative Urban Thrift and Cre....
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....ive Credit society Ltd. (2016) 73 Taxmann.com 123 (Calcutta) which was followed by the Hon'ble Calcutta High Court in recent case of Electro Urban Cooperative Society Ltd. (2020) 118 Taxmann.com 310 (Cal) considering as case laws are squarely applicable to the appellant which is completely bad in law because the appellant is doing banking activities and it is a primary agricultural credit society (PACS) as such case laws are not applicable to the appellant. 11. We further find that the coordinate bench while deciding the similar issue in the case of M/s. Panditpur Samabay Krishi Unnayan Samity Ltd. being ITA No. 04/Kol/2022 observed as under: "7. We have heard rival contentions and perused the records placed before us. The assessee has raised three grounds alleging that the ld. CIT(A) erred in not providing the benefit of deduction u/s 80P(2)(a)(i) of the Act of Rs. 6,46,233/-, Rs. 29,053/- & Rs. 8,760/-. The assessee has also placed reliance on the judgment of the Hon'ble jurisdictional High Court in the case of South Eastern Railway Employees' Cooperative Credit Society Ltd. (supra). The following question of law was formulated by the Hon'ble Court: "Whether in the facts and....
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....ch surplus was not required for business purposes. Assessee(s) markets the produce of its members whose sale proceeds at times were retained by it. In this case, we are concerned with the tax treatment of such amount. Since the fund created by such retention was not required immediately for business purposes, it was invested in specified securities. The question, before us, is - whether interest on such deposits/securities, which strictly speaking accrues to the members' account, could be taxed as business income under s. 28 of the Act? In our view, such interest income would come in the category of "income from other sources", hence, such interest income would be taxable under s. 56 of the Act, as rightly held by the AO. In this connection, we may analyze s.80P of the Act. This section comes in Chapter VI-A, which, in turn, deals with "Deductions in respect of certain income". The headnote to s. 80P indicates that the said section deals with deductions in respect of income of co-operative societies. Sec. 80P(1), inter alia, states that where the gross total income of a cooperative society includes any income from one or more specified activities, then such income shall be dedu....
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....der Section 64 read with Section 63 of the Multi-State Co-operative Societies Act, 2002 is attributable to the business of providing credit facilities to its members. But we are not able to agree with Mr. Khaitan that the rest of the interest earned by the assessee from the investments is also attributable to the business of providing credit facilities to its members. We have not been impressed by the judgments cited by Mr. Khaitan. 10. We are unable to agree with the views of Patna High Court in the case of Bihar State Housing Co-operative Federation Ltd. (supra). The Division Bench in that case relied on the judgment of the Apex Court in the case of CIT v. Karnataka State Co-operative Apex Bank [2001] 251 ITR 194/118 Taxman 321. That was a case of a co-operative bank. A cooperative bank and a co-operative society do not stand on the same footing. The whole of the income of co-operative bank is deductible whereas in the case of a society the income attributable to any one or more of the activities laid down in Subsection (2) is deductible. The Division Bench did not give any independent reasoning. The Division Bench proceeded on the basis that the view taken by them was supporte....
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....ning those two amounts of income is the amount of interest paid for that money to the members which has to be ascertained and that has to be deducted from the expenditure of the eligible business so that the eligible amount of deduction can be worked out. At the same time, the Assessing Officer has to be directed, according to him, to treat the amount of interest arising out of investments of the funds created under Section 63 as an income attributable to the business. 12. Mr. Saraf submitted that this is a new case made out by the assessee before the High Court. This was never the plea before any of the authorities. He is no doubt correct in his submission. But Court cannot refuse to give a person what is due to him. As a matter of fact, only that is a good judgment which renders every person his due. Whether the assessee claimed the amount or did not claim the amount, is not of much importance. What is of importance is whether the benefit is allowable in law? If an answer to that question is in the affirmative, then that benefit has be allowed. 13. In that view of the matter, the question raised for decision is answered in the affirmative and in favour of the revenue to the e....