2023 (10) TMI 37

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....enying the deduction claimed by appellant u/s 80P and making an addition of Rs 2,38,071/- to the returned income of the appellant. 2. That the Ld. AO has erred in law and on facts, by ignoring the fact that the appellant's primary business is to grant loans to members and creation of funds to lent to the members and these activities are covered under section 80P and appellant is eligible for the deduction. 3. That the Ld. AO has erred in law and on facts, by ignoring the fact that appellant had invested the idle funds with other co-operative banks in the light of provisions of sec-80P(2)(d) of the Income Tax Act 1961 and income from such investment from cooperative bank is eligible for deduction. 4. That the L....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... he rejected the application. Aggrieved against the order dated 18.06.2018 the assessee preferred appeal before the learned CIT(A), who sustained the addition. 4. Learned DR apropos to the grounds of appeal raised two fold objections - Firstly, that the application so made for rectification of mistake in respect of addition made qua interest earned on savings account is beyond the scope of Section 154 of the Act, as it is not a mistake. On the contrary the AO has taken a conscious decision by following the judicial precedent; and Secondly, the learned DR Shri Om Parkash submitted that the issue is no more res-integra as the interest earned out of savings account of the assessee society would be chargeable u/s 156 of the Act. In ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....f profits and gains of business" emphasise that the income in respect of which deduction is sought must constitute the operational income and not the other income which accrues to the Society. In this particular case, the evidence shows that the assessee-Society earns interest on funds which are not required for business purposes at the given point of time. Hon'ble PUNJAB AND HARYANA High Court in the case of Punjab State Co-operative Milk Producers Federation Ltd. v. Commissioner of Incometax 336 ITR 501 have held that assessee-society was not entitled to deduction under section 80P(2)(d) m respect of interest received on advances provided to its member co-operative societies as the credit facility which was provided by the assess....