TaxTMI 
TaxTMI 
2024 (1) TMI 1028
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....ase which pertains to Assessment Year 2013-14. The Grounds of Appeal raised in the said appeal by the assessee are as under: (1) That the assessee had gave computation of taxable income which is clear and the commercial bank where taken taxable and co-operative society bank interest is claimed u/s 80p(2)(d) and business income claimed u/s 80p(2)(l)(a) and 80c rupees 50,000. 80p (1) where in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub section 2 there shall be deducted, in accordance with and subject to the provisions of this section, the sums specified in sub section (2) in computing the total income of the assessee .w.e.f. 1-4-1968. (2) The matter has been examined in light of the judicial decisions on this issue. In the case of CIT v. Nawanshahar central co-operative bank ltd. (2007) 160 taxman 48 the apex court held that the investment made by a banking concern are part of the business of banking therefore, the income arising from such investment is attributable to the business of banking falling under the head profit and gains of business and profession. (3) That the assessee had m....
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....dit And Tax Audit Where Complied By C.A., And Without Rejecting Books Of Accounts Are Giving Any Subsptencial Material Addition Made Is Not Justified case law in annexure- A a That In Appeal Main Question Is Deduction u/s 80p(2)(a)(i) And 80P(2)(d) For Claim Following Case Law and there main content is given here. A. Kerala State Co-Operative Agricultural & Rural Development Bank Ltd. Vs. Assessing Officer On 14 September 2023 (S.C. Case) please see page no.- 17 pr. 24.1 - That section 80-P of the IT act is a benevolent provision, which was enacted by parliament in order to encourage and promote the growth of the co-operative sector generally in the economic life of the country and must, therefore be read liberally and in favour of assessee. Pr. 24.2 - That once the assessee is entitled to avail of deduction, the entire amount of profit and gains of business that are attributable to any one or more activities maintained in sub-section (2) of section 80-P must be given by way of deduction. B. Commissioner Of Income Tax 17, Mumbai Appellant (S) Vs. M/S Anna Saheb Patil Mathadi Kamgar Sahkari Pathpedi Limited (S.C. Case) also decide of clai....
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....nbsp; Milapchand Oswal Advocate 6. On the basis of aforesaid submissions (though having certain spelling errors but have been extracted as it is for the sake of authenticity), it was the prayer of Ld. AR that the disallowance made by the Ld. AO and sustained by the Ld. CIT(A) was an erroneous application of law and against the instinct or mandate of law as explained and guided by Hon'ble Apex Court In the case of Kerala State Co-Operative Agricultural & Rural Development Bank Ltd. Vs. Assessing Officer dated 14 September 2023, thus a liberal considerations shall be viewed and all such disallowances are deserves to be struck down. 7. Per contra, Ld. Sr DR has vehemently su....
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.... of the assessee. (2) The sums referred to in sub-section (1) shall be the following, namely :- (a) in the case of a co-operative society engaged in- (i). carrying on the business of banking or providing credit facilities to its members, or (ii) to (iii)....................................................................." (Emphasis by underlining supplied by us) On a perusal of the aforesaid statutory provision, we find that the same, contemplates, that the income of a co-operative society from its business of banking or providing credit facilities to its members is eligible for deduction u/s. 80P(2)(a)(i) of the Act. Our indulgence in the present appeal is confined to the limited aspect, i.e, as to whether or not the interest income earned by the assessee-society by depositing its surplus funds with a bank can be brought within the meaning of "income from carrying on the business of banking or providing credit facilities to its members", and thus, would fall within the realm of the deduction contemplated in section 80P(2)(a)(i) of the Act. At this stage, we may herein observe, that it is the claim of the assessee, tha....
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....s was thereafter retained and invested as a short-term deposit/security with the bank, then, the interest income therein earned to the said extent could not be said to be attributable to its activity of providing credit facilities to its members. As is discernible from the aforesaid judicial pronouncement of the Hon'ble Supreme Court, we find the Hon'ble Apex Court had clarified beyond doubt that they have confined the judgment to the facts of the case before them, and the same was not to be considered as laying down of any law. Be that as it may, the aforesaid judgment of the Hon'ble Supreme Court in the case of Totgars Co-operative Sale Society Ltd. (supra) had thereafter been considered by the Hon'ble High Court of Karnataka in the case of Tumkur Merchants Souharda Cooperative Ltd. (supra), wherein the Hon'ble High Court had after exhaustive deliberations held as under : '6. From the aforesaid facts and rival contentions, the undisputed facts which emerges is, the sum of Rs. 1,77,305/- represents the interest earned from short term deposits and from savings bank account. The assessee is a cooperative society providing credit facilities to its mem....
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.... conduct of the business of generation and distribution of electricity. In this connection it may be pointed out that whenever the Legislature wanted to give a restricted meaning in the manner suggested by the learned Solicitor General it has used the expression "derived from", as for instance in s. 80J. In our view since the expression of wider import, namely, "attributable to" has been used, the Legislature intended to cover receipts from sources other than the actual conduct of the business of generation and distribution of electricity. 8. Therefore, the word "attributable to" is certainly wider in import than the expression "derived from". Whenever the legislature wanted to give a restricted meaning, they have used the expression "derived from". The expression "attributable to" being of wider import, the said expression is used by the legislature whenever they intended to gather receipts from sources other than the actual conduct of the business. A cooperative society which is carrying on the business providing credit facilities to its members, earns profit and gains of business by providing credit facilities to its members. The interest income so derived or the capita....
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.... 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 COMMISSIONER OF INCOME TAX III HYDERABAD v. ANDHRA PRADESH STATE COOPERATIVE BANK LTD. Reported in (2011) 200 TAXMAN 220/12. 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. Hence, we pass the following order: Appeal is allowed. The impugned order is hereby set aside. Parties to bear their own cost.' In the backdrop of the aforesaid observations of the Hon'ble High Court, we are of a considered view, that as in the case of the assessee before us the surplus funds parked by way of short-term deposit with the co-operative bank, viz. Jila Sahakari Kendriya Bank are inextricably interlinked, or in fact interwoven with its business of providing credit facilities to its me....
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....a payment made on or before the due date within the meaning of section 36(1)(va) of the Act? 11. Before proceeding any further, I may herein observe that the grace/extended period of 5 days that was available to the assessee for depositing other dues had been withdrawn w.e.f. February 2016. As the deposits in the case of the assessee were made much prior to the aforesaid cutoff date, i.e., February 2016, therefore, the grace period for making respective payments was duly available to the assessee during the year under consideration. 12. As can be gathered from "Explanation 1" to Section 36(1)(va) of the Act, the term "due date" has been explained as under: "[Explanation 1]-For the purposes of this clause, "due date" means the date by which the assessee is required as an employer to credit an employee's contribution to the employee's account in the relevant fund under any Act, rule, order or notification issued thereunder or under any standing order, award, contract of service or otherwise." Although the assessee as an employer is obligated to credit an employee's share of contribution to the employee's account in the relevant fund under t....
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....wards EPF of Rs. 1,88,346/- (supra) within the grace period under the EPF Act, 1952, therefore, respectfully following the judgment of the Hon'ble High Court of Bombay in the case of Pr. CIT Vs. Hind Filter Ltd. (supra), I am of the view that the said amount could not have been disallowed u/s. 36(1)(va) r.w.s 2(24)(x) of the Act. 13. At this stage, I may herein observe that the Hon'ble Apex Court in the case of Checkmate Services Pvt. Ltd. (supra) had held that employees share of contribution towards the welfare enactment had to be deposited by the assessee in terms of those enactments and on or before the due dates mandated by such concerned law. For the sake of clarity, the observation of the Hon'ble Apex Court is culled out as under: ".......That, however, cannot apply in the case of amounts which are held in trust, as it is in the case of employees' contributions- which are deducted from their income. They are not part of the assessee employer's income, nor are they heads of deduction per se in the form of statutory pay out. They are others income, monies, only deemed to be income, with the object of ensuring that they are paid within the due date specified in....