2024 (6) TMI 1402

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....l Centre on 19/9/2022 under section 143 (3) of the income tax act, 1961 was dismissed. 2. The only dispute in this appeal is that assessee has invested surplus amount in fixed deposits with state bank of India and earned interest of Rs. 1,176,084/-. The assessee claimed deduction under section 80(P)(2) of the act which was denied to the assessee and is contested in this appeal. 3. The brief facts of the case shows that assessee is a co-operative society registered under the Maharashtra State cooperative societies act, 1961 collecting deposits from members under various scheme and major source of income is on account of interest on loan to its members and interest from fixed deposits. The assessee filed its return of income on 12/2/202....

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....l ground of appeal. Assessee is contested that for assessment year 2013 - 14 under section 143 (3) disallowance was made and assessee was found by the learned CIT - A as eligible for deduction under section 80P(2) (a) of the act. Similar is the case for assessment year 2014 - 15 wherein the claim of the assessee was held to be allowable by the learned CIT - A. He further relied upon the decision of the coordinate bench in ITA number 643/PU/2024 dated 14/05/2024 for assessment year 2018 - 19 wherein the deduction under section 80P(2) (d) such deduction is allowable. Therefore the claim of the assessee is that deduction is allowable to the assessee even in the otherwise under section 80P(2) (d) of the act. 7. The learned departmental repre....

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....k out of the amounts which was used by the assessee for providing credit facilities to its members considering the decision of the honourable Supreme Court in case of Toatagarh , it has been 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 members. It is not carrying on any other business. The interest income earned by the assessee by providing credit facilities to its members is deposited in the banks for a short duration which has earned interest. Therefore, whether this interest is attribut....

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....he 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 "attributable to" is certainly wider in import than the expression "derived from". Had the expression "derived from" been used, it could have with some force been contended that a balancing charge arising from the sale of old machinery and buildings cannot be regarded as profits and gains derived from the conduct of the business of generation and distribution of electricity. In this connection, it may be pointed out that whenever the leg....

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....ed 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/s. Totgars Co-operative Sale Society Ltd., on which reliance is placed, the Supreme Court was dealing with a case where the assessee-Cooperative Society, apart from providing credit facilities to the members, was also in the business of marketing of agricultural produce grown by its members. The sale consideration received from marketing agricultural produce of its members was r....