TaxTMI 
TaxTMI 
2026 (4) TMI 1171
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the assessment order passed under section 143(3) read with section 144B of The Income Tax Act, 1961 (The Act) dated 21 September 2022 by the assessment unit, Income Tax Department ( the ld. AO ), was dismissed. 2. Solitary grievance of the assessee is as per grounds of appeal that assessee has been denied deduction of Rs. 22,213,166 - under section 80P(2)(a)(i) of The Act and the learned revenue authorities have thrust upon the assessee that the income earned by the assessee is chargeable to tax as income from other sources being the interest and dividend earned from cooperative society and cooperative bank and therefore the deduction was also denied under section 80P(2)(d) of the act. 3. Brief facts of the case shows that assessee f....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and the same is entitled to be deduction under section 80P(2)(a)(i) of the act. This issue is decided in favour of the assessee by Honourable Karnataka High Court in Tumkur Merchants Souharda Credit Cooperative Ltd. vs. Income-tax officer Word-V, Tumkur [2015] 55 taxmann.com 447 (Karnataka)/ [2015] 230 Taxman 309 (Karnataka) [28-10-2014]. It was further stated there is no finding of the learned assessing officer that how the income earned by the assessee on interest from the cooperative banks which is deposited out of the statutory reserves as well as the amount received from its members, can be said to be an income from other sources. The assessee further submitted a chart stating that all the interest income has been earned by the assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rnataka) [28-10-2014]. In this decision the honourable Karnataka High Court has categorically held that "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 of providing credit facilities to its members, earns profits and gains of business by providing credit facilities to its members. The interest income so derived ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....me cannot be said to be attributable either to the activity mentioned in Section 80P(2)(a)(i) of the Act or under Section 80P(2)(a)(iii) of the Act. Therefore in the facts of the said case, the Apex Court held the assessing officer was right in taxing the interest income indicated above under Section 56 of the Act. Further they made it clear that they are confining the said judgment to the facts of that case. Therefore it is clear, Supreme Court was not laying down any law. 10. In the instant case, the amount which was invested in banks to earn interest was not an amount due to any members. It was not the liability. It was not shown as liability in their account. In fact this amount which is in the nature of profits and gains, was ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....revenue authorities of Principal Commissioner of Income-tax, Hubballi vs. Totagars Co-operative Sale Society [2017] 83 taxmann.com 140 (Karnataka)/[2017] 395 ITR 611 (Karnataka)/[2017] 297 CTR 158 (Karnataka)[16-06-2017] is with respect to the interest income earned by the assessee which is chargeable to tax under the head income from other sources. Here it is not the case of the assessee that such income is chargeable to tax as income from other sources as there is no finding that the income of bank interest earned by the assessee is not covered by the decision of the honourable Karnataka High Court stated above wherein it has been held that this income is part of the business profits of the assessee. 11. In view of facts of the present....