TaxTMI 
TaxTMI 
2026 (10) TMI 513
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....pposed to law, weight of evidence, probabilities, facts and circumstances of the Appellant's case. 2. Grounds on disallowance of Rs. 95,468/- claimed under section 80P: a. The learned CIT(A) has erred in upholding the order of the learned assessing officer wherein the interest income claimed as deduction under section 80P(2)(a)(i) was disallowed without appreciating the fact that such interest income is attributable to the business of the appellant and is eligible for deduction under section 80P(2)(a)(i) of the Act, on the facts and circumstances of the case. b. The investment on which the interest income is earned is on account of mandatory deposits to be maintained as per the Karnataka State Co-operative Societies Act, thus, interest received on such deposits is eligible for deduction under section 80P(2)(a) (i) of the Act on the facts and circumstances of the case. c. The money invested in the Co-operative Societies and Co-operative banks represents the temporary idle funds of the appellant and the interest received par takes the character of business income and eligible for deduction under section 80P(2)(a)(i) of the Act on the facts and ....
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....tion of Rs.1,470,635 under section 80P(2)(a)(i) and determined the business income at nil. He further treated the interest income of Rs.103,437 and other income of Rs.478,696, aggregating to Rs.582,133, as taxable income and denied any further deduction under section 80P(2)(d). The assessment order was passed on 14 December 2019. 5. Aggrieved by the assessment order, the assessee appealed to the learned CIT(A), who dismissed the appeal being the reasoning by the learned assessing officer for treating the bank interest as income from other sources. 6. The assessee is therefore in appeal before us, contending that Rs.582,133 should be allowed as a deduction under section 80P(2)(a)(i) of the Income-tax Act because the bank interest is attributable to its business of providing credit facilities to its members and is not taxable as income from other sources. The learned authorised representative, Shri S. V. Ravishankar, Advocate, submitted that the issue is squarely covered in the assessee's favour by the decision of the Hon'ble Karnataka High Court in Tumkur Merchants Co-operative Society, which, after considering the decision of the Hon'ble Supreme Court, held that the assessee ....
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....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 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 section-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 of providing credit facilities to its members, earns profits and gains of business by prov....
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.... no takers. Therefore they had deposited the money in a bank so as to earn 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 CIT v. Andhra Pradesh State co-operative Bank Ltd., [2011] 200 Taxman 220/12 taxmann.com 66. 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: 10. In Principal Commissioner of Income-tax, Hubballi v. Totagars Co-operative Sale Society [2017] 83 taxmann.com 140 (Karnataka) / [2017] 395 ITR 611 (Karnataka) / [2017] 297 CTR 158 (Karnataka), decided on 16 June 2017, the issue before the Hon'ble High Court was as follows: (I) "Whether the assessee, Totagar Co-operative Sale Society, Sirsi, is entitled to 100% deduction under Section 80P(2)(d) of the Income Tax Act, 1961 (for short &#....