SHREE KESHORAI PATAN SAHAKARI SUGAR MILL, BUNDI V. ITO, BUNDI

CO 24/JPR/2017

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3475 (ITAT-JAIPUR)
• Duration Of Justice: 7 month(s) 18 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 31-01-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 12-06-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: MAHENDRA GARGIEYA DHK
• Keywords: Business income
• Section: 37; 56

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SIN GH YADAV, AM VK;DJ VIHY LA-@ ITA NOS. 418 & 419/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2013-14 & 2014-15. INCOME-TAX OFFICER, BUNDI. CUKE VS. SHREE KESHORAI PATAN SAHAKARI SUGAR MILL, KESHORAI PATAN, BUNDI. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AACAS 5985 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT VK;DJ VIHY LA-@ C.O. NO. 23 & 24/JP/2017 ARISING OUT OF ITA NO. 418 & 419/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14 & 2014-15 SHREE KESHORAI PATAN SAHKARI SUGAR MILL KESHORAI PATAN, BUNDI. CUKE VS. THE ITO, BUNDI. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AACAS 5985 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A. VERMA (ADDL CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MAHENDRA GARGIEYA (ADVOCATE) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 11.01.2018. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 31/01/2018. VKNS'K@ ORDER PER BENCH THESE TWO APPEALS BY THE REVENUE AND CROSS OBJECTIO NS BY THE ASSESSEE ARE DIRECTED AGAINST TWO SEPARATE ORDERS OF LD. CIT(A) BOTH DATED 14.3.2017 FOR THE ASSESSMENT YEAR 2013-14 & 2014-15 RESPECTIVELY. 2 ITA NOS & CO NOS. 418 & 419/JP/2017 AND 23 & 24/JP/ 2017. SH. KESHORAI PAATAN SAHAKARI SUGAR MILL , BUNDI. 2. FIRST WE TAKE UP REVENUES APPEAL PERTAINING TO THE A.Y. 2013-14 WHEREIN THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A), KOTA HAS ERRED IN:- 1. DELETING ADDITION OF RS. 2,65,43,871/- MADE BY DISA LLOWING DEDUCTION U/S 80P OF THE ACT WITHOUT APPRECIATING THE FACTS MENTI ONED BY THE AO IN THE ASSESSMENT ORDER. 2. THE APPELLANT CRAVES LIBERTY TO RAISE ADDITIONAL GR OUND AND TO MODIFY/ AMEND THE GROUND OF APPEAL AT THE TIME OF HEARING. 3. THE ASSESSEE IS A CO-OPERATIVE SOCIETY AND WAS R UNNING A SUGAR MILL, HOWEVER THE SUGAR MILL STOOD CLOSED SINCE THE YEAR 2003, AN D IS UNDER LIQUIDATION. THE ASSESSEE FILED ITS RETURN OF INCOME ON 30/10/2013 D ECLARING NIL INCOME, AFTER CLAIMING THE DEDUCTION U/S 80P(2) AND U/S 80(P)(2)(B) OF R S. 2,65,43,871/-. THE AO DENIED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE AS SESSEE IS NOT CARRYING OUT BANKING BUSINESS OR THE INCOME IS DERIVED FROM PROV IDING CREDIT FACILITIES TO ITS MEMBERS AS PER SECTION 80P(2)(A)(1) OF THE ACT . T HE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT(A). THE LD. CI T(A) HAS ALLOWED THE CLAIM OF DEDUCTION U/S 80P IN RESPECT OF THE ENTIRE AMOUNT O F RS. 2,65,43,871/-. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE REVENUE HAS FIL ED THE PRESENT APPEAL. 4. LD. D/R HAS SUBMITTED THAT THE ASSESSEE HAS EARN ED THE INCOME ON ACCOUNT OF INTEREST ON FDRS WITH CO-OPERATIVE BANK AND NOT AN AMOUNT DEPOSITED WITH OTHER CO-OPERATIVE SOCIETIES AND THEREFORE THE DEDUCTION U/S 8P(2)(D) IS NOT AVAILABLE ON SUCH INTEREST INCOME. HE HAS FURTHER CONTENDED THA T A PART OF THE INCOME HAS BEEN DERIVED FROM THE DEPOSITS MADE WITH BANKS AND NOT E VEN WITH CO-OPERATIVE BANKS. THEREFORE, THE DEDUCTION U/S 80P(2)(D) IS NOT AVAIL ABLE IN RESPECT OF THE INTEREST 3 ITA NOS & CO NOS. 418 & 419/JP/2017 AND 23 & 24/JP/ 2017. SH. KESHORAI PAATAN SAHAKARI SUGAR MILL , BUNDI. INCOME ON THE DEPOSITS MADE WITH THE BANKS OTHER TH AN CO-OPERATIVE BANK. HE HAS RELIED UPON THE ORDERS OF THE ASSESSING OFFICER. T HE LD. D/R HAS FURTHER CONTENDED THAT THE AO HAS ASSESSED INTEREST INCOME AS INCOME FROM OTHER SOURCES U/S 56 OF THE INCOME TAX ACT AND THEREFORE IN VIEW OF THE DEC ISION OF HONBLE SUPREME COURT IN CASE OF TOTAGARS CO-OPERATIVE SALE SOCEITY LTD. VS. ITO 32 2 ITR 283, DEDUCTION U/S 80P IS NOT AVAILABLE ON SUCH INCOME N OT DERIVED FROM THE BUSINESS ACTIVITY OF THE SOCIETY. 5. ON THE OTHER HAND, LD. AR OF THE ASSESSEE HAS SU BMITTED THAT A BARE PERUSAL OF SECTION 80P(2)(D) OF THE ACT SHOWS THAT TO GET T HE DEDUCTION UNDER THIS SECTION, A CO-OPERATIVE SOCIETY IS NOT REQUIRED TO PROVE ANYTH ING EXCEPT THAT THE INTEREST IS EARNED FROM THE INVESTMENT MADE IN FDRS WITH OTHER COOPERATIVE SOCIETY. THEREFORE, THE REQUIREMENT OF CARRYING ON THE BANKI NG BUSINESS OR OTHER BUSINESS WAS NOT MANDATORY FOR THE CLAIM OF BENEFIT U/S 80P( 2)(D) OF THE ACT. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT DATED 1 ST SEPTEMBER 2016 IN CASE OF CIT VS. RAJASTHAN RAJYA SAHAKARI KRAY VIKRAY SANGH LTD. DB ITA NOS. 139/2002, 20/2004, 24 /2004, 27/2004. THE LD. A/R HAS ALSO RELIED UPON THE DECISION OF THE HONBLE GU JARAT HIGH COURT IN THE CASE OF SURAT VANKAR SAHAKARI SANGH LTD. VS. ACIT 72 TAXMAN .COM 169 (GUJ.) AS WELL AS THE DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL DATED 15.01.2016 IN CASE OF LANDS END AND CO-OPERATIVE HOUSING SOCIETY LTD. VS. ITO IN IT A NO. 3566/MUM/2014. HENCE, THE LD. A/R HAS CONTENDED THAT A CO-OPERATIVE BANK IS PRIMARILY A CO-OPERATIVE SOCIETY AND SUB-CLASSIFICATION OF COOPERATIVE SOCIE TIES ENGAGED IN OTHER BUSINESS ACTIVITY IS ONLY FOR PROVIDING THE BENEFIT U/S 80P OF THE ACT WHEREAS FOR THE PURPOSE 4 ITA NOS & CO NOS. 418 & 419/JP/2017 AND 23 & 24/JP/ 2017. SH. KESHORAI PAATAN SAHAKARI SUGAR MILL , BUNDI. OF SECTION 80P(2)(D) THE DEPOSITS/INVESTMENT MADE I N THE COOPERATIVE SOCIETY INCLUDES COOPERATIVE BANKS. HE SUPPORTED THE ORDE R OF THE LD. CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. WE FIND THAT THE ENTIRE INCOME OF THE ASSE SSEE FOR THE YEAR UNDER CONSIDERATION IS ONLY FROM INTEREST ON DEPOSITS MAD E WITH BANK AS WELL AS COOPERATIVE BANKS. THE ASSESSEE IN ITS COMPUTATION OF INCOME HAS GIVEN THE DETAILS OF THE INTEREST INCOME WHICH COMPRISES THE GROSS IN TEREST RECEIPT OF RS. 2,85,47,071/- OUT OF WHICH INTEREST EARNED ON THE D EPOSITS IN SAVING BANK WITH SBBJ OF RS. 34,779/-. THE BALANCE INTEREST RECEIVED BY T HE ASSESSEE IS FROM THE DEPOSITS MADE WITH COOPERATIVE BANKS EXCEPT THE SMALL AMOUNT OF RS. 3,221/- AS INTEREST ON MOLLASSES FUND. AFTER REDUCING THE INTEREST PAID O N FDR LOANS FROM BUNDI CENTRAL CO-OPERATIVE BANK OF RS. 20,03,200/-, THE NET INTER EST INCOME WAS DECLARED BY THE ASSESSEE AT RS. 2,65,43,871/-. THE ASSESSEE CLAIME D DEDUCTION U/S 80P(2)(C)(II) IN RESPECT OF THE INTEREST DEPOSIT IN SAVING BANK WITH SBBJ OF RS. 34,779/- AND DEDUCTION U/S 80P(2)(D) IN RESPECT OF THE INTEREST FROM COOPERATIVE BANKS OF RS. 2,65,09,092/-. THE AO DISALLOWED THE CLAIM OF THE ASSESSEE IN TOTO, ON THE GROUND THAT THE ASSESSEE IS NOT IN THE BUSINESS OF BANKING OR NOT PROVIDING CREDIT FACILITIES TO ITS MEMBERS. THE LD. CIT(A) ALLOWED THE CLAIM OF T HE ASSESSEE BY FOLLOWING THE VARIOUS DECISIONS OF THE HONBLE HIGH COURT AS WELL AS THIS TRIBUNAL AS UNDER:- THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE H AD CLAIMED DEDUCTION U/ S 80P (2)(D) OF THE ACT IN RESPECT OF INTEREST OF RS. 2,65,43,870/ - ON FIXED DEPOSITS WITH COOP. BANKS. THE AO DISALLOWED THE SA ID DEDUCTION AS CLAIMED BY THE BY REJECTING THE CLAIM OF THE ASSESSEE BY HO LDING THAT SINCE THE APPELLANT ASSESSEE WAS NOT CARRYING OUT ANY COMMERC IAL ACTIVITIES SINCE YEAR 5 ITA NOS & CO NOS. 418 & 419/JP/2017 AND 23 & 24/JP/ 2017. SH. KESHORAI PAATAN SAHAKARI SUGAR MILL , BUNDI. 2000, IT WAS NOT PROVIDING ANY CREDIT FACILITIES TO ITS MEMBERS, SO IT WAS NOT ELIGIBLE FOR DEDUCTION U/S 80P (2) (A) (I) AND OTHE R SUB SECTIONS OF SECTION 80P. FROM THE FACTS OF THE CASE IT IS CLEAR THAT THE APP ELLANT WHICH IS A CO-OPERATIVE SUGAR MILL UNDER LIQUIDATION SINCE 2003, IN ORDER T O COMPENSATE IT FOR RECLAMATION OF SOME PART OF THE LAND OWNED BY IT, T HE STATE GOVERNMENT HAS GIVEN IT A COMPENSATION AMOUNT PREVIOUSLY WHICH HAD BEEN INVESTED IN BANK DEPOSITS BY THE APPELLANT & FROM WHICH INTEREST THE DAY TO DAY EXPENSES ARE BEING MET. THE A.O. HAS APPARENTLY NOT UNDERSTOOD THE PROVISI ONS INVOLVED & APPLIED PROVISIONS OF SECTION 80P (2) (A)(I) IN THE CASE. S UBSEQUENTLY HE HAS HELD THAT THE SOCIETY IS NOT ELIGIBLE FOR ANY OTHER DEDUCTION S U/S 80P. IT IS NOTABLE THAT THE ASSESSEE SUGAR MILL HAS NO O THER INCOME BESIDES THE INTEREST INCOME, BEING IN LIQUIDATION. IN ORDER TO CLAIM DEDUCTION U/S 80P (2)(D) OF THE ACT, THE ONLY CONDITION IS THAT THE A SSESSEE SHOULD BE A COOPERATIVE SOCIETY AND IT SHOULD BE HAVING INTERES T INCOME ACCRUED FROM INVESTMENT WITH OTHER COOPERATIVE SOCIETY (INCLUDIN G CO-OP. BANKS) WHICH IS A PART OF ITS GROSS TOTAL INCOME. WHILE THE ABOVE CASES ARE MORE ON ALLOWABILITY OF G ROSS INTEREST U/S 80P (2)(D), THEY EMPHASIZE THE ALLOWABILITY OF INTEREST RELATED DEDUCTION AS SUCH. THIS ISSUE HAS FINDINGS IN THE LANDMARK ORDER, HON BLE SUPREME COURT IN THE CASE OF TOTAGARS CO-OPERATIVE SALE SOCIETY LTD. VS . ITO 322 ITR 283 283 HELD THAT THE INTEREST INCOME FROM THE SHORT TERM DEPOSI TS AND SECURITIES NOT IMMEDIATELY REQUIRED IN THE BUSINESS OF THE ASSESSE E IS ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCE AND NO DEDUCTION U/ S 80P(A)(I) OF THE ACT IS ALLOWABLE. THUS THE SAID DECISION WAS DELIVERED BY THE HONBLE APEX COURT ON THE PROVISIONS OF SECTION 80P(2)(A)(I) OF THE ACT. IN THE CASE OF TOTAGAR'S CO-OPERATIVE SALE SOCIETY LTD V/ S ITO (SUPRA) THE HON'BLE SUPREME COURT WHILE INTERPRETING THE SECTIO N 80P(2)(A)(I) OF THE ACT HELD THAT SURPLUS FUNDS NOT IMMEDIATELY REQUIRED IN THE BUSINESS AND INVESTED 6 ITA NOS & CO NOS. 418 & 419/JP/2017 AND 23 & 24/JP/ 2017. SH. KESHORAI PAATAN SAHAKARI SUGAR MILL , BUNDI. IN THE SHORT TERM DEPOSIT WOULD BE ASSESSABLE UNDER THE HEAD 'INCOME FROM OTHER SOURCES' WHERE THE CO- OPERATIVE SOCIETY IS E NGAGED IN CARRYING ON BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS AND CONSEQUENTLY NO DEDUCTION IS ALLOWABLE U/S 80P(2)(A )(I) OF THE ACT. THUS, FROM A PERUSAL OF THE PROVISIONS OF U/S 80P(2 )(A)(I) AND 80P(2)(D) IT IS CLEAR THAT THE FORMER DEALS WITH DEDUCTION IN RESPE CT OF PROFITS AND GAIN OF BUSINESS IN CASE OF THE CO-OPERATIVE SOCIETY CARRYI NG ON BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS IF TH E SAID INCOME IS ASSESSABLE AS INCOME FROM BUSINESS WHEREAS LATTER PROVIDES FOR DE DUCTION IN RESPECT OF INCOME BY WAY INTEREST AND DIVIDEND DERIVED BY ASSE SSEE FROM ITS INVESTMENTS WITH OTHER COOPERATIVE SOCIETY. THUS IT IS AMPLY CLEAR THAT A COOPERATIVE SOCIETY CAN ONLY AVAIL DEDUCTION U/S 80 P(2)(A)(I) IN RESPECT OF ITS INCOME ASSESSABLE AS BUSINESS INCOME AND NOT AS INC OME FROM OTHER SOURCES IF IT CARRIES ON BUSINESS OF THE BANKING OR PROVIDI NG CREDIT FACILITIES TO ITS MEMBERS AND HAS INCOME ASSESSABLE UNDER THE HEAD BU SINESS WHEREAS FOR CLAIMING U/S 80P(2)(D) IT MUST HAVE INCOME OF INTER EST AND DIVIDEND ON INVESTMENTS WITH OTHER CO-OPERATIVE SOCIETY MAY OR MAY NOT BE ENGAGED IN THE BANKING FOR PROVIDING CREDIT FACILITIES TO ITS MEMBERS AND THE HEAD UNDER WHICH THE INCOME IS ASSESSABLE IS NOT MATERIAL FOR THE CLAIM OF DEDUCTION UNDER THIS SECTION. THE HONBLE SUPREME COURT IN THE CASE OF TOTAGAR'S C O-OPERATIVE SALE SOCIETY LTD.(SUPRA) HELD THAT A SOCIETY HAS SURPLUS FUNDS W HICH ARE INVESTED IN SHORT TERM DEPOSITS WHERE THE SOCIETY IS ENGAGED IN THE B USINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS IN THAT CASE THE SAID INCOME FROM SHORT TERM DEPOSITS SHALL BE TREATED AND ASSESSED A S INCOME FROM OTHER SOURCES AND DEDUCTION U/S 80(P)(2)(A)(I) WOULD NOT BE AVAILABLE MEANING THEREBY THAT DEDUCTION U/S 80(P)(2)(A)(I) IS AVAILA BLE ONLY IN RESPECT OF INCOME WHICH IS ASSESSABLE AS BUSINESS INCOME AND NOT AS I NCOME FROM OTHER SOURCES. WHEREAS IN DISTINCTION TO THIS , THE PROVI SIONS OF SECTION 80(P)(2)(D) OF THE ACT PROVIDES FOR DEDUCTION IN RESPECT OF INC OME OF A COOP SOCIETY BY 7 ITA NOS & CO NOS. 418 & 419/JP/2017 AND 23 & 24/JP/ 2017. SH. KESHORAI PAATAN SAHAKARI SUGAR MILL , BUNDI. WAY OF INTEREST OR DIVIDEND FROM ITS INVESTMENTS WI TH OTHER COOP SOCIETY IF SUCH INCOME IS INCLUDED IN THE GROSS TOTAL INCOME O F THE SUCH COOP SOCIETY. THE ITAT, MUMBAI HAS ALSO HELD THE SAME VIEW IN THE CASE OF LANDS END COOPERATIVE HOUSING SOCIETY VS. I.T.O. WARD-16(1)(3 ), MUMBAI IN ITA NO. 3566/MUM/ 2014 FOR ASSESSMENT YEAR: 2009-10 VIDE OR DER DATED 15/01/2016. IN VIEW THESE FACTS AND CIRCUMSTANCES I AM OF THE V IEW THAT THE ASSESSEE IS ENTITLED TO THE DEDUCTION OF RS.2, 65, 43,870/- IN RESPECT OF INTEREST RECEIVED/DERIVED BY IT OR414BSITS WITH COOP. BANKS UNDER SECTION 80(P)(2)(D). THEREFORE THE AO IS DIRECTED TO DELETE THE ABOVE DI SALLOWANCE AND SUBSEQUENT ADDITION MADE U/S 56 ACCORDINGLY. IN THE RESULT, THIS GROUND OF ASSESSEES APPEAL IS ALLOWED. 6.1 AS REGARDS THE CLAIM U/S 80P(2)(D), WE FIND THA T THE ONLY CONDITION FOR AVAILING THE DEDUCTION UNDER THIS PROVISION IS ANY INCOME BY WAY OF INTEREST OR DIVIDEND DERIVED BY THE COOPERATIVE SOCIETY FROM ITS INVESTM ENT WITH ANY OTHER COOPERATIVE SOCIETY, THE WHOLE OF SUCH INCOME IS ALLOWABLE FOR DEDUCTION U/S 80P(1). THEREFORE, THERE IS NO CONDITION FOR THE ASSESSEE SOCIETY TO E NGAGED IN THE ACTIVITY OF PROVIDE CREDITS TO THE MEMBERS OR BANKING BUSINESS FOR AVAI LING THE DEDUCTION U/S 80P(2)(D) READ WITH SECTION 80P(1) OF THE ACT. AS REGARDS TH E COOPERATIVE BANK SHALL BE TREATED AS COOPERATIVE SOCIETIES FOR THE PURPOSE OF THE INTEREST INCOME ON INVESTMENT IN SUCH COOPERATIVE BANK U/S 80P(2)(D) THE MUMBAI B ENCH OF THIS TRIBUNAL IN CASE OF LANDS END CO-OPERATIVE HOUSING SOCIETY LTD. VS. ITO (SUPRA), AFTER CONSIDERING THE DECISION OF THE HONBLE SUPREME COURT IN CASE OF TO TAGARS CO-OPERATIVE SALE SOCIETY LTD. VS. ITO (SUPRA) HAS CONSIDERED AND DECIDED THI S ISSUE IN PARA 8.3 AS UNDER:- 8.3 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL ON RECORD. WE FIND THAT THE CIT(A) ENHANCED THE INCOME OF THE ASSESSEE BY REJECTING THE 8 ITA NOS & CO NOS. 418 & 419/JP/2017 AND 23 & 24/JP/ 2017. SH. KESHORAI PAATAN SAHAKARI SUGAR MILL , BUNDI. DEDUCTION U/S 80P(2)(D) OF THE ACT OF RS.14,88,107/ - BEING INTEREST ON INVESTMENT WITH OTHER COOP. BANKS BY FOLLOWING THE DECISION IN THE CASE OF BANDRA SAMRUDDIHI CO-OPERATIVE HOUSING SOCIETY LTD. (SUPRA) WHICH WAS PASSED ON THE BASIS OF THE DECISION PASSED BY THE H ON'BLE SUPREME COURT IN THE CASE OF TOTAGAR'S CO-OPERATIVE SALE SOCIETY LTD . IN THE CASE OF TOTAGAR'S CO-OPERATIVE SALE SOCIETY LTD V/S ITAT (SUPRA) THE HON'BLE SUPREME COURT WHILE INTERPRETING THE SECTION 80P(2)(A)(I) OF THE ACT HELD THAT SURPLUS FUNDS NOT IMMEDIATELY REQUIRED IN THE BUSINESS AND INVEST ED IN THE SHORT TERM DEPOSIT WOULD BE ASSESSABLE UNDER THE HEAD 'INCOME FROM OTHER SOURCES' WHERE THE CO-OPERATIVE SOCIETY IS ENGAGED IN CARRYI NG ON BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS AND C ONSEQUENTLY NO DEDUCTION IS ALLOWABLE U/S 80P(2)(A)(I) OF THE ACT. WHEREAS IN T HE CASE BEFORE US THE ISSUE IS WHETHER A CO-OPERATIVE SOCIETY WHICH HAS DERIVED INCOME ON INVESTMENT WITH COOPERATIVE BANKS IS ENTITLED TO DEDUCTION U/S 80P(2)(D). THE PROVISIONS OF SECTION 80P(2)(D) OF THE ACT PROVIDE DEDUCTION I N RESPECT OF INCOME BY WAY OF INTEREST OR DIVIDEND ON INVESTMENTS MADE WITH OT HER COOPERATIVE SOCIETY. FOR THE PURPOSES OF BETTER PROPER UNDERSTANDING OF THESE TWO PROVISIONS THE RELEVANT EXTRACT OF THE SECTION ARE REPRODUCED BELO W: 80P: DEDUCTION IN RESPECT OF INCOME OF CO-OPERATIVE SOCIETIES. 1. WHERE, IN THE CASE OF AN ASSESSSEE BEING A CO-OP ERATIVE SOCIETY, THE GROSS TOTAL INCOME, INCLUDES ANY INCOME REFERRED TO IN SU B-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. 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 PROVIDIN G CREDIT FACILITIES TO ITS MEMBERS. THE WHOLE OF THE AMOUNT OF PROFITS AND GAINS OF BUS INESS ATTRIBUTABLE TO ANY ONE OR MORE OF MUCH ATTRIBUTES. (D)IN RESPECT OF ANY INCOME BY WAY OF INTEREST OR D IVIDENDS DERIVED BY THE CO- OPERATIVE SOCIETY FROM ITS INVESTMENTS WITH ANY OTH ER CO-OPERATIVE SOCIETY, THE WHOLE OF SUCH INCOME.' 9 ITA NOS & CO NOS. 418 & 419/JP/2017 AND 23 & 24/JP/ 2017. SH. KESHORAI PAATAN SAHAKARI SUGAR MILL , BUNDI. FROM THE CLOSE PERUSAL OF THE PROVISIONS OF U/S 80P (2)(A)(I) AND 80P(2)(D) IT IS CLEAR THAT THE FORMER DEALS WITH DE DUCTION IN RESPECT OF PROFITS AND GAIN OF BUSINESS IN CASE OF THE CO-OPERATIVE SO CIETY CARRYING ON BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS ME MBERS IF THE SAID INCOME IS ASSESSABLE AS INCOME FROM BUSINESS WHEREAS LATTER P ROVIDES FOR DEDUCTION IN RESPECT OF INCOME BY WAY INTEREST AND DIVIDEND DERI VED BY ASSESSEE FROM ITS INVESTMENTS WITH OTHER COOPERATIVE SOCIETY. THUS IT IS AMPLY CLEAR THAT A COOPERATIVE SOCIETY CAN ONLY AVAIL DEDUCTION U/S 80 P(2)(D)(I) IN RESPECT OF ITS INCOME ASSESSABLE AS BUSINESS INCOME AND NOT AS INC OME FROM OTHER SOURCES IF IT CARRIES ON BUSINESS OF THE BANKING OR PROVIDI NG CREDIT FACILITIES TO ITS MEMBERS AND HAS INCOME ASSESSABLE UNDER THE HEAD BU SINESS WHEREAS FOR CLAIMING U/S 80P(2)(D) IT MUST HAVE INCOME OF INTER EST AND DIVIDEND ON INVESTMENTS WITH OTHER CO-OPERATIVE SOCIETY MAY OR MAY NOT BE ENGAGED IN THE BANKING FOR PROVIDING CREDIT FACILITIES TO ITS MEMBERS AND THE HEAD UNDER WHICH THE INCOME IS ASSESSABLE IS NOT MATERIAL FOR THE CLAIM OF DEDUCTION UNDER THIS SECTION. NOW WILL EVALUATE THE ASSESSEE' S CASE IN THE LIGHT OF THE DECISION OF THE HON'BLE SUPREME COURT. THE HONBLE S UPREME COURT IN THE CASE OF TOTAGAR'S CO-OPERATIVE SALE SOCIETY LTD.(SUPRA) HELD THAT A SOCIETY HAS SURPLUS FUNDS WHICH ARE INVESTED IN SHORT TERM DEPO SITS WHERE THE SOCIETY IS ENGAGED IN THE BUSINESS OF BANKING OR PROVIDING CRE DIT FACILITIES TO ITS MEMBERS IN THAT CASE THE SAID INCOME FROM SHORT TER M DEPOSITS SHALL BE TREATED AND ASSESSED AS INCOME FROM OTHER SOURCES A ND DEDUCTION U/S 80(P)(2)(A)(I) WOULD NOT BE AVAILABLE MEANING THERE BY THAT DEDUCTION U/S 80(P)(2)(A)(I) IS AVAILABLE ONLY IN RESPECT OF INCO ME WHICH IS ASSESSABLE AS BUSINESS INCOME AND NOT AS INCOME FROM OTHER SOURCE S. WHEREAS IN DISTINCTION TO THIS , THE PROVISIONS OF SECTION 80( P)(2)(D) OF THE ACT PROVIDES FOR DEDUCTION IN RESPECT OF INCOME OF A COOP SOCIET Y BY WAY OF INTEREST OR DIVIDEND FROM ITS INVESTMENTS WITH OTHER COOP. SOCI ETY IF SUCH INCOME IS INCLUDED IN THE GROSS TOTAL INCOME OF THE SUCH COOP SOCIETY. IN VIEW THESE FACTS AND CIRCUMSTANCES WE ARE OF THE CONSIDERED VI EW THAT THE ASSESSEE IS ENTITLED TO THE DEDUCTION OF RS. 14,88,107/-IN RESP ECT OF INTEREST RECEIVED/DERIVED BY IT ON DEPOSITS WITH COOP. BANKS AND THEREFORE THE APPEAL 10 ITA NOS & CO NOS. 418 & 419/JP/2017 AND 23 & 24/JP/ 2017. SH. KESHORAI PAATAN SAHAKARI SUGAR MILL , BUNDI. OF THE ASSESSEE IS ALLOWED BY REVERSING THE ORDER O F THE CIT(A). THE AO IS DIRECTLY ACCORDINGLY. 6.2 WE FURTHER NOTE THAT THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. RAJASTHAN RAJYA SAHAKARI KRAY VIKRAY SANGH LTD. (SUPRA) BY FOLLOWING THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF SURAT VANKAR SAHAKARI SANGH LTD. VS. ACIT, 72 TAXMANN.COM 169 HAS HELD IN AS UN DER: 8. WE HAVE CONSIDERED THE DECISIONS CITED BY LEARNED A DVOCATE FOR THE ASSESSEE AS WELL AS THE REVENUE. WE FEEL THAT THE DECISIONS CITED BY THE LEARNED ADVOCATE FOR THE ASSESSEE SHALL BE APPLICABLE ON THE FACTS OF THE PRESENT CAS E. IN THE CASE OF K. NANDAKUMAR V. ITO [1993] 204 ITR 856/[1994] 72 TAXMAN 223 (KER.) , THE KERALA HIGH COURT HAS HELD AS UNDER: '4. THE EFFECT OF SECTION 80AB IS THAT, FOR THE PUR POSE OF COMPUTING THE DEDUCTION UNDER SECTION 80L, THE AMOUNT OF INCOME OF THAT NAT URE AS COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF THE ACT SHALL ALONE BE DEEME D TO BE THE AMOUNT OF INCOME OF THAT NATURE. WHAT THE SECTION MEANS IS THAT THE NET INCOME BY WAY OF INTEREST COMPUTED IN THE MANNER PROVIDED BY THE PROVISIONS O F THE ACT SHALL ALONE BE TAKEN INTO ACCOUNT FOR COMPUTING THE BENEFIT. BUT IT MUST BE NOTED THAT PAYMENT OF INTEREST UNDER A LOAN TRANSACTION INCURRED FOR THE PURPOSE O F DERIVING INCOME FROM BUSINESS IS NOT AN ITEM WHICH ARISES IN THE COMPUTATION OF INTE REST INCOME 'IN ACCORDANCE WITH THE PROVISIONS' OF THE ACT. THE SAID AMOUNT HAS TO BE PAID IRRESPECTIVE OF WHETHER ANY INTEREST INCOME IS OTHERWISE RECEIVED OR NOT. THOUG H THE INTEREST IS PAYABLE TO THE SAME BANK, THE FACT REMAINS THAT THE AMOUNT OF INCO ME BY-WAY OF INTEREST IS NOT CALCULATED UNDER THE PROVISIONS OF THE ACT WITH REF ERENCE TO SUCH OUTGOINGS WHICH FALL UNDER DIFFERENT HEADS. THE ASSESSEE IS ENTITLED TO DEDUCTION UNDER SECTION 37 OF ALL EXPENDITURE INCURRED FOR THE PURPOSE OF DERIVING TH E BUSINESS INCOME, AND IT IS UNDER THAT HEAD THAT THE INTEREST PAID ON THE LOAN TAKEN FROM THE BANK IS DEDUCTED. THE NET AMOUNT OF INTEREST CONTEMPLATED BY SECTION 80AB SHO ULD TAKE IN THE NET AMOUNT ARRIVED AT AFTER MEETING THE EXPENSES DEDUCTIBLE FR OM THAT ITEM UNDER THE PROVISIONS OF THE ACT AS EXPLAINED ABOVE. THAT IS NOT THE CASE HE RE. THEREFORE, SECTION 80AB HAS NO APPLICATION TO THE FACTS OF THESE CASES. THE INTERE ST PAID ON THE LOAN TRANSACTIONS HAS TO BE DEDUCTED FROM THE BUSINESS INCOME, AND NOT FROM THE INTEREST RECEIVED FROM THE BANK ON THE FIXED DEPOSITS. THE ASSESSEES WERE THER EFORE RIGHT IN THE SUBMISSIONS WHICH THEY MADE BEFORE THE COMMISSIONER OF INCOME-T AX IN THE REVISION PETITIONS WHICH THEY FILED. THIS ASPECT OF THE MATTER HAS BEE N OVERLOOKED BY THE COMMISSIONER IN PASSING THE ORDER, EXHIBIT P-5.' 8.1 SIMILARLY, IN THE CASE OF DOABA CO-OPERATIVE SUGAR MILLS LTD ( SUPRA ), THE PUNJAB & HARYANA HIGH COURT HAS HELD AS UNDER: '5. THE CONTENTION OF MR. GUPTA, LEARNED COUNSEL AP PEARING FOR THE REVENUE, IS THAT THE TRIBUNAL WAS WRONG IN ALLOWING DEDUCTION UNDER SECTION 80P(2) (D) OF THE ACT BECAUSE IT IS NOT ESTABLISHED THAT THE ASSESSEE HAD DERIVED THE INTEREST BY INVESTING ALL THE AMOUNT OF SURPLUS FUNDS. IT IS FURTHER CONTENDE D BY MR. GUPTA THAT THE ASSESSEE HAS 11 ITA NOS & CO NOS. 418 & 419/JP/2017 AND 23 & 24/JP/ 2017. SH. KESHORAI PAATAN SAHAKARI SUGAR MILL , BUNDI. PAID INTEREST TO JALANDHAR CENTRAL CO-OPERATIVE BAN K AND HAS ALSO RECEIVED INTEREST FROM THE SAID CO- OPERATIVE BANK, THEREBY SHOWING T HAT THE ASSESSEE HAS ON THE AGGREGATE PAID INTEREST TO THE BANK AND, THEREFORE, NO DEDUCTION UNDER SECTION 80P(2)(D) CAN BE ALLOWED. TO APPRECIATE THIS ARGUME NT, WE HAVE TO LOOK TO THE PROVISIONS OF SECTION 80P(2)(D) OF THE ACT, FOR FAC ILITY OF REFERENCE, IT IS REPRODUCED AS UNDER : '80P. (2)(D) IN RESPECT OF ANY INCOME BY WAY OF INT EREST OR DIVIDENDS DERIVED BY THE CO-OPERATIVE SOCIETY FROM ITS INVESTMENTS WITH ANY OTHER CO- OPERATIVE SOCIETY, THE WHOLE OF SUCH INCOME.' 6. SO FAR AS THE PRINCIPLE OF INTERPRETATION APPLIC ABLE TO A TAXING STATUTE IS CONCERNED, WE CAN DO NO BETTER THAN TO QUOTE THE BY-NOW CLASSI C WORDS OF ROWLATT J., IN CAPE BRANDY SYNDICATE V. IRC [1921] 1 KB 64, 71 : '...IN A TAXING ACT, ONE HAS TO LOOK MERELY AT WHAT IS CLEARLY SAID. THERE IS NO ROOM FOR ANY INTENDMENT. THERE IS NO EQUITY ABOUT A TAX. THE RE IS NO PRESUMPTION AS TO A TAX. NOTHING IS TO BE READ IN, NOTHING IS TO BE IMPLIED. ONE CAN ONLY LOOK FAIRLY AT THE LANGUAGE USED,' 7. THE PRINCIPLE LAID DOWN BY ROWLATT J., HAS ALSO BEEN TIME AND AGAIN APPROVED AND APPLIED BY THE SUPREME COURT IN DIFFERENT CASES INC LUDING THE ONE, HANSRAJ GORDHANDAS V. H. H. DAVE, ASSISTANT COLLECTOR OF CENTRAL EXCISE A ND CUSTOMS , AIR 1970 SC 755, 759. 8. SECTION 80P(2)(D) OF THE ACT ALLOWS WHOLE DEDUCT ION OF AN INCOME BY WAY OF INTEREST OR DIVIDENDS DERIVED BY THE CO-OPERATIVE S OCIETY FROM ITS INVESTMENT WITH ANY OTHER CO-OPERATIVE SOCIETY. THIS PROVISION DOES NOT MAKE ANY DISTINCTION IN REGARD TO SOURCE OF THE INVESTMENT BECAUSE THIS SECTION ENVIS AGES DEDUCTION IN RESPECT OF ANY INCOME DERIVED BY THE CO-OPERATIVE SOCIETY FROM ANY INVESTMENT WITH A CO-OPERATIVE SOCIETY. IT IS IMMATERIAL WHETHER ANY INTEREST PAID TO THE CO- OPERATIVE SOCIETY EXCEEDS THE INTEREST RECEIVED FROM THE BANK ON INVESTMENTS. THE REVENUE IS NOT REQUIRED TO LOOK TO THE NATURE OF THE INVESTMENT WHETHER IT WAS FROM ITS SURPLUS FUNDS OR OTHERWISE. THE ACT DOES NOT SPEAK OF ANY ADJUSTMENT AS SOUGHT TO BE MADE OUT BY LEARNED COUNSEL FOR THE REVENUE. THE PROVISION DOES NOT INDICATE ANY SUCH ADJUSTMENT IN REGARD TO INTEREST DERIVED FROM THE CO-OPERATIVE SOCIETY FROM ITS INVESTMENT IN ANY OTHER CO-OPERATIVE SOCIETY. THEREFORE, WE DO NOT AG REE WITH THE ARGUMENT ADVANCED BY LEARNED COUNSEL FOR THE REVENUE. IN OUR OPINION, TH E LEARNED TRIBUNAL WAS RIGHT IN LAW IN ALLOWING DEDUCTION UNDER SECTION 80P(2)(D) OF TH E INCOME- TAX ACT, 1961. IN RESPECT OF INTEREST OF RS. 4,00,919 ON ACCOUNT OF I NTEREST RECEIVED FROM NAWANSHALN CENTRAL CO-OPERATIVE BANK WITHOUT ADJUSTING THE INT EREST PAID TO THE HANK. THEREFORE, THE REFERENCE IS ANSWERED AGAINST THE REVENUE IN TH E AFFIRMATIVE AND IN FAVOUR OF THE ASSESSEE.' 8.2 MOREOVER, THE BOMBAY HIGH COURT IN THE CASE OF BAI BHURIBEN LALLUBHAI ( SUPRA ) HAS HELD THAT THE PURPOSE FOR WHICH THE ASSESSEE BO RROWED MONEY HAD NO CONNECTION WHETHER DIRECT OR INDIRECT WITH THE INCOME WHICH SH E EARNED FROM THE FIXED DEPOSIT AND THAT SHE WAS NOT ENTITLED TO THE DEDUCTION CLAI MED UNDER SECTION 12(2). THE HIGH COURT HELD THAT IF AN ASSESSEE HAD NO OPTION EXCEPT TO INCUR AN EXPENDITURE IN ORDER TO MAKE THE EARNING OF AN INCOME POSSIBLE, THEN UNDOUB TEDLY THE EXERCISE OF THAT OPTION IS COMPULSORY AND ANY EXPENDITURE INCURRED BY REASO N OF THE EXERCISE OF THAT OPTION WOULD COME WITHIN THE AMBIT OF SECTION 12(2) OF THE INDIAN INCOME-TAX ACT BUT 12 ITA NOS & CO NOS. 418 & 419/JP/2017 AND 23 & 24/JP/ 2017. SH. KESHORAI PAATAN SAHAKARI SUGAR MILL , BUNDI. WHERE THE OPTION HAS NO CONNECTION WITH THE CARRYIN G ON OF THE BUSINESS OR THE EARNING OF THE INCOME AND THE OPTION DEPENDS UPON PERSONAL CONSIDERATIONS OR UPON MOTIVES OF THE ASSESSEE, THAT EXPENDITURE CANNOT POSSIBLY C OME WITHIN THE AMBIT OF SECTION 12(2). IN THE PRESENT CASE, THE LOAN WAS TAKEN FOR BUSINESS PURPOSE MORE PARTICULARLY PURCHASE OF YARN AND NOT FOR FIXED DEPOSITS. 9. IN VIEW OF THE ABOVE, THE QUESTIONS RAISED IN THE P RESENT APPEALS ARE ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. THE ORDER PASSED BY THE TRIBUNAL IS ACCORDINGLY QUASHED AND SET ASIDE. 6. FURTHER THE HONBLE KARNATAKA HIGH COURT IN CAS E OF PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY 392 ITR 0074 AS RELIED UPON BY THE LD. AR OF THE ASSESSEE AS HELD IN PARA 7 TO 11 AS UNDER:- 7. HOWEVER, THE CONTENTION BEING TAKEN BY THE LEAR NED COUNSEL IS UNTENABLE. FOR THE ISSUE THAT WAS BEFORE THE ITAT, WAS A LIMIT ED ONE, NAMELY WHETHER FOR THE PURPOSE OF SECTION 80P(2)(D) OF THE ACT, A CO-OPERATIVE BANK SHOULD BE CONSIDERED AS A CO-OPERATIVE SOCIETY OR NOT? FOR , IF A CO OPERATIVE BANK IS CONSIDERED TO BE A CO-OPERATIVE SOCIETY, THEN ANY I NTEREST EARNED BY THE CO- OPERATIVE SOCIETY FROM A CO-OPERATIVE BANK WOULD NE CESSARILY BE DEDUCTABLE UNDER SECTION 80P(1) OF THE ACT. 8. THE ISSUE WHETHER A CO-OPERATIVE BANK IS CONSIDE RED TO BE A CO-OPERATIVE SOCIETY IS NO LONGER RES INTEGRA. FOR THE SAID ISSU E HAS BEEN DECIDED BY THE ITAT ITSELF IN DIFFERENT CASES. MOREOVER THE WORD ' CO-OPERATIVE SOCIETY' ARE THE WORDS OF A LARGE EXTENT, AND DENOTES A GENUS, W HEREAS THE WORD 'CO- OPERATIVE BANK' IS A WORD OF LIMITED EXTENT, WHICH MERELY DEMARCATES AND IDENTIFIES A PARTICULAR SPECIES OF THE GENUS CO-OPE RATIVE SOCIETIES. CO- OPERATIVE SOCIETY CAN BE OF DIFFERENT NATURE, AND C AN BE INVOLVED IN DIFFERENT ACTIVITIES; THE CO-OPERATIVE SOCIETY BANK IS MERELY A VARIETY OF THE CO- OPERATIVE SOCIETIES. THUS THE CO-OPERATIVE BANK WHI CH IS A SPECIES OF THE GENUS WOULD NECESSARILY BE COVERED BY THE WORD 'CO- OPERATIVE SOCIETY'. 9. FURTHERMORE, EVEN ACCORDING TO SECTION 56(I)(CCV ) OF THE BANKING REGULATIONS ACT, 1949, DEFINES A PRIMARY CO-OPERATI VE SOCIETY BANK AS THE 13 ITA NOS & CO NOS. 418 & 419/JP/2017 AND 23 & 24/JP/ 2017. SH. KESHORAI PAATAN SAHAKARI SUGAR MILL , BUNDI. MEANING OF CO-OPERATIVE SOCIETY. THEREFORE, A CO-OP ERATIVE SOCIETY BANK WOULD BE INCLUDED IN THE WORDS 'CO-OPERATIVE SOCIET Y'. 10. ADMITTEDLY, THE INTEREST WHICH THE ASSESSEE RES PONDENT HAD EARNED WAS FROM A CO-OPERATIVE SOCIETY BANK. THEREFORE, ACCORD ING TO SEC. 80P(2)(D) OF THE I.T. ACT, THE SAID AMOUNT OF INTEREST EARNED FR OM A CO-OPERATIVE SOCIETY BANK WOULD BE DEDUCTABLE FROM THE GROSS INCOME OF T HE CO-OPERATIVE SOCIETY IN ORDER TO ASSESS ITS TOTAL INCOME. THEREFORE, THE ASSESSING OFFICER WAS NOT JUSTIFIED IN DENYING THE SAID DEDUCTION TO THE ASSE SSEE RESPONDENT. 11. THE LEARNED COUNSEL HAS RELIED ON THE CASE OF T HE TOTGARS CO-OPERATIVE SALE SOCIETY LTD. VS. INCOME TAX. OFFICER,(SUPRA). HOWEVER, THE SAID CASE DEALT WITH THE INTERPRETATION, AND THE DEDUCTION, W HICH WOULD BE APPLICABLE UNDER SECTION 80P(2)(A)(I) OF THE I.T. ACT. FOR, IN THE PRESENT CASE THE INTERPRETATION THAT IS REQUIRED IS OF SECTION 80P(2 )(D) OF THE I.T. ACT AND NOT SECTION 80P(2)(A)(I) OF THE I.T. ACT. THEREFORE, TH E SAID JUDGMENT IS INAPPLICABLE TO THE PRESENT CASE. THUS, NEITHER OF THE TWO SUBSTANTIAL QUESTIONS OF LAW CANVASSED BY THE LEARNED COUNSEL F OR THE REVENUE EVEN ARISE IN THE PRESENT CASE. 6.4 THUS, THE HONBLE HIGH COURT HAS HELD THAT THE CO-OPERATIVE BANK IS CONSIDERED TO A COOPERATIVE SOCIETY FOR THE PURPOSE OF SECTION 80P(2)(D). ACCORDINGLY, IN VIEW OF THE DECISIONS AS CITED (SUP RA), WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDERS OF THE LD. CIT(A) TO THE E XTENT OF THE ALLOWING THE CLAIM OF THE ASSESSEE U/S 80P(2)(D) IN RESPECT OF INTEREST INCOM E FROM DEPOSITS/FDRS WITH THE CO-OPERATIVE BANKS. 6.5 SO FAR AS THE ISSUE OF DEDUCTION U/S 80P(2)(C)( II) IN RESPECT OF THE INTEREST INCOME ON THE DEPOSITS IN SAVING BANK WITH SBBJ THE LD. CIT(A) HAS NEITHER DISCUSSED THIS ISSUE IN THE IMPUGNED ORDER NOR ADJU DICATED SEPARATELY. THE LD. CIT(A) HAS CONSIDERED BOTH THE ISSUES TOGETHER ON T HE PRESUMPTION THAT THE ENTIRE 14 ITA NOS & CO NOS. 418 & 419/JP/2017 AND 23 & 24/JP/ 2017. SH. KESHORAI PAATAN SAHAKARI SUGAR MILL , BUNDI. INCOME IS FROM INVESTMENTS/DEPOSITS WITH CO-OPERATI VE BANKS. THEREFORE, THE ISSUE OF DEDUCTION U/S 80P(2)(C)(II) IS SET ASIDE TO THE RECORD OF THE LD. CIT(A) FOR FRESH ADJUDICATION. 7. FOR THE ASSESSMENT YEAR 2014-15 THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A), KOTA HAS ERRED IN:- 1. DELETING ADDITION OF RS. 1,72,42,513/- MADE BY DISA LLOWING DEDUCTION U/S 80P OF THE ACT WITHOUT APPRECIATING THE FACTS MENTI ONED BY THE AO IN THE ASSESSMENT ORDER; 2. THE APPELLANT CRAVES LIBERTY TO RAISE ADDITIONAL GR OUND AND TO MODIFY/AMEND THE GROUND OF APPEAL AT THE TIME OF HE ARING. 7.1 IT IS MANIFEST FROM THE GROUNDS RAISED BY THE R EVENUE THAT IT IS IDENTICAL AS RAISED FOR THE AY 2013-14 EXCEPT THE QUANTUM OF DED UCTION DISALLOWED BY THE AO AND ALLOWED BY THE LD. CIT(A). 7.2 WE HAVE HEARD THE LD. D/R AS WELL AS LD. AR AND CONSIDERED THE RELEVANT MATERIAL ON RECORD. AS REGARDS THE DEDUCTION U/S 8 0P(2)(D) THE ISSUE STANDS DECIDED FOR THE AY 2013-14 AND ACCORDINGLY, THE ORDER OF TH E LD. CIT(A) TO THE EXTENT OF THE CLAIM U/S 80P(2)(D) IS UPHELD. WE FIND THAT FOR TH E AY 2014-15 THE ASSESSEE CLAIMED DEDUCTION U/S 80P(2)(C)(II) OF RS. 20,685/- ON ACCO UNT OF INTEREST INCOME ON SAVING BANK ACCOUNT OF SBBJ DEDUCTION 80P(2)(D) IN RESPECT OF THE INTEREST ON FDRS/ DEPOSITS WITH CO-OPERATIVE BANKS AND IN RESPECT OF RENT FOR LETTING OUT FROM GODOWNS OF RS. 8,61,399/-, THE AO DISALLOWED THE ENTIRE CL AIM OF THE ASSESSEE AND THE LD. CIT(A) HAS ALLOWED THE SAME WITHOUT DISCUSSING EACH OF THE CLAIMS SEPARATELY. THEREFORE, THE LD. CIT(A) HAS NOT DISCUSSED THE ISS UE OF DEDUCTION U/S 80P(2)(C)(II) 15 ITA NOS & CO NOS. 418 & 419/JP/2017 AND 23 & 24/JP/ 2017. SH. KESHORAI PAATAN SAHAKARI SUGAR MILL , BUNDI. AND ACCORDINGLY, THIS ISSUE IS COMMON AS THE ISSUE INVOLVED IN THE AY 2013-14 AND HENCE, THE SAME IS SET ASIDE TO THE RECORD OF THE L D. CIT(A) FOR FRESH ADJUDICATION. SIMILARLY, THE LD. CIT(A) HAS NOT DISCUSSED AND ADJ UDICATED THE ISSUE OF DEDUCTION U/S 80P(2)(E) IN RESPECT OF INCOME FROM LETTING OUT OF GODOWNS. THUS, THERE IS NO DISPUTE ABOUT THE ALLOWABILITY OF THIS DEDUCTION IN RESPECT OF THE RENTAL INCOME FROM LETTING OUT OF THE GODOWNS AS PER SECTION 80P(2)(E) AS THERE IS NO CONDITION FOR AVAILING THE DEDUCTION UNDER THIS PROVISION. HOWEV ER, SINCE THIS ISSUE HAS NOT BEEN ADJUDICATED BY THE AUTHORITIES BELOW THEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE FACT, WE SET ASIDE THIS ISSUE TO THE RECORD OF THE LD. CIT(A) FOR PROPER ADJUDICATION, AFTER GIVING AN OPPORTUNITY OF HEARING TO THE ASSES SEE. 8. NOW, WE TAKE UP CROSS OBJECTIONS OF THE ASSESSEE WHEREIN THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF C.O. FOR THE AY 201 3-14 & 2014-15. ASSESSMENT YEAR 2013-14 1. UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) KOTA HAS HELD IN HOLDING THAT DEDUCTION UNDER SECTI ON 80 P OF IT ACT 1961 IS LEGAL ONE. 2. OTHER GROUNDS AND FACTS SHALL BE SUBMITTED AT TH E HEARING TIME BEFORE YOUR HONOUR. ASSESSMENT YEAR 2014-15 1. UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) KOTA HAS HELD IN HOLDING THAT DEDUCTION UNDER SECTI ON 80 P OF IT ACT 1961 IS LEGAL ONE. 2. OTHER GROUNDS AND FACTS SHALL BE SUBMITTED AT TH E HEARING TIME BEFORE YOUR HONOUR. 8.1 AS IT IS APPARENT FROM THE GROUNDS RAISED BY TH E ASSESSEE IN THE CROSS OBJECTIONS THAT NO NEW GROUND OR ISSUE IS RAISED BY THE ASSESSEE, BUT THE CROSS 16 ITA NOS & CO NOS. 418 & 419/JP/2017 AND 23 & 24/JP/ 2017. SH. KESHORAI PAATAN SAHAKARI SUGAR MILL , BUNDI. OBJECTIONS ARE IN THE NATURE OF SUPPORTING THE IMPU GNED ORDERS OF THE LD. CIT(A). IN VIEW OF OUR FINDING ON THE REVENUES APPEAL, THE C. O FILED BY THE ASSESSEE BECOMES INFRUCTUOUS. 9. IN THE RESULT, APPEALS OF THE REVENUE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSE AND CROSS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31/01/2018. SD/- SD/- ( FOE FLAG ;KNO ( JH FOT; IKY JKO] ) (VIKRAM SINGH YADAV) ( VIJAY PAL RAO) YS[KK LNL; /ACCOUNTANT MEMBER U;KF;D LNL; / JUDICIAL MEMBER JAIPUR DATED:- 31/01/2018. POOJA/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- ITO, BUNDI. 2. THE RESPONDENT SHREE KESHORAI PATAN SAHAKARI S UGAR MILL, BUNDI. 3. THE CIT. 4. THE CIT (4), 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NOS & CO NO.418 & 419/JP/2017 AN D 23 & 24/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR