Appeal Details
Counselvise Citation
[2019] 112 COUNSELVISE.COM (IT) 6977 (ITAT-PUNE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
7 month(s) 5 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
01-03-2019
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
SMC
Assessment Year
2015-2016
Appeal Filed On
24-07-2018
Judgement Text
] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH SMC, PUNE BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1250/PUN/2018 / ASSESSMENT YEAR : 2015-16 DHANASHREE MULTISTATE CREDIT CO - OPERATIVE SOCIETY LIMITED, DAMAJI ROAD, MURLIDHAR CHOWK, MANGALWEDHA, SOLAPUR 413 305. PAN : AABAD1879N. . / APPELLANT V/S THE INCOME TAX OFFICER, WARD 1, PANDHARPUR. . / RESPONDENT ASSESSEE BY : SHRI P.S. SHINGTE. REVENUE BY : SHRI RAJESH GAWALI. / ORDER PER ANIL CHATURVEDI, AM : 1. THIS APPEAL FILED BY THE ASSESSEE IS EMANATING OUT OF THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) 7, PUNE DATE D 27.04.2018 FOR THE ASSESSMENT YEAR 2015-16. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERIAL ON R ECORD ARE AS UNDER :- ASSESSEE IS A CO-OPERATIVE SOCIETY AND ITS MAIN ACTIVITIES ARE ACCEPTING DEPOSITS AND GRANTING LOANS TO ITS MEMBERS. AS SESSEE ELECTRONICALLY FILED ITS RETURN OF INCOME ON 23.09.2015 DECLARIN G TOTAL INCOME AT RS. NIL. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER / DATE OF HEARING : 22.01.2019 / DATE OF PRONOUNCEMENT: 01.03.2019 2 ASSESSMENT WAS FRAMED U/S 143(3) OF THE ACT VIDE ORDER D T30.10.2017 AND THE TOTAL INCOME WAS DETERMINED AT RS.20,16,130/-. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CARRIED THE MATTER BEFORE LD.C IT(A), WHO VIDE ORDER DT.27.04.2018 (IN APPEAL NO.PN/CIT(A)-7/WD-1/10152/2 017-18) GRANTED PARTIAL RELIEF TO THE ASSESSEE. AGGRIEVED BY THE ORDER OF LD .CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US AND HAS RAISED THE FOLLOWING EFFECTIVE GROUND : ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LOWER AUTHORITIES HAVE ERRED IN DENYING THE DEDUCTION U/S 80P(2)(A)(I) FOR THE INTEREST EARNED FROM DEPOSITS WITH NATIONALIZED BAN K, A SUM OF RS.19,83,126/- TREATING IT AS A INCOME FROM OTHER S OURCES BY DISREGARDING APPELLANTS CONTENTION IN THIS REGARD. 3. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ON PERU SING THE PROFIT AND LOSS ACCOUNT, AO NOTICED THAT ASSESSEE HAD E ARNED INTEREST INCOME FROM NATIONALIZED BANKS, THE DETAILS OF WHICH ARE LISTED AT PARA 6.1 OF THE ASSESSMENT ORDER. THE AGGREGATE OF SUCH INTE REST WAS RS.19,83,126/- WHICH WAS CLAIMED AS DEDUCTION U/S 80P(2)(A)(I) O F THE ACT. AO WAS OF THE VIEW THAT THE INTEREST INCOME EARNED BY THE ASSESSEE FROM NATIONALIZED BANKS DO NOT QUALIFY FOR DEDUCTION U/S 80 P(2) OF THE ACT, AS IT IS NOT OUT OF THE MAIN BUSINESS ACTIVITY OF THE A SSESSEE. HE THEREFORE CONSIDERED THE AFORESAID INTEREST INCOME TO BE TAXABLE AS INCOME FROM OTHER SOURCES AND DENIED THE CLAIM OF DEDU CTION U/S 80P OF THE ACT. AGGRIEVED BY THE ORDER OF AO, ASSESSEE CAR RIED THE MATTER BEFORE LD.CIT(A), WHO UPHELD THE ORDER OF AO. AGGRIEVED BY T HE ORDER OF LD.CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 4. BEFORE US, AT THE OUTSET, LD.A.R. SUBMITTED THAT THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO DENIAL OF CLAIM OF DEDUCT ION U/S 80P(2)(A)(I) OF THE ACT. LD.A.R. FURTHER SUBMITTED THAT THE ISSUE IN THE 3 PRESENT CASE IS DIRECTLY COVERED IN ASSESSEES FAVOUR B Y THE DECISION OF PUNE TRIBUNAL IN THE CASE OF ITO VS. SWA ASHOKRAO BANKAR NAGAR SAH. PATSANSTHA MARYADIT (IN ITA NO.1395/PUN/2015 DATED 25.01 .2018). HE ALSO PLACED ON RECORD THE COPY OF THE AFORESAID DECISION. HE FURTHER SUBMITTED THAT THE FACTS IN THE YEAR UNDER CONSIDERATIO N ARE IDENTICAL TO THE CASE OF SWA ASHOKRAO BANKAR NAGAR SAH. PATSANSTH A MARYADIT (SUPRA), WHEREIN THE ISSUE WAS DECIDED IN FAVOUR OF THE ASS ESSEE. LD.D.R. ON THE OTHER HAND, SUPPORTED THE ORDER OF AO. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT GROUND IS WITH RESPEC T TO DENIAL OF CLAIM OF DEDUCTION U/S 80P(2)(A)(I) OF THE ACT. WE FIND THAT IDENTICAL ISSUE ON DENIAL OF CLAIM OF DEDUCTION U/S 80P OF THE ACT ON THE INTEREST EARNED FROM DEPOSITS FROM BANKS AROSE IN THE CASE OF SWA ASHOKRAO BANKAR NAGAR SAH. PATSANSTHA MARYADIT (SUPRA) WHEREIN TH E CO-ORDINATE BENCH OF THE TRIBUNAL, BY FOLLOWING THE ORDER OF THE TRIB UNAL IN THE CASE OF ITO VS. NIPHAD NAGARI SAHAKARI PATSANSHTA LTD (IN ITA NO.1336/PUN/2011 DATED 31.07.2013) AND OTHER DECISIONS, DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER : 9. ON THE PERUSAL OF RECORD, WE FIND THAT THE ISSU E IN THE PRESENT APPEAL IS AGAINST THE CLAIM OF DEDUCTION UNDER SECTION 80P (2)(A)(I) OF THE ACT ON INTEREST INCOME RECEIVED FROM FIXED DEPOSITS WITH B ANK OF INDIA, HDFC BANK, STATE BANK OF INDIA, ICICI BANK AND BANK OF B ARODA. THE SAID ISSUE IS SQUARELY COVERED BY THE ORDER OF THE TRIBU NAL IN ITO VS. NIPHAD NAGARI SAHAKARI PATSANSTHA LTD. (SUPRA) WHEREIN THE TRIBUNAL HAD HELD THAT THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION UN DER SECTION 80P(2)(A)(I) OF THE ACT ON THE INTEREST INCOME RECEIVED BY IT ON BANK FIXED DEPOSITS. THE RELEVANT FINDINGS OF THE TRIBUNAL ARE REPRODUCED AT PAGE 9 OF THE APPELLATE ORDER BUT ARE NOT BEING REPRODUCED FOR THE SAKE OF BREVITY. 10. WE FURTHER FIND THAT THE ISSUE OF ALLOWABILITY OF DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT ON INTEREST INCOME EARNED BY THE ASSESSEE IN THE HANDS OF ASSESSEE WAS DECIDED BY THE TRIBUNAL I N ITA NO.1584/PN/2012, RELATING TO ASSESSMENT YEAR 2009-1 0, VIDE ORDER DATED 30.04.2014; THEREAFTER IN ITA NO.1394/PN/2015 , RELATING TO ASSESSMENT YEAR 2011-12, VIDE ORDER DATED 22.07.201 6 AND ALSO IN ITA NO.2006/PUN/2014, RELATING TO ASSESSMENT YEAR 2010- 11, VIDE ORDER 4 DATED 04.05.2017. THE TRIBUNAL IN ASSESSMENT YEAR 2 011- 12 HAD MADE REFERENCE TO THE RATIO LAID DOWN IN THE CASE OF SHR I LAXMI NARAYAN NAGARI SAHAKARI PAT SANSTHA MARYADIT IN ITA NO.604/PN/2014 , RELATING TO ASSESSMENT YEAR 2010-11, ORDER DATED 19.08.2015, WH EREIN RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE HONBLE HIGH CO URT OF KARNATAKA IN TUMKUR MERCHANTS SOUHARDS CREDIT COOPERATIVE LTD. V S. ITO REPORTED IN 55 TAXMANN.COM 447, WHEREIN IT WAS HELD THAT INTERE ST EARNED FROM SHORT TERM DEPOSITS WITH THE BANK WAS ENTITLED TO DEDUCTI ON UNDER SECTION 80P(2)(A)(I) OF THE ACT. THE HONBLE HIGH COURT OF K ARNATAKA AFTER CONSIDERING THE DECISION OF THE HON'BLE SUPREME COU RT IN THE CASE OF TOTGAR S COOPERATIVE SALE SOCIETY LTD. VS. ITO (2010) 322 ITR 283 (SC) HELD THAT THE INTEREST EARNED BY SUCH COOPERATIVE S OCIETIES ON SHORT TERM DEPOSITS WITH SCHEDULED BANKS IS ELIGIBLE FOR DEDUC TION UNDER SECTION 80P(2)(A)(I) OF THE ACT. THE TRIBUNAL ALSO CONSIDER ED THE CONTRARY DECISION OF THE HONBLE HIGH COURT OF DELHI IN MANTOLA CO-OPE RATIVE THRIFT & CREDIT SOCIETY LTD. VS. CIT AND HELD AS UNDER:- 9. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. T HE ONLY DISPUTE TO BE DECIDED IN THE GROUNDS RAISED BY THE ASSESSEE IS THAT WHETHER THE INTEREST AMOUNTING TO RS.25,01,774/- EA RNED BY THE ASSESSEE ON SHORT TERM DEPOSITS WITH BANKS HAS TO B E TREATED AS INCOME FROM OTHER SOURCES U/S.56 OR THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S.80P(2)(A)(I). WE FIND THE AO FOLLOWIN G THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF THE TOTGARS C OOPERATIVE SALE SOCIETY LTD. (SUPRA) TREATED THE INTEREST EARN ED FROM SUCH SHORT TERM DEPOSITS AS INCOME FROM OTHER SOURCES AND BROUGHT THE SAME TO TAX WHICH HAS BEEN UPHELD BY THE CIT(A) . 10. IT IS THE CASE OF THE ASSESSEE THAT IN VIEW OF THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF TUMKUR MERCHANTS SOUHARDS CREDIT COOPERATIVE LTD. (SUPRA) THE INTERE ST EARNED FROM SUCH SHORT TERM DEPOSITS WITH BANK IS ENTITLED TO D EDUCTION U/S.80P(2)(A)(I). WE FIND THE HONBLE HIGH COURT OF KARNATAKA AFTER CONSIDERING THE DECISION OF HONBLE SUPREME COURT I N THE CASE OF TOTGARS COOPERATIVE SALE SOCIETY LTD. (SUPRA) HELD THAT THE INTEREST EARNED BY SUCH COOPERATIVE SOCIETIES ON SHORT TERM DEPOSITS WITH SCHEDULED BANKS IS ELIGIBLE FOR DEDUCTION U/S.80P(2 )(A)(I). THE RELEVANT OBSERVATION OF THE HONBLE HIGH COURT FROM PARA 6 ONWARDS READ 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 ASSESSE E IS A COOPERATIVE SOCIETY PROVIDING CREDIT FACILITIES TO ITS MEMBERS. IT IS NOT CARRYING ON ANY OTHER BUSINESS. THE INTER EST INCOME EARNED BY THE ASSESSEE BY PROVIDING CREDIT FACILITI ES TO ITS MEMBERS IS DEPOSITED IN THE BANKS FOR A SHORT DURAT ION WHICH HAS EARNED INTEREST. THEREFORE, WHETHER THIS INTEREST IS ATTRIBUTABLE TO THE BUSINESS OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS, IS THE QUESTION. IN THIS REGARD, IT IS NECESSARY TO NOTICE THE RELEVANT PROVISION OF LAW I.E., SECTI ON 80P(2)(A)(I): 'DEDUCTION IN RESPECT OF INCOME OF COOPERATIVE SOCI ETIES: 80P (1) WHERE, IN THE CASE OF AN ASSESSEE BEING A COOPERATIVE SOCIETY, THE GROSS TOTAL INCOME INCLUDES ANY 5 INCOME REFERRED TO IN SUBSECTION (2), THERE SHALL B E DEDUCTED, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION, THE SUMS SPECIFIED IN SUBSECTION (2), IN C OMPUTING THE TOTAL INCOME OF THE ASSESSEE. (2) THE SUMS REFERRED TO IN SUBSECTION (1) SHALL BE THE FOLLOWING, NAMELY: (A) IN THE CASE OF COOPERATIVE SOCIETY ENGAGED IN (I) CARRYING ON THE BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS, OR (II) TO (VII) XX XX XX THE WHOLE OF THE AMOUNT OF PROFITS AND GAINS OF BUSINESS ATTRIBUTABLE TO ANY ONE OR MORE OF SUCH ACTIVITIES.' 7. THE WORD 'ATTRIBUTABLE' USED IN THE SAID SECTION IS OF GREAT IMPORTANCE. THE APEX COURT HAD AN OCCASION TO CONSIDER THE MEANING OF THE WORD 'ATTRIBUTABLE' AS SUPPOSED TO DERIVE FROM ITS USE IN VARIOUS OTHER PROVISIONS OF THE STATUTE IN THE CASE OF CAMBAY ELECTRIC SUPPLY INDUSTRIAL CO. LTD. V. CIT [1978] 1 13 ITR 84 (SC) AS UNDER: AS REGARDS THE ASPECT EMERGING FROM THE EXPRESSION 'ATTRIBUTABLE TO' OCCURRING IN THE PHRASE 'PROFITS AND GAINS ATTRIBUTABLE TO THE BUSINESS OF THE 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 ARISIN G 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 LEGISLATURE WANTED TO GIVE A RESTRICTED MEANING IN THE MANNER SUGGESTED B Y THE LEARNED SOLICITOR GENERAL, IT HAS USED THE EXPRESSION 'DERIVED FROM', AS, FOR INSTANCE, IN SECTION80J. IN OUR VIEW, SINCE THE EXPRESSION OF WI DER IMPORT, NAMELY, 'ATTRIBUTABLE TO', HAS BEEN USED, T HE 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 CERTAIN LY WIDER IN IMPORT THAN THE EXPRESSION 'DERIVED FROM'. WHENEVER THE LE GISLATURE WANTED TO GIVE A RESTRICTED MEANING, THEY HAVE USED THE EXPRESSION 'DERIVED FROM'. THE EXPRESSION 'ATTRIBUT ABLE TO' BEING OF WIDER IMPORT, THE SAID EXPRESSION IS USED BY THE LE GISLATURE 6 WHENEVER THEY INTENDED TO GATHER RECEIPTS FROM SOUR CES OTHER THAN THE ACTUAL CONDUCT OF THE BUSINESS. A COOPERATIVE S OCIETY WHICH IS CARRYING ON THE BUSINESS OF PROVIDING CREDIT FACILI TIES TO ITS MEMBERS, EARNS PROFITS AND GAINS OF BUSINESS BY PRO VIDING CREDIT FACILITIES TO ITS MEMBERS. THE INTEREST INCOME SO D ERIVED OR THE CAPITAL, IF NOT IMMEDIATELY REQUIRED TO BE LENT TO T HE MEMBERS, THEY CANNOT KEEP THE SAID AMOUNT IDLE. IF THEY DEPOSIT T HIS AMOUNT IN BANK SO AS TO EARN INTEREST, THE SAID INTEREST INCO ME IS ATTRIBUTABLE TO THE PROFITS AND GAINS OF THE BUSINESS OF PROVIDI NG CREDIT FACILITIES TO ITS MEMBERS ONLY. THE SOCIETY IS NOT CARRYING ON ANY SEPARATE BUSINESS FOR EARNING SUCH INTEREST INCOME. THE INCO ME SO DERIVED IS THE AMOUNT OF PROFITS AND GAINS OF BUSINESS ATTRIBU TABLE TO THE ACTIVITY OF CARRYING ON THE BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS BY A COOPERATIVE 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 COOPERATIVE SALE SOCIET Y LTD., ON WHICH RELIANCE IS PLACED, THE SUPREME COURT WAS DEALING W ITH A CASE WHERE THE ASSESSEE COOPERATIVE SOCIETY, APART FROM PROVIDING CREDIT FACILITIES TO THE MEMBERS, WAS ALSO IN THE B USINESS OF MARKETING OF AGRICULTURAL PRODUCE GROWN BY ITS MEMB ERS. THE SALE CONSIDERATION RECEIVED FROM MARKETING AGRICULTURAL PRODUCE OF ITS MEMBERS WAS RETAINED IN MANY CASES. THE SAID RETAIN ED AMOUNT WHICH WAS PAYABLE TO ITS MEMBERS FROM WHOM PRODUCE WAS BOUGHT, WAS INVESTED IN A SHORT TERM DEPOSIT/SECURI TY. SUCH AN AMOUNT WHICH WAS RETAINED BY THE ASSESSEE SOCIETY W AS A LIABILITY AND IT WAS SHOWN IN THE BALANCE SHEET ON THE LIABIL ITY SIDE. THEREFORE, TO THAT EXTENT, SUCH INTEREST INCOME CAN NOT BE SAID TO BE ATTRIBUTABLE EITHER TO THE ACTIVITY MENTIONED IN SE CTION 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 ASS ESSING OFFICER WAS RIGHT IN TAXING THE INTEREST INCOME INDICATED A BOVE UNDER SECTION 56 OF THE ACT. FURTHER THEY MADE IT CLEAR T HAT THEY ARE CONFINING THE SAID JUDGMENT TO THE FACTS OF THAT CA SE. THEREFORE IT IS CLEAR, SUPREME COURT WAS NOT LAYING DOWN ANY LAW. 10. IN THE INSTANT CASE, THE AMOUNT WHICH WAS INVES TED 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 THE IR ACCOUNT. IN FACT THIS AMOUNT WHICH IS IN THE NATURE OF PROFITS AND G AINS, WAS NOT IMMEDIATELY REQUIRED BY THE ASSESSEE FOR LENDING MON EY TO THE MEMBER'S, AS THERE WERE NO TAKERS. THEREFORE THEY H AD DEPOSITED THE MONEY IN A BANK SO AS TO EARN INTEREST. THE SAI D INTEREST INCOME IS ATTRIBUTABLE TO CARRYING ON THE BUSINESS OF BANKING AND THEREFORE IT IS LIABLE TO BE DEDUCTED IN TERMS OF S ECTION 80P(1) OF THE ACT. IN FACT SIMILAR VIEW IS TAKEN BY THE ANDHRA PRA DESH HIGH COURT IN THE CASE OF CIT V. ANDHRA PRADESH STATE CO OPERATIVE BANK LTD., [2011] 200 TAXMAN 220/12 TAXMANN.COM 66. IN T HAT VIEW OF THE MATTER, THE ORDER PASSED BY THE APPELLATE AUTHO RITIES DENYING THE BENEFIT OF DEDUCTION OF THE AFORESAID AMOUNT IS UNSUSTAINABLE IN LAW. ACCORDINGLY IT IS HEREBY SET ASIDE. THE SUB STANTIAL QUESTION OF LAW IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AG AINST THE REVENUE. HENCE, WE PASS THE FOLLOWING ORDER: 11. NO DOUBT, A CONTRARY DECISION TO THIS EFFECT WA S ALSO CITED BY THE LD. DEPARTMENTAL REPRESENTATIVE WHERE THE HONBLE DELHI HIGH COURT IN THE CASE OF MANTOLA COOPERATIVE THRIFT & CREDIT SOCIETY LTD. (SUPRA) HAS HELD THAT WHERE THE ASSESSEE COOPERATIVE SOCIETY WAS ENG AGED IN PROVIDING CREDIT FACILITIES TO ITS MEMBERS EARNS INTEREST INC OME ON SURPLUS FUNDS DEPOSITED AS FIXED DEPOSITS, SUCH INTEREST INCOME W OULD BE ASSESSABLE AS 7 INCOME FROM OTHER SOURCES AND THUS NOT ELIGIBLE F OR DEDUCTION U/S.80P(2)(A)(I). HOWEVER, IT IS ALSO THE SETTLED P ROPOSITION OF LAW THAT WHEN TWO VIEWS ARE POSSIBLE, THE VIEW WHICH IS IN F AVOUR OF THE ASSESSEE HAS TO BE FOLLOWED. SINCE IN THE INSTANT CASE, TWO DIVERGENT DECISIONS WERE CITED BEFORE US AND NO DECISION OF THE HONBLE JURI SDICTIONAL HIGH COURT IS AVAILABLE, THEREFORE, FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. VEGETABLE PRODUCTS REPORTED IN 88 ITR 192 WE HOLD THAT THE VIEW IN FAVOUR OF THE ASSESSEE, I.E. THE D ECISION OF THE HONBLE KARNATAKA HIGH COURT HAS TO BE FOLLOWED. ACCORDINGL Y, WE HOLD THAT THE INTEREST INCOME EARNED BY THE ASSESSEE ON SHORT TER M DEPOSITS KEPT WITH BANKS HAS TO BE ALLOWED AS DEDUCTION U/S.80P(2)(A)( I) OF THE I.T. ACT. THE ORDER OF THE CIT(A) IS ACCORDINGLY SET ASIDE AND TH E GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 11. IN VIEW OF THE ISSUE BEING DECIDED BY THE PUNE BENCH OF TRIBUNAL IN ASSESSEE S OWN CASE IN DIFFERENT YEARS, WE FIND NO MERIT IN THE GROUNDS OF APPEAL RAISED BY THE REVENUE AND THE SAME ARE DISMI SSED. BEFORE US, REVENUE HAS NOT POINTED OUT ANY CONTRARY BIN DING DECISION NOR HAS PLACED ON RECORD ANY MATERIAL TO DEMONSTRATE T HAT THE AFORESAID DECISIONS HAVE BEEN SET ASIDE/STAYED/OVER-RULED BY ANY HIGHER JUDICIAL FORUM. IN VIEW OF THE AFORESAID FACTS, WE, FOLLOWING THE AFOR ESAID DECISION OF PUNE TRIBUNAL, HOLD THAT INTEREST INCOME OF RS.1 9,83,126/- EARNED BY THE ASSESSEE ON THE DEPOSITS HELD WITH NATION ALIZED BANKS WOULD BE ELIGIBLE FOR DEDUCTION U/S 80P(2)(A)(I) OF THE ACT. WE THEREFORE DIRECT SO. THUS, THE GROUND OF THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED ON 1 ST DAY OF MARCH, 2019. SD/- SD/- ( VIKAS AWASTHY ) ( ANIL CHATURVEDI ) / JUDICIAL MEMBER ' / ACCOUNTANT MEMBER PUNE; DATED : 1 ST MARCH, 2019. YAMINI 8 #$%&'(' % / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. 4 5. 6. CIT(A) 7, PUNE. PR.CIT-6, PUNE. '#$ %%&',) &', *+ / DR, ITAT, SMC PUNE; $-.// GUARD FILE. / BY ORDER // TRUE COPY // 012%3&4 / SR. PRIVATE SECRETARY ) &', / ITAT, PUNE.
