Income-tax Officer, V. Swa Ashokrao Bankar Nagari Sah. Pat. Maryadit, Nashik

ITA 1395/PUN/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9451 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 24-01-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 26-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA
• Section: 143(3); 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 1395 /P U N/201 5 / ASSESSMENT YEAR : 20 12 - 13 THE INCOME TAX OFFICER, WARD 1(1), NASHIK . / APPELLANT VS. SWA ASHOKRAO BANKAR NAGARI SAH. PATSANSTHA MARYADIT, SANSKRUTI, OPP. POLICE STATION, PIMPALGAON (B), T AL NIPHAD, DIST. NASHIK 422209 . / RESPONDENT PAN: AAAAA2084K ASSESSEE BY : SHRI PRAMOD SHINGTE REVENUE BY : SHRI MUKESH JHA / DATE OF HEARING : 24 . 0 1 . 201 8 / DATE OF PRONOUNCEMENT: 25 . 0 1 . 201 8 / ORDER PER SUSHMA CHOWLA, J M : TH E APPEAL FILED BY THE REVENUE IS AGAINST THE ORDER OF CIT (A) - I , NASHIK , DATED 2 1 . 08 .201 5 RELATING TO ASSESSMENT YEAR 20 12 - 13 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME - TAX ACT , 1961 (IN SHORT T HE ACT) . 2 . THE REVENUE HAS RAISED THE FOLLOWING GROUND S OF APPEAL : - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LEARNED CIT(A) - I, NASHIK WAS NOT JUSTIFIED IN HOLDING THAT ASSESSEE IS ENTITLED TO DEDUCTION U/S 80P(2)(A)(I) OF TH E IT ACT, WHEN THE INCOME OF THE SOCIETY ON ACCOUNT OF INTEREST FROM BANKS OTHER THAN CO - OPERATIVE BANKS ARE NOT COVERED BY THE ACTIVITY OF PROVIDING CREDIT FACILITIES TO ITS ITA NO. 1395 /P U N/20 1 5 SWA ASHOKRAO BANKAR NAGARI SAH. PAT. MARYADIT 2 MEMBERS AND HENCE, NOT ELIGIBLE FOR DEDUCTION U/S 80P(2)(A)(I) OF THE IT ACT. 2. THE LD. CIT(A) - I, NASHIK HAS ALSO DISREGARDED THE FACT THAT THE CO - OPERATIVE SOCIETY IS REQUIRED TO SATISFY THE CRITERIA FOR AVAILING BENEFIT OF SEC. 80P(2)(D) I.E. THE INTEREST INCOME SHOULD BE FROM OTHER CO - OPERATIVE SOCIETY, WHEREAS IN THE ASSESSEE SOC IETY'S CASE THE INTEREST INCOME IS FROM OTHER THAN CO - OPERATIVE BANKS WITH REGARD TO INVESTMENT MADE. 3. THE APPELLANT PRAYS THE ORDER OF THE ASSESSING OFFICER MAY BE RESTORED. 4. THE APPELLANT PRAYS TO ADDUCE SUCH FURTHER EVIDENCE TO SUBSTANTIATE HIS CA SE. 3. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AT THE OUTSET POINTED OUT THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS SQUARELY COVERED BY THE ORDERS OF TRIBUNAL IN THE CASE OF ASSESSEE ITSELF FOR DIFFERENT YEARS STARTING FROM ASSESSMENT Y EAR 2009 - 10. 4. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST CLAIM OF DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT AT 53,03,446/ - IN RESPECT OF INTEREST EARNED ON FIXED DEPOSITS WITH NATIONALI Z ED BANKS. 5. BRIEFLY IN THE FACTS OF THE CASE , THE ASSESSEE SOCIETY WAS A REGISTERED COOPERATIVE SOCIETY CARRYING ON BANKING BUSINESS AND WAS REGISTERED UNDER THE MAHARASHTRA ST ATE COOPERATIVE ACT. IT PROVIDES FACILITIES TO ITS MEMBERS, ADVANCED LOAN TO THE MEMBERS, CHARGED INTEREST ON THE SAME. IT ALSO ACCEPTED DEPOSITS FROM MEMBERS AND GAVE INTEREST ON IT. THE ASSESSEE ALSO RECEIVED INTEREST ON FIXED DEPOSITS AS WELL AS FIXE D DEPOSITS KEPT WITH BANKS. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD RECEIVED INTEREST TO THE EXTENT OF 56,84,196/ - FROM THE NATIONALI Z ED BANKS. THE ASSESSING OFFICER WAS OF THE VIEW THAT SINCE THE INTEREST INCOME DO NOT CONSTITUTE THE OPERATIONAL INCOME OF THE ASSESSEE SOCIETY, THEREFORE, IT WAS NOT ENTITLED TO DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT. THE ASSESSING OFFICER ALLOWED EXPENDITURE TO THE EXTENT ITA NO. 1395 /P U N/20 1 5 SWA ASHOKRAO BANKAR NAGARI SAH. PAT. MARYADIT 3 OF 3,80,750 / - AGAINST THE SAID INCOME AND THE NET INCOME OF 53, 03 , 446 / - WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE UNDER SECTION 56 OF THE INCOME TAX ACT. 6. THE CIT(A) RELYING ON THE RATIO LAID DOWN BY THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. NIPHAD NAGARI SAHAKARI PATSANSTHA LTD. IN ITA NO.1336/PUN/2011 RELATING TO ASSESSMENT YEAR 2008 - 09 DATED 31 . 07 . 2013 ALLOWED THE CLAIM OF THE ASSESSEE. 7. THE REVENUE IS IN APPEAL A GAINST THE ORDER OF CIT(A). 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE PLACED RELIANCE ON THE RATIO LAID DOWN BY THE HONBLE HIGH COURT OF DELHI IN MANTOLA CO - OPERATIVE THRIFT & CREDIT SOCIETY LTD. (2014) 50 TAXMANN.COM 278 (DEL). 9. ON T HE PERUSAL OF RECORD, WE FIND THAT THE ISSUE 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 BANK OF INDIA, HDFC BANK, STATE BANK OF INDIA , ICICI BANK AND BA NK OF BARODA . THE SAID ISSUE IS SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL IN ITO VS. NIPHAD NAGARI SAHAKARI PATSANSTHA LTD. (SUPRA) WHEREIN THE TRIBUNAL HAD HELD THAT THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION UNDER 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. ITA NO. 1395 /P U N/20 1 5 SWA ASHOKRAO BANKAR NAGARI SAH. PAT. MARYADIT 4 10 . WE FURTHER FIND THAT THE ISSUE OF ALLOWABILITY OF D EDUCTION 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 IN ITA NO.1584/PN/2012, RELATING TO ASSESSMENT YEAR 2009 - 10, VIDE ORDER DATED 30.04.2014; THEREAFTER IN ITA NO.139 4/PN/2015, RELATING TO ASSESSMENT YEAR 2011 - 12, VIDE ORDER DATED 22.07.2016 AND ALSO IN ITA NO.2006/PUN/2014, RELATING TO ASSESSMENT YEAR 2010 - 11, VIDE ORDER DATED 04.05.2017. THE TRIBUNAL IN ASSESSMENT YEAR 2011 - 12 HAD MADE REFERENCE TO THE RATIO LAID DO WN IN THE CASE OF SHRI LAXMI NARAYAN NAGARI SAHAKARI PAT SANSTHA MARYADIT IN ITA NO.604/PN/2014, RELATING TO ASSESSMENT YEAR 2010 - 11, ORDER DATED 19.08.2015, WHEREIN RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE HONBLE HIGH COURT OF KARNATAKA IN TUMKU R MERCHANTS SOUHARDS CREDIT COOPERATIVE LTD. VS. ITO REPORTED IN 55 TAXMANN.COM 447, WHEREIN IT WAS HELD THAT INTEREST EARNED FROM SHORT TERM DEPOSITS WITH THE BANK WAS ENTITLED TO DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT . THE HONBLE HIGH COURT OF KARNATAKA AFTER CONSIDERING THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF TOTGARS COOPERATIVE SALE SOCIETY LTD. VS. ITO (2010) 322 ITR 283 (SC) HELD THAT THE INTEREST EARNED BY SUCH COOPERATIVE SOCIETIES ON SHORT TERM DEPOSITS WITH SCHEDULED B ANKS IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT . THE TRIBUNAL ALSO CONSIDERED THE CONTRARY DECISION OF THE HONBLE HIGH COURT OF DELHI IN MANTOLA CO - OPERATIVE THRIFT & CREDIT SOCIETY LTD. VS. CIT AND HELD AS UNDER: - 9. WE HAVE CONSID ERED 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. THE ONLY DISPUTE TO BE DECIDED IN THE GROUNDS RAISED BY THE ASSESSEE IS THAT WHETHER THE INTEREST AMOUNTING TO RS.25,01,774/ - EARNED BY THE ASSESSEE ON SHORT TERM DEPOSITS WITH BANKS HAS TO BE 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 FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF THE TOTGARS COOPERATIVE SALE SOCIETY LTD. (SUPRA) TREATED THE INTEREST EARNED FROM SUCH SHORT TERM DEPOSITS AS INCOME FROM OTHER SOURCES AND BROUGHT THE SAME TO TAX WHICH HAS BEEN UPHELD BY THE CIT(A). ITA NO. 1395 /P U N/20 1 5 SWA ASHOKRAO BANKAR NAGARI SAH. PAT. MARYADIT 5 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 INTEREST EARNED FROM SUCH SHORT TERM DEPOSIT S WITH BANK IS ENTITLED TO DEDUCTION U/S.80P(2)(A)(I). WE FIND THE HONBLE HIGH COURT OF KARNATAKA AFTER CONSIDERING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF TOTGARS COOPERATIVE SALE SOCIETY LTD. (SUPRA) HELD THAT THE INTEREST EARNED BY SUCH C OOPERATIVE 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 UND ISPUTED 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 OTH ER 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 ATTRIBUTABLE TO THE BUSINESS OF PROVIDING CR EDIT FACILITIES TO ITS MEMBERS, IS THE QUESTION. IN THIS REGARD, IT IS NECESSARY TO NOTICE THE RELEVANT PROVISION OF LAW I.E., SECTION 80P(2)(A)(I): 'DEDUCTION IN RESPECT OF INCOME OF CO OPERATIVE SOCIETIES: 80P (1) WHERE, IN THE CASE OF AN ASSESSEE BE ING A CO OPERATIVE SOCIETY, THE GROSS TOTAL INCOME INCLUDES ANY INCOME REFERRED TO IN SUB 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 CO OPERATIVE 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 M EANING 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] 113 ITR 84 (SC) AS UNDER: ' AS REGARDS THE ASPECT EMERGING FROM THE EXP RESSION '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 THA T 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 ITA NO. 1395 /P U N/20 1 5 SWA ASHOKRAO BANKAR NAGARI SAH. PAT. MARYADIT 6 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 DISTRIBU TION 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 SECTI ON - 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. T HEREFORE, 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 WIDE R 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 MEM BERS, EARNS PROFITS AND GAINS OF BUSINESS BY PROVIDING CREDIT FACILITIES TO ITS MEMBERS. THE INTEREST INCOME SO DERIVED OR THE CAPITAL, IF NOT IMMEDIATELY REQUIRED TO BE LENT TO THE MEMBERS, THEY CANNOT KEEP THE SAID AMOUNT IDLE. IF THEY DEPOSIT THIS AMOUN T IN BANK SO AS TO EARN INTEREST, THE SAID INTEREST INCOME IS ATTRIBUTABLE TO THE PROFITS AND GAINS OF THE BUSINESS OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS ONLY. THE SOCIETY IS NOT CARRYING ON ANY SEPARATE BUSINESS FOR EARNING SUCH INTEREST INCOME. T HE INCOME SO DERIVED 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 TOTA L 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 RETAINED IN MANY CASES. THE SAID RETAINED AMOUNT WHICH WAS PAYABLE TO ITS MEMBERS FROM WHOM PRODUCE WAS BOUGHT, WAS INVESTED IN A SHORT TERM DEPOSIT/SECURITY. SUCH AN AMOUNT WHICH WAS RETAINED BY THE ASSESSEE - SOCIETY WAS A LIABILITY AND IT WAS SHOWN IN THE BALANCE SHEET ON THE LIABILITY SIDE. THEREFORE, TO THAT EXTENT, SUCH INTEREST INCOME 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 SAI D 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, SU PREME 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 NOT IMMEDIATELY REQUIRED BY THE ASSESSEE FOR LENDING MONEY TO THE MEMBER'S, AS THERE WERE NO TAKERS. THEREFORE THEY HAD DEPOSITED THE MONEY IN A BANK SO AS TO EARN ITA NO. 1395 /P U N/20 1 5 SWA ASHOKRAO BANKAR NAGARI SAH. PAT. MARYADIT 7 INTEREST. THE SAID INTEREST INCOME IS ATTRI BUTABLE 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 QUEST ION OF LAW IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. HENCE, WE PASS THE FOLLOWING ORDER: 11. NO DOUBT, A CONTRARY DECISION TO THIS EFFECT WAS 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 ENGAGED IN PROVIDING CREDIT FACILITIES TO ITS MEMBERS EARNS INTEREST INCOME ON SURPLUS FUNDS DEPOSITED AS FIXED DEPOSITS, SUCH INTERE ST INCOME WOULD BE ASSESSABLE AS INCOME FROM OTHER SOURCE S AND THUS NOT ELIGIBLE FOR DEDUCTION U/S.80P(2)(A)(I). HOWEVER, IT IS ALSO THE SETTLED PROPOSITION OF LAW THAT WHEN TWO VIEWS ARE POSSIBLE, THE VIEW WHICH IS IN FAVOUR 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 JURISDICTIONAL 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 DECISION OF THE HONBLE KARNATAKA HIGH COURT HAS TO BE FOLLOWED. ACCORDINGLY, WE HOLD THAT THE INTEREST INCOME EARNED BY THE ASSESSEE ON SHORT TERM 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 THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 11 . IN VIEW OF THE ISSUE BEING DECIDED BY THE PUNE BENCH OF TRIBUNAL IN ASSESSEES OWN CASE IN DIFFERENT YEARS, WE FIND NO MERIT IN THE GROUNDS OF APPEAL RAISED BY THE REVENUE AND THE SAME ARE DISMISSED. 12 . IN THE RESULT, APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON THIS 25 TH DAY OF JANUARY , 201 8 . SD/ - SD/ - (ANIL CHATURVEDI ) (SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 25 TH JANUARY , 201 8 . GCVSR ITA NO. 1395 /P U N/20 1 5 SWA ASHOKRAO BANKAR NAGARI SAH. PAT. MARYADIT 8 / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APP ELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - I , NASHIK ; 4. THE PR. CIT - I , NASHIK ; 5. , , / DR B , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE