Dhanashree Mahila Gramin Bigarsheti Sah. Patsanstha Maryadit, Solapur V. Income-tax Officer,

ITA 1568/PUN/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1066 (ITAT-PUNE)
• Duration Of Justice: 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 19-07-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income
• Section: 43B; 10B; 56; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE . . , BEFORE SHRI R.K. PANDA, AM . / ITA NOS.1567 & 1568/PN/2016 / ASSESSMENT YEARS : 2010-11 & 2012-13 DHANASHREE MAHILA GRAMIN BIGARSHETI SAHAKARI PATSANTHA MARYADIT, SANT DAMAJI ROAD, TAL : MANGALWEDA, SOLAPUR 413 305 PAN : AAAJD0435E . / APPELLANT V/S ITO, WARD - (3 ), PAN DHARPUR . / RESPONDENT / APPELLANT BY : SHRI PRAMOD SHINGTE / RESPONDENT BY : SHRI SUHAS KULKARNI, JCIT / ORDER PER R.K.PANDA, AM : THE ABOVE TWO APPEALS FILED BY THE ASSESSEE ARE DIRECTE D AGAINST THE SEPARATE ORDERS DATED 25-02-2016 AND 29-03-2016 OF THE CIT(A)- 7, PUNE RELATING TO THE ASSESSMENT YEARS 2010-11 AND 2 012-13 RESPECTIVELY. FOR THE SAKE OF CONVENIENCE, BOTH THESE A PPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER. ITA NO.1567/PN/2016 (A.Y. 2010-11) : 2. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET DID N OT PRESS GROUNDS OF APPEAL NO.2, 3 AND 4 FOR WHICH THE LD. DEPARTME NTAL REPRESENTATIVE HAS NO OBJECTION. ACCORDINGLY, THE ABOVE 3 GROUNDS ARE DISMISSED AS NOT PRESSED. THEREFORE, THE ONLY GR OUND THAT SURVIVES IS GROUND OF APPEAL NO.1 WHICH READS AS UNDER : / DATE OF HEARING :25.08.2016 / DATE OF PRONOUNCEMENT:26.08.2016 2 ITA NO.1567 & 1568/PN/2016 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND I N LAW, THE LOWER AUTHORITIES HAVE ERRED IN DISALLOWING THE DEDUC TION U/S.80P(2)(A)(I) OF INCOME TAX ACT, 1961 ON INTEREST RECEIVED FROM BANKS OTHER THAN COOPERATIVE BANKS BY DISREGARDING APP ELLANTS SUBMISSION THAT THE INVESTMENT IN THESE BANKS IN THE FORM OF DEPOSITS WAS MADE IN THE ORDINARY COURSE OF BUSINESS THEREFORE IN TEREST EARNED IS PART OF BUSINESS INCOME AND YOUR APPELLANT IS ELIGIBLE FOR THE DEDUCTION. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A COOPERATIVE CREDIT SOCIETY REGISTERED UNDER THE MAHARAS HTRA COOPERATIVE SOCIETIES ACT, 1960. IT FILED ITS RETURN OF INCO ME ON01- 09-2010 DECLARING TOTAL INCOME AT NIL AFTER CLAIMING DEDUCTION U/S.80P OF THE I.T. ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AO OBSERVED THAT ASSESSEE SOCIETY HAS MAINLY EARN ED INTEREST FROM LOANS AND ADVANCES GIVEN TO MEMBERS AND FROM OTHER COOPERATIVE SOCIETIES. HOWEVER, THE ASSESSEE COOPERATIVE CREDIT SOCIETY HAS ALSO DEPOSITED ITS SURPLUS FUNDS WITH BANKS OT HER THAN COOPERATIVE SOCIETIES/COOPERATIVE BANKS ON WHICH ASSESSE E HAS RECEIVED INTEREST INCOME OF RS.8,07,379/- (BANK OF INDIA, MANGALWEDA BRANCH). THE AO NOTED THAT THE ASSESSEE HAS CLAIMED DE DUCTION U/S.80P(2)(A)(I) ON THE ABOVE INTEREST INCOME ALSO. HE, THEREFO RE, ASKED THE ASSESSEE TO EXPLAIN AS TO HOW IT IS ENTITLED TO CLAIM DEDUCTION U/S.80P(2)(A)(I) OF THE ACT ON THE ABOVE INTEREST INC OME OF RS.8,07,379/- SINCE THE SAID INTEREST INCOME IS TO BE TAXED U/S.56 OF THE I.T. ACT AS INCOME FROM OTHER SOURCES. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND FOLLOWING THE DECISIO N OF HONBLE SUPREME COURT IN THE CASE OF TOTGARS COOPERAT IVE SALE SOCIETY VS. ITO REPORTED IN 322 ITR 283 THE AO HELD THA T SUCH INTEREST INCOME HAS TO BE TREATED AS INCOME FROM OTHER SOURCES U/S.56 OF THE I.T. ACT AND THE ASSESSEE IS NOT ENTITLED T O DEDUCTION U/S.80P(2)(A)(I) ON THE AMOUNT OF RS.8,07,379/-. 3 ITA NO.1567 & 1568/PN/2016 4. IN APPEAL THE LD.CIT(A) UPHELD THE ACTION OF THE AO. AG GRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BE FORE THE TRIBUNAL. 5. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET FILED THE FOLLOWING TWO DECISIONS AND SUBMITTED THAT UNDER IDENTICAL FACTS AND CIRCUMSTANCES THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE : 1. ITO, WARD-1(1), NASHIK VS. SWA ASHOKRAO BANKAR NAG ARI SAHAKARI PATSANSTHA MARYADIT VIDE ITA NO.1394/PN/2015 ORDER DA TED 22-07- 2016. 2. SHRI LAXMI NARAYAN NAGARI SAHAKARI PAT SANSTHA MA RYADIT VS. ITO, WARD-1(3), KOLHAPUR ORDER DATED 19-08-2015 HE ACCORDINGLY SUBMITTED THAT THIS BEING A COVERED MATT ER IN FAVOUR OF THE ASSESSEE THE GROUNDS RAISED BY THE ASSESSEE SHOULD BE ALLOWED . 6. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAN D HEAVILY RELIED ON THE ORDER OF THE CIT(A). 7. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH T HE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. I HAVE ALSO CONSIDERED THE VARIOU S DECISIONS CITED BEFORE ME. THE ONLY DISPUTE IN THE IMPUGNED APPEAL IS REGARDING ALLOWABILITY OF DEDUCTION U/S.80P(2)(A)(I) ON THE INTEREST INCOME OF RS.8,07,379/- BEING INTEREST ON SURPLUS FUNDS KEPT AS FIXED DEPOSITS WITH BANK OF INDIA, MANGALWEDA BRANCH. ACCORDING TO THE REVENUE, SUCH INTEREST INCOME HAS TO BE TREATED AS INCOME FROM OTHER SOURCES AND THEREBY ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S.80 P(2)(A)(I). ACCORDING TO THE ASSESSEE SUCH INTEREST INCOME HAS TO BE TREATED AS 4 ITA NO.1567 & 1568/PN/2016 BUSINESS INCOME OF THE SOCIETY AND ASSESSEE IS ENTITLED TO DEDUCTION U/S.80P(2)(A)(I) OF THE I.T ACT. 8. I FIND IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN THE CASE OF CHANDRAPRABHU GRAMIN BIGAR SHETI SAHKARI PATSANT HA MARYADIT VS. ITO, PANDHARPUR VIDE ITA NO.1352/PN/2016 ORDER DATE D 29-07-2016 FOR A.Y. 2010-11. IN THE SAID CASE, I HAVE D ECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY HOLDING THAT THE ASSES SEE IS ENTITLED TO DEDUCTION U/S.80P(2)(A)(I) ON THE INTEREST INCOME KEPT WITH VARIOUS BANKS OTHER THAN COOPERATIVE BANKS/SOCIETIES BY OBSERVING AS UN DER : 8. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. I HAVE ALSO CONSIDERED THE VARIO US DECISIONS CITED BEFORE ME. I FIND THE ASSESSEE IN THE INSTANT CASE IS A COOPERATIVE SOCIETY AND HAS EARNED INTEREST INCOME OF RS.15,36,248/- FROM ITS INVESTMENT WITH DIFFERENT BANKS WHICH IT CLAIMED AS DEDUCTION U/ S.80P(2)(A)(I) OF THE I.T. ACT, 1961. THE AO, FOLLOWING THE DECISION OF H ONBLE SUPREME COURT IN THE CASE OF TOTGARS COOPERATIVE SALE SOCIETY LTD. (S UPRA), DISALLOWED THE ABOVE AMOUNT BY REJECTING THE CLAIM OF DEDUCTION U/ S.80P(2)(A)(I). I FIND THE LD.CIT(A) DISTINGUISHING THE VARIOUS DECISIONS CITED BEFORE HIM DISMISSED THE APPEAL FILED BY THE ASSESSEE. 9. IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT IN VIEW OF THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL AS WELL AS VARIOUS OTHER DECISIONS THE ISSUE STANDS COVERED IN FAVOUR OF THE ASSESSEE. I FIND MERIT IN THE ARGUMENT OF THE LD. COUNSEL FOR THE ASSESSEE. I FIND THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SWA ASHOKRAO BANKAR NA GARI SAHAKARI PATSANSTHA MARYADIT VIDE ITA NO.1394/PN/2015 ORDER DA TED 22-07-2016 FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF NIPHAD NAGARI SAHAKARI PATSANSTHA LTD. (SUPRA) AND THE DECISION OF T HE HONBLE KARNATAKA HIGH COURT IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. (SUPRA) HAS HELD THAT ASSESSEE IS ENTITL ED TO DEDUCTION U/S.80P(2)(A)(I) ON THE INTEREST INCOME ON DEPOSITS WIT H BANKS OTHER THAN COOPERATIVE BANKS/COOPERATIVE SOCIETIES. THE REL EVANT OBSERVATION OF THE TRIBUNAL FROM PARA 9 ONWARDS READ AS UNDER : 9. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. I HAVE ALSO CONSIDERED THE VARIO US DECISIONS CITED BEFORE ME. I FIND THE ASSESSEE IN THE INSTANT CASE IS A COOPERATIVE SOCIETY AND HAS RECEIVED INTEREST OF RS.48,16,346/- FROM ITS IN VESTMENTS WITH DIFFERENT BANKS. THE ASSESSEE CLAIMED DEDUCTION U/S.80P( 2)(A)(I) OF ITS INCOME ON ACCOUNT OF INTEREST FROM BANKS OTHER THAN COOPERATIVE SOCIETIES. THE AO FOLLOWING THE DECISION OF HONBLE S UPREME COURT IN THE CASE OF TOTGARS COOPERATIVE SALE SOCIETY LTD. DISALLO WED AN AMOUNT OF RS.44,52,781/- AFTER ALLOWING DEDUCTION OF RS.3,63,56 5/- AS PROPORTIONATE 5 ITA NO.1567 & 1568/PN/2016 EXPENSES FOR EARNING SUCH INTEREST INCOME. I FIND THE LD.CIT(A) FOLLOWING THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN TH E CASE OF NIPHAD NAGARI PATSANSTHA LTD. (SUPRA) HELD THAT THE SAID INT EREST IS ITS BUSINESS INCOME ELIGIBLE FOR DEDUCTION U/S.80P(2)(A)(I) OF TH E I.T. ACT. I FIND THE TRIBUNAL IN ASSESSEES OWN CASE IN THE IMMEDIATELY PRECE DING ASSESSMENT YEAR HAS ALSO DECIDED IDENTICAL ISSUE AND THE APPEAL FI LED BY THE REVENUE HAS BEEN DISMISSED. THE RELEVANT OBSERVATION OF THE TRI BUNAL FROM PARA 6 ONWARDS READ AS UNDER : 6. AT THE TIME OF HEARING, IT WAS A COMMON POINT BE TWEEN THE PARTIES THAT AN IDENTICAL CONTROVERSY HAS BEEN CONSIDERED BY THE PU NE BENCH OF THE TRIBUNAL IN THE CASE OF ANOTHER CO-OPERATIVE SOCIETY, NAMELY, ITO VS. NIPHAD NAGARI SAHAKARI PATSANSTHA LTD. VIDE ITA NO.13 36/PN/2011 DATED 31.07.2013 WHEREIN THE ISSUE HAS BEEN HELD IN FA VOUR OF THE ASSESSEE AFTER CONSIDERING SIMILAR OBJECTION, WHICH HAS B EEN RAISED BY THE ASSESSING OFFICER IN THE PRESENT CASE. THE LEARNED REPRESE NTATIVE FOR THE ASSESSEE HAS FURNISHED A COPY OF THE SAID ORDER OF THE TRI BUNAL DATED 31.07.2013 (SUPRA) AND HAS ALSO POINTED OUT THAT THE T RIBUNAL HAS DULY CONSIDERED THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF TOTGARS CO-OPERATIVE SALE SOCIETY LTD. (SUPRA), WHIC H HAS BEEN RELIED UPON BY THE ASSESSING OFFICER IN THE PRESENT CASE. THE LE ARNED DEPARTMENTAL REPRESENTATIVE HAS NEITHER CONTROVERTED THE ABOVE MATRIX AND NOR REFERRED TO ANY CONTRARY DECISION AND THEREF ORE FOR THE SAKE OF MAINTAINING CONSISTENCY WE FOLLOW THE DECISION OF OUR CO-ORDINATE BENCH IN THE CASE OF NIPHAD NAGARI SAHAKARI PATSANSTHA LTD. (SUPRA) AND UPHOLD THE PLEAOF THE ASSESSEE. HOWEVER, BEFORE PARTING, WE MA Y REPRODUCE HEREINAFTER THE FOLLOWING PORTION OF THE ORDER OF T HE TRIBUNAL DATED 31.07.2013 (SUPRA) WHICH BRINGS OUT THE REASONING PREV AILING WITH THE TRIBUNAL TO UPHOLD THE PLEA OF THE ASSESSEE :- 11. 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. IN THE INSTA NT CASE THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE IS A COOPERAT IVE SOCIETY ENGAGED IN THE BUSINESS ACTIVITY OF CREDIT COOPERATIVE SOCI ETY, I.E. PROVIDING CREDIT FACILITY TO ITS MEMBERS. ACCORDING TO THE RE VENUE THE INCOME OF THE SOCIETY ON ACCOUNT OF INTEREST FROM BANKS OTHER THAN COOPERATIVE BANKS, INTEREST ON MUTUAL FUNDS, LONG TERM AND SHOR T TERM CAPITAL GAIN ON SALE OF MUTUAL FUNDS ETC. ARE NOT COVERED BY THE ACTIVITY OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS AND HENC E NOT ELIGIBLE FOR DEDUCTION U/S.80P(2)(A)(I) OF THE INCOME TAX ACT IN VIEW OF THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF TO TAGARS COOPERATIVE SALE SOCIETY LTD. (SUPRA). WE FIND THE LD. CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE AS SESSEE IS ENTITLED TO DEDUCTION U/S.80P(2)(A)(I) ON ACCOUNT OF INTERES T FROM BANKS OTHER THAN COOPERATIVE BANKS, INTEREST ON MUTUAL FUNDS LO NG TERM AND SHORT TERM CAPITAL GAIN ON MUTUAL FUNDS ETC. WHILE DOING SO, HE HELD THAT THE DECISION IN THE CASE OF TOTAGARS COOPERATIVE SALE SOCIETY LTD. (SUPRA) IS NOT APPLICABLE TO THE FACTS OF THE PRESE NT CASE SINCE IN THAT CASE THE AMOUNT INVESTED IN SHORT TERM DEPOSITS AND SECURITIES WAS NOT OUT OF INTEREST BEARING DEPOSITS COLLECTED FROM MEMBERS BUT OUT OF SALE PROCEEDS OF AGRICULTURAL PRODUCE OF FARMER MEM BERS MARKETED BY THE SOCIETY. FURTHER, THE HONBLE APEX COURT HAS CO NSIDERED ONLY THE LATTER PART OF SECTION 80P(2)(A)(I), I.E. INCOME OF A COOPERATIVE SOCIETY ENGAGED IN PROVIDING CREDIT FACILITIES TO ITS MEMBE RS IS ELIGIBLE FOR DEDUCTION AND HAS NOT CONSIDERED THE EARLIER PART O F SECTION 80P(2)(A)(I), I.E. INCOME OF A COOPERATIVE SOCIETY ENGAGED IN CARRYING ON THE BUSINESS OF BANKING IS ELIGIBLE FOR DEDUCTIO N. 6 ITA NO.1567 & 1568/PN/2016 11.1 WE FIND THE AHMEDABAD BENCH OF THE TRIBUNAL IN THE CASE OF M/S. JAFARI MOMIN VIKAS COOPERATIVE CREDIT SOCIETY LTD. (SUPRA) AFTER CONSIDERING THE DECISION OF HONBLE SUPREME COURT I N THE CASE OF TOTAGARS COOPERATIVE SALE SOCIETY LTD. (SUPRA) HAS OBSERVED AS UNDER : 17. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS O F THE EITHER PARTY, PERUSED THE RELEVANT RECORDS AND ALSO THE CASE LAW ON WHICH THE LEARNED AR HAD RESERVATION IN ITS APPLICABLY IN THE CIRCUMSTANCES OF THE ASSESSEE'S CASE. 18. IT WAS THE STAND OF THE LEARNED CIT (A) THAT TH E ENTIRE INCOME WAS NOT EXEMPT AND THAT IT WAS TO BE EXAMINE D AS TO WHETHER THERE WAS ANY INTEREST INCOME ON THE SHORT TERM BANK DEPOSITS AND SECURITIES INCLUDED IN THE TOTAL INCOM E OF THIS SOCIETY WHICH HAS BEEN CLAIMED AS EXEMPT. ACCORDING TO THE CIT (A), A SIMILAR ISSUE TO THAT OF THE PRESENT ONE WAS DEALT WITH BY THE HON'BLE SUPREME COURT IN THE CASE OF TO TGARS CO- OP. SALE SOCIETY LTD V. ITO (SUPRA). THE ISSUE BEFO RE THE HON'BLE COURT FOR DETERMINATION WAS WHETHER INTERES T INCOME ON SHORT TERM BANK DEPOSITS AND SECURITIES WOULD BE QUALIFIED AS BUSINESS INCOME U/S 80P (2)(A)(I) OF THE ACT. 19. THE ISSUE DEALT WITH BY THE HON'BLE SUPREME COU RT IN THE CASE OF TOTGARS (SUPRA) IS EXTRACTED, FOR APPRECIAT ION OF FACTS, AS UNDER: 'WHAT IS SOUGHT TO BE TAXED UNDER SECTION 56 OF THE ACT IS THE INTEREST INCOME ARISING ON THE SURPLUS INVESTED IN SHORT TERM DEPOSITS AND SECURITIES WHICH SURPLUS WAS NOT REQUI RED FOR BUSINESS PURPOSES? THE ASSESSEE(S) MARKETS THE PROD UCE OF ITS MEMBERS WHOSE SALE PROCEEDS AT TIMES WERE RETAI NED BY IT. IN THIS CASE, WE ARE CONCERNED WITH THE TAX TREATME NT OF SUCH AMOUNT. SINCE THE FUND CREATED BY SUCH BY SUCH RETE NTION WAS NOT REQUIRED IMMEDIATELY FOR BUSINESS PURPOSES, IT WAS INVESTED IN SPECIFIED SECURITIES. THE QUESTION, BEF ORE US, IS- WHETHER INTEREST ON SUCH DEPOSITS/SECURITIES, WHICH STRICTLY SPEAKING ACCRUES TO THE MEMBERS' ACCOUNT, COULD BE TAXED AS BUSINESS INCOME UNDER SECTION 28 OF THE ACT? IN OUR VIEW, SUCH INTEREST INCOME WOULD COME IN THE CATEGORY OF 'INCOME FROM OTHER SOURCES', HENCE, SUCH INTEREST INCOME WO ULD BE TAXABLE UNDER SECTION 56 OF THE ACT, AS RIGHTLY HEL D BY THE ASSESSING OFFICER...' 19.1 HOWEVER, IN THE PRESENT CASE, ON VERIFICATION OF THE BALANCE SHEET OF THE ASSESSEE AS ON 31.3.2009, IT W AS OBSERVED THAT THE FIXED DEPOSITS MADE WERE TO MAINT AIN LIQUIDITY AND THAT THERE WAS NO SURPLUS FUNDS WITH THE ASSESSEE AS ATTRIBUTED BY THE REVENUE. HOWEVER, IN REGARD TO THE CASE BEFORE THE HON'BLE SUPREME COURT '(ON PAGE 286) 7............BEFORE THE ASSESSING OF FICER, IT WAS ARGUED BY THE ASSESSEE(S) THAT IT HAD INVESTED THE FUNDS ON SHORT TERM BASIS AS THE FUNDS WERE NOT REQUIRED IMM EDIATELY FOR BUSINESS PURPOSES AND, CONSEQUENTLY, SUCH ACT O F INVESTMENT CONSTITUTED A BUSINESS ACTIVITY BY A PRU DENT BUSINESSMAN; THEREFORE, SUCH INTEREST INCOME WAS LI ABLE TO BE TAXED UNDER SECTION 28 AND NOT UNDER SECTION 56 OF THE ACT AND, CONSEQUENTLY, THE ASSESSEE(S) WAS ENTITLED TO DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT. THE ARGUMENT WAS REJECTED BY THE ASSESSING OFFICER AS ALSO BY THE TR IBUNAL AND 7 ITA NO.1567 & 1568/PN/2016 THE HIGH COURT, HENCE, THESE CIVIL APPEALS HAVE BEE N FILED BY THE ASSESSEE(S).' 19.2 FROM THE ABOVE, IT EMERGES THAT (A) THAT ASSESSEE (ISSUE BEFORE THE SUPREME COURT) HAD ADMITTED BEFORE THE AO THAT IT HAD INVESTED SURPLUS FUNDS, WHICH WERE NOT IMMEDIATELY REQUIRED FOR THE PURPOSE OF ITS BUSINESS, IN SHORT TERM DEPOSITS; (B) THAT THE SURPLUS FUNDS AROSE OUT OF THE AMOUNT RETAINED FROM MARKETING THE AGRICULTURAL PRODUCE OF THE MEMB ERS; (C) THAT ASSESSEE CARRIED ON TWO ACTIVITIES, NAMELY , (I) ACCEPTANCE OF DEPOSIT AND LENDING BY WAY OF DEPOSIT S TO THE MEMBERS; AND (II) MARKETING THE AGRICULTURAL PRODUC E; AND (D) THAT THE SURPLUS HAD ARISEN EMPHATICALLY FROM M ARKETING OF AGRICULTURAL PRODUCES. 19.3 IN THE PRESENT CASE UNDER CONSIDERATION, THE E NTIRE FUNDS WERE UTILIZED FOR THE PURPOSES OF BUSINESS AND THER E WERE NO SURPLUS FUNDS. 19.4 WHILE COMPARING THE STATE OF AFFAIRS OF THE PR ESENT ASSESSEE WITH THAT ASSESSEE (BEFORE THE SUPREME COU RT), THE FOLLOWING CLINCHING DISSIMILARITIES EMERGE, NAMELY: (1) IN THE CASE OF THE ASSESSEE, THE ENTIRE FUNDS W ERE UTILIZED FOR THE PURPOSES OF BUSINESS AND THAT THERE WERE NO SURPLUS FUNDS; - IN THE CASE OF TOTGARS, IT HAD SURPLUS FUNDS, AS ADMITTED BEFORE THE AO, OUT OF RETAINED AMOUNTS ON MARKETING OF AGRICULTURAL PRODUCE OF ITS MEMBERS; (2) IN THE CASE OF PRESENT ASSESSEE, IT DID NOT CAR RY OUT ANY ACTIVITY EXCEPT IN PROVIDING CREDIT FACILITIES TO I TS MEMBERS AND THAT THE FUNDS WERE OF OPERATIONAL FUNDS. THE ONLY FUND AVAILABLE WITH THE ASSESSEE WAS DEPOSITS FROM ITS M EMBERS AND, THUS, THERE WAS NO SURPLUS FUNDS AS SUCH; - IN THE CASE OF TOTGARS, THE HON'BLE SUPREME COURT HAD NOT SPELT OUT ANYTHING WITH REGARD TO OPERATIONAL FUNDS ; 19.5 CONSIDERING THE ABOVE FACTS, WE FIND THAT THER E IS FORCE IN THE ARGUMENT OF THE ASSESSEE THAT THE ASSESSEE NOT A CO- OPERATIVE BANK, BUT ITS NATURE OF BUSINESS WAS COUP LED WITH BANKING WITH ITS MEMBERS, AS IT ACCEPTS DEPOSITS FR OM AND LENDS THE SAME TO ITS MEMBERS. TO MEET ANY EVENTUAL ITY, THE ASSESSEE WAS REQUIRED TO MAINTAIN SOME LIQUID FUNDS . THAT WAS WHY, IT WAS SUBMITTED BY THE ASSESSEE THAT IT H AD INVESTED IN SHORT-TERM DEPOSITS. FURTHERMORE, THE ASSESSEE H AD MAINTAINED OVERDRAFT FACILITY WITH DENA BANK AND TH E BALANCE AS AT 31.3.2009 WAS RS.13,69,955/- [SOURCE: BALANCE SHEET OF THE ASSESSEE AVAILABLE ON RECORD] 19.6 IN OVERALL CONSIDERATION OF ALL THE ASPECTS, W E ARE OF THE CONSIDERED VIEW THAT THE RATIO LAID DOWN BY THE HON 'BLE SUPREME COURT IN THE CASE OF TOTGARS CO-OP SALE SOC IETY LTD (SUPRA) CANNOT IN ANY WAY COME TO THE RESCUE OF EIT HER THE LD. CIT (A) OR THE REVENUE. IN VIEW OF THE ABOVE FACTS, WE ARE OF THE FIRM VIEW THAT THE LEARNED CIT (A) WAS NOT JUST IFIED IN 8 ITA NO.1567 & 1568/PN/2016 COMING TO A CONCLUSION THAT THE SUM OF RS.9,40,639/ - WAS TO BE TAXED U/S 56 OF THE ACT. IT IS ORDERED ACCORDING LY. 19.7 BEFORE PARTING WITH, WE WOULD, WITH DUE REGARD S, LIKE TO RECORD THAT THE RULING OF THE HON'BLE JURISDICTIONA L HIGH COURT IN THE CASE OF CIT V. MANEKBANG CO-OP HOUSING SOCIETY LTD REPORTED IN (2012) 22 TAXMANN.COM 220(GUJ) HAS BEEN KEPT IN VIEW WHILE DECIDING THE ISSUE. 11.2 WE FIND THE COCHIN BENCH OF THE TRIBUNAL IN TH E CASE OF MUTTOM SERVICE COOPERATIVE APLAPPUZHA BANK LTD. VS. ITO (S UPRA) AFTER CONSIDERING THE DECISION OF HONBLE SUPREME COURT I N THE CASE OF TOTAGARS COOPERATIVE SALE SOCIETY LTD. (SUPRA) AND VARIOUS OTHER DECISIONS HAS OBSERVED AS UNDER : 5. WE HAVE CONSIDERED THE RIVAL SUBMISSION ON EITH ER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO CAREFULLY GONE THROUGH THE ORDER OF THE LOWER AUTHORITY. NO DOUBT, THE LATEST JUDGMENT IN TOTGAR'S CO-OPERATIVE SALE SOCIETY LTD VS ITO (SUPRA), THE APEX COURT FOUND TH AT THE DEPOSIT OF SURPLUS FUNDS BY THE CO-OPERATIVE SOCIET Y IS NOT ELIGIBLE FOR DEDUCTION U/S 80P(2). IN THE CASE BEFO RE THE APEX COURT IN TOTGAR'S CO-OPERATIVE SALE SOCIETY LTD VS ITO (SUPRA), THE ASSESSEE CO-OPERATIVE SOCIETY WAS TO PROVIDE CR EDIT FACILITY TO ITS MEMBERS AND MARKET THE AGRICULTURAL PRODUCE. THE ASSESSEE IS NOT IN THE BUSINESS OF BANKING. THEREFO RE, THIS TRIBUNAL IS OF THE OPINION THAT THE JUDGMENT OF THE APEX COURT IN TOTGAR'S CO-OPERATIVE SALE SOCIETY LTD (SUPRA) IS N OT APPLICABLE IN RESPECT OF THE CO-OPERATIVE SOCIETY W HOSE BUSINESS IS BANKING. ADMITTEDLY, THE ASSESSEE HAS I NVESTED FUNDS IN STATE PROMOTED TREASURY SMALL SAVINGS FIXE D DEPOSIT SCHEME. SINCE GOVERNMENT OF INDIA HAS WITHDRAWN IND IA VIKAS PATRA, AS A SMALL SAVINGS INSTRUMENT, FUNDS INVESTE D AT THE DISCRETION OF THE BANK IS ONE OF THE ACTIVITIES OF THE BANKING AS PER THE BANKING REGULATION ACT. SINCE THE ASSESSEE CO- OPERATIVE SOCIETY IS IN THE BUSINESS OF BANKING THE INVESTMENT IN THE STATE PROMOTED TREASURY SMALL SAVINGS FIXED DEPOSIT CERTIFICATE SCHEME IS A BANKING ACTIVITY, THEREFORE , THE INTEREST ACCRUED ON SUCH INVESTMENT HAS TO BE TREATED AS BUS INESS INCOME IN THE COURSE OF ITS BANKING ACTIVITY. ONCE IT IS A BUSINESS INCOME, THE, ASSESSEE IS ENTITLED FOR DEDU CTION U/S 80P(2)((A)(I). THEREFORE, THIS TRIBUNAL IS OF THE O PINION THAT THE JUDGMENT OF THE LARGER BENCH OF THE APEX COURT IN K ARNATAKA STATE CO- OPERATIVE APEX BANK (SUPRA) IS APPLICABLE TO THE FACTS OF THIS CASE. BY RESPECTFULLY FOLLOWING THE J UDGMENT OF THE APEX COURT IN KARNATAKA STATE CO-OPERATIVE BANK (SU PRA), THE ORDER OF THE COMMISSIONER OF INCOME-TAX(A) IS UPHEL D. 6. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. 11.3 IN THE INSTANT CASE THERE IS NO DISPUTE TO THE FACT THAT THE SOCIETY IS A CREDIT COOPERATIVE SOCIETY AUTHORISED BY THE R EGISTRAR OF COOPERATIVE SOCIETIES FOR ACCEPTING DEPOSITS AND LE NDING MONEY TO ITS MEMBERS AS PER LICENSE GRANTED BY THE REGISTRAR OF COOPERATIVE SOCIETIES AND THE MAIN OBJECT OF THE SOCIETY IS TO PROVIDE CREDIT FACILITY TO MEMBERS WHO CAN BE ANY PERSON OF THE SOCIETY. WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF MAHAVIR NAGARI SAHAKARI PAT SANSTHA LTD. REPORTED IN 74 TTJ 793 (PUNE) HAS HELD THAT THE CREDIT SOCIETY WHICH IS CARRYING ON THE BUSINESS OF BANKIN G ACTIVITY AND PROVIDING CREDIT FACILITY TO ITS MEMBERS IS ELIGIBL E FOR DEDUCTION U/S.80P(2)(A)(I). IN VIEW OF THE ABOVE DISCUSSION A ND FOLLOWING THE DECISIONS OF THE AHMEDABAD BENCH OF THE TRIBUNAL AN D COCHIN BENCH OF THE TRIBUNAL WHICH IN TURN HAVE CONSIDERED THE D ECISION OF THE 9 ITA NO.1567 & 1568/PN/2016 HONBLE SUPREME COURT IN THE CASE OF TOTAGARS COOP ERATIVE SALE SOCIETY LTD. (SUPRA) WE FIND NO INFIRMITY IN THE OR DER OF THE LD.CIT(A). ACCORDINGLY, THE SAME IS UPHELD AND THE GROUNDS RAI SED BY THE REVENUE ARE DISMISSED. 12. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. 7. FOLLOWING THE AFORESAID PRECEDENT, WHICH HAS BEEN RENDERED IN IDENTICAL CIRCUMSTANCES AND FOR THE SAKE OF MAINTAININ G CONSISTENCY, WE AFFIRM THE ACTION OF THE CIT(A) ALLOWING THE CLAIM OF THE ASSESSEE FOR EXEMPTION U/S 80P(2)(A)(I) OF THE ACT IN RELATION T O A SUM OF RS.75,36,432/-. ACCORDINGLY,REVENUE FAILS IN ITS APPE AL. 10. I FIND THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF SHRI LAXMI NARAYAN NAGARI SAHAKARI PATSANSTHA MARYADIT V IDE ITA NO.604/PN/2014 ORDER DATED 19-08-2015 FOLLOWING THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF TUMKUR M ERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO REPORTED IN 55 TAXMA NN.COM 447 (TO WHICH I AM A PARTY) HAS OBSERVED AS UNDER : 9. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BO TH 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 CONSI DERED THE VARIOUS DECISIONS CITED BEFORE US. THE ONLY DISPUTE TO BE DECI DED IN THE GROUNDS RAISED BY THE ASSESSEE IS THAT WHETHER THE INTEREST AMOUNT ING TO RS.25,01,774/- EARNED BY THE ASSESSEE ON SHORT TERM DEPOSI TS 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 TH E AO FOLLOWING THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF THE TOTGARS COOPERATIVE SALE SOCIETY LTD. (SUPRA) TREATED THE I NTEREST EARNED FROM SUCH SHORT TERM DEPOSITS AS INCOME FROM OTHER SOURCES AN D 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 DE CISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF TUMKUR MERCHANTS SOUHARDS CREDIT COOPERATIVE LTD. (SUPRA) THE INTEREST EARNED FROM SUC H SHORT TERM DEPOSITS WITH BANK IS ENTITLED TO DEDUCTION U/S.80P(2)( A)(I). WE FIND THE HONBLE HIGH COURT OF KARNATAKA AFTER CONSIDERING TH E DECISION OF HONBLE SUPREME COURT IN THE CASE OF TOTGARS COOPERATIVE SA LE SOCIETY LTD. (SUPRA) HELD THAT THE INTEREST EARNED BY SUCH COOPERA TIVE SOCIETIES ON SHORT TERM DEPOSITS WITH SCHEDULED BANKS IS ELIGIBLE FOR DEDUCTION U/S.80P(2)(A)(I). THE RELEVANT OBSERVATION OF THE HO NBLE HIGH COURT FROM PARA 6 ONWARDS READ AS UNDER : 9. FOLLOWING THE ABOVE DECISION, I SET ASIDE THE ORDER OF TH E CIT(A) AND DIRECT THE AO TO ALLOW THE CLAIM OF THE ASSESSEE ON THE INTEREST INCOME OF RS.8,07,379/- EARNED FROM SURPLUS FUNDS DEPOSITED WITH BANK OF INDIA, MANGALWEDA BRANCH AS BUSINESS INCOME AN D THEREBY ALLOW DEDUCTION U/S.80P(2)(A)(I) TO THE ASSESSEE. GROUNDS RAISE D BY THE ASSESSEE ARE ACCORDINGLY ALLOWED. 10 ITA NO.1567 & 1568/PN/2016 ITA NO.1568/PN/2016 (A.Y. 2012-13) : 10. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET DID NOT PRESS GROUNDS OF APPEAL NO.2 AND 3 FOR WHICH THE LD. DR HAS NO OBJECTION. ACCORDINGLY, THE ABOVE TWO GROUNDS ARE DISMISSED AS NOT PRESSE D. 11. GROUND OF APPEAL NO.1 BY THE ASSESSEE READS AS UNDER : 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE AND I N LAW, THE LOWER AUTHORITIES HAVE ERRED IN DISALLOWING THE DEDUC TION U/S.80P(2)(A)(I) OF INCOME TAX ACT, 1961 ON INTEREST RECEIVED FROM BANKS OTHER THAN COOPERATIVE BANKS BY DISREGARDING APP ELLANTS SUBMISSION THAT THE INVESTMENT IN THESE BANKS IN THE FORM OF DEPOSITS WAS MADE IN THE ORDINARY COURSE OF BUSINESS THEREFORE IN TEREST EARNED IS PART OF BUSINESS INCOME AND YOUR APPELLANT IS ELIGIBLE FOR THE DEDUCTION. 12. AFTER HEARING BOTH THE SIDES, I FIND THE AO DISALLOWED T HE CLAIM OF DEDUCTION U/S.80P(2)(A)(I) ON THE INTEREST INCOME OF RS.19,12,0 40/- BEING INTEREST ON DEPOSITS WITH BANKS OTHER THAN COOPER ATIVE BANKS. THE LD.CIT(A) UPHELD THE ACTION OF THE AO. I FIND AN IDENT ICAL ISSUE HAS BEEN DECIDED IN ASSESSEES OWN CASE FOR A.Y. 2010-11 IN THE PRECEDING PARAGRAPHS. FOLLOWING THE SAME REASONINGS, I HOLD THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S.80P(2)(A)(I) ON THE INTERE ST INCOME RECEIVED FROM BANKS OTHER THAN COOPERATIVE BANKS . GROUND OF APPEAL NO.1 BY THE ASSESSEE IS ACCORDINGLY ALLOWED. 13. GROUND OF APPEAL NO.4 BY THE ASSESSEE READS AS UNDER : 4. ALTERNATIVELY, IT IS FURTHER SUBMITTED THAT EVEN BY ASSUMING AND NOT CONCEDING THAT THE PROVISIONS OF SECTION 40(A)(IA) ARE APPLICABLE AND DISALLOWANCE WAS JUSTIFIED IN SUCH CASE THE ENHANCED PRO FIT IS STILL ATTRIBUTABLE TO THE BUSINESS OF THE ASSESSEE AND THEREFORE YOUR APPELLANT IS ENTITLED FOR THE DEDUCTION U/S.80P(2)(I)(A), SAME MAY KINDLY BE ALLOWED. 14. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IN THE INSTANT CASE HAS NOT DEDUCTED TDS ON AN AMOUNT OF RS.26,77,870/ - PAID TO 11 ITA NO.1567 & 1568/PN/2016 VARIOUS AGENTS TOWARDS PIGMY COMMISSION. THE AO, THEREFOR E, CONFRONTED THE SAME TO THE ASSESSEE DURING THE COURSE OF ASSESSMENT PROCEEDINGS. REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE THE AO MADE ADDITION OF THE ENTIRE AMOUNT OF RS.26,77,870/- FOR VIOLATION OF PROVISIONS OF SECTION 40(A)(IA) OF THE I.T. ACT. 15. IN APPEAL THE LD.CIT(A) UPHELD THE ACTION OF THE AO. A GGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BE FORE THE TRIBUNAL. 16. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET FILED T HE FOLLOWING DECISIONS AND SUBMITTED THAT IDENTICAL ISSUE HAS BEEN DEC IDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE. THEREFORE, THIS BEING A COVERED MATTER THE GROUNDS RAISED BY THE ASSESSEE SHOULD BE ALLOWED : 1. DY.CIT VS. SHRI AGRASEN SAHAKARI PATSANSTHA MARYAD IT AND VICE VERSA VIDE ITA NOS. 1459/PN/2005 & ITA NO.1460/PN/200 5 ORDER DATED 30-06-2011. 2. JAY TULJABHAVANI SAH. PATPEDHI PRAGATI VS. ITO VI DE ITA NO.979/PN/2010 ORDER DATED 30-12-2011 3. CIT VS. GEM PLUS JEWELLERY INDIA LTD. REPORTED IN 330 ITR 0175 17. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HAND HEAVILY RELIED ON THE ORDER OF THE CIT(A). HE SUBMITTED THAT ADDIT ION HAS BEEN RIGHTLY SUSTAINED BY THE CIT(A) FOR VIOLATION OF PROVISIONS OF SECTION 40(A)(IA). 18. I HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. I HAVE ALSO CONSIDERED THE VARIOU S DECISIONS CITED BEFORE ME. ADMITTEDLY, THE ASSESSEE IN THE INSTANT CASE HAS NOT DEDUCTED TAX U/S.194H OF THE I.T ACT FROM THE PAYMENTS MADE TO THE 12 ITA NO.1567 & 1568/PN/2016 COMMISSION AGENTS TOWARDS PIGMY COMMISSION. THE AO, THERE FORE, MADE ADDITION OF RS.26,77,870/- FOR VIOLATION OF THE PROVISION S OF SECTION 40(A)(IA) OF THE I.T. ACT WHICH HAS BEEN UPHELD BY TH E CIT(A). IT IS THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT SINCE THE INCOME OF THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S.80P, TH EREFORE, THE ADDITION MADE U/S.40(A)(IA) WILL AUTOMATICALLY QUALIFY FOR DEDUCTION U/S.80P. I FIND MERIT IN THE ABOVE SUBMISSION OF L D. COUNSEL FOR THE ASSESSEE. I FIND AN IDENTICAL ISSUE HAD COM E UP BEFORE THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF JAY TULJAB HAVANI SAH. PARPEDHI PRAGATI VS. ITO VIDE ITA NO.979/PN/2010 ORDER D ATED 30- 12-2011 FOR A.Y. 2006-07. I FIND THE TRIBUNAL FOLLOWING VARIOU S DECISIONS HAS ALLOWED SIMILAR CLAIM MADE BY THE ASSESSEE. TH E RELEVANT OBSERVATION OF THE TRIBUNAL AT PARA 3 AND 4 OF T HE ORDER READ AS UNDER : 3. THE NEXT ISSUE PERTAINS TO THE CLAIM OF DEDUCTION U/S 80P IN RESPECT OF THE AMOUNT DISALLOWED U/S 40(A)(IA) OF THE ACT. THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY DECISION OF CO-ORDI NATE BENCH OF THIS TRIBUNAL IN THE CASE OF DY. CIT VS. BORA AGRO FOODS IN ITA NO. 1438/PN/2010 FOR A.Y. 2007-08 WHEREIN VIDE ITS ORDER DATED 31-3-2011, THE TRIBUNAL HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSE SSEE BY OBSERVING AS UNDER: '3. HAVING GONE THROUGH THE FIRST APPELLATE ORDER, WE FIND THAT THE ISSUE RAISED IS FULLY COVERED BY THE DECISION OF HON 'BLE JURISDICTIONAL HIGH CURT IN THE CASE OF CIT VS. GEM PL US JEWELLERY INDIA LTD., IN ITA NO 2426 OF 2009 DATED 21-3-2010 HOLDING THAT THE APPELLANT WAS ELIGIBLE FOR ADDITIONAL CLAIM U/S 1 0A DUE TO ENHANCEMENT OF INCOME ON ACCOUNT OF DISALLOWANCE U/S 43B OF THE ACT. THE HON'BLE HIGH COURT WAS PLEASED TO HOLD THERE IN THAT THIS ENHANCEMENT RESULTED IN INCREASE IN THE BUSINESS PROFIT OF THE ASSESSEE WHICH WAS ELIGIBLE FOR DEDUCTION U/S 10A. THE BO MBAY BENCH OF THE TRIBUNAL IN THE CASE OF SABA SOFTWARE PV T. LTD. VS. ITO IN ITA NO. 1454/BOM/2009 DATED 27-1-2010 HAS ALSO GIV EN SIMILAR DECISION. FOLLOWING THESE DECISIONS AS WELL AS DE CISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF VERITAS SOF TWARE INDIA LTD., ITA NO. 135 AND 1374/PN/2006 IN THIS RESPECT TH E LD. CIT(A) HAS ALLOWED THE CLAIMED DEDUCTION U/S 10B OF THE ACT TO THE ASSESSEE ON THE ADDITION MADE BY WAY OF DISALLOWANCE U/S 40(A)(IA) OF THE ACT MADE ON ACCOUNT OF NON-DEDUCTI ON OF TDS. WE THUS DO NOT FIND REASON TO INTERFERE WITH THE FIRST AP PELLATE ORDER ON THE ISSUE. THE SAME IS UPHELD. THE JAY TULJABHAVANI PATPEDHI 13 ITA NO.1567 & 1568/PN/2016 A.Y. 2006-07 ISSUE IS THUS DECIDED AGAINST THE REVENUE. RELATED GROUNDS NO. 1 TO 5 INVOLVING THE ISSUE ARE THUS REJECTE D.' 4. WE ALSO FIND THAT THE AFORESAID DECISION OF THE TR IBUNAL IN THE CASE OF BORA AGRO FOODS (SUPRA) HAS BEEN FOLLOWED BY CO-OR DINATE BENCH OF THIS TRIBUNAL IN THE CASE OF DY. CIT VS. SHRI AGRASEN SA H. PATSANSTHA MARYADIT, DHULE IN ITA NO. 1459 AND 1460/PN/2005 FO R AY. 1999-00 AND 2000-01 VIDE ITS ORDER DATED 30-6-2011. SIMILAR VIEW HAS BEEN TAKEN BY ITAT MUMBAI 'E' BENCH IN THE CASE OF S.B. BUILDERS AN D DEVELOPERS VS. ITO (2011) 50 DTR 299. FACTS BEING SIMILAR, SO FOLLOWING T HE REASONING GIVEN IN THE AFORESAID DECISIONS OF VARIOUS BENCHES OF THE TRI BUNAL, WE DIRECT THE AUTHORITIES BELOW TO ALLOW THE CLAIM OF DEDUCTIO N U/S 80P MADE BY THE ASSESSEE ON ENHANCED INCOME. 19. FACTS BEING SIMILAR, THEREFORE, FOLLOWING THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF JAY TULJABHAVANI S AH. PARPEDHI PRAGATI (SUPRA), THE GROUND RAISED BY THE ASSESS EE IS ALLOWED. 20. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSE E ARE PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26-08-2016. SD/- ( R.K. PANDA ) ACCOUNTANT MEMBER PUNE ; DATED : 26 TH AUGUST, 2016. '# $# / COPY OF THE ORDER FORWARDED TO : / BY ORDER , // TRUE COPY // // TRUE COPY // // $ % //UE &' % * / SR. PRIVATE SECRETARY *, / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3 . THE CIT (A) - 7, PUNE 4. THE CIT - 7, PUNE 5. $ %%* , * , SMC BENCH / DR, ITAT, SMC BENCH PUNE; 6. 2 / GUARD FILE.