I.T.O Wd - 46(4),kol, Kolkata V. The Baksara Cooperative Credit Society Ltd., Howrah

ITA 1890/KOL/2012

• Counselvise Citation: 189023514 RSA 2012
• Duration Of Justice: 2 year(s) 10 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-11-2015
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 21-12-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income
• Section: 56

Judgement Text

I.T.A. NO. 1890/KOL./2012 ASSESSMENT YEAR: 2009-2010 PAGE 1 OF 9 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER I.T.A. NO. 1890/KOL/ 2012 ASSESSMENT YEAR : 2009-2010 INCOME TAX OFFICER,................................ ............................APPELLANT WARD-46(4), KOLKATA, 3, GOVERNMENT WEST, 2 ND FLOOR, ROOM NO. 2/16A, KOLKATA-700 001 -VS.- THE BAKSARA COOPERATIVE CREDIT SOCIETY LTD.,....... ............RESPONDENT LMC SARANI, BAKSARA, HOWRAH-711 110 [PAN : AAAJT 0469 J] APPEARANCES BY: SHRI S.M. SARFARAZUT TAUHEED, JCIT, SR. D.R., FOR T HE DEPARTMENT SHRI A.K. TIBREWAL, FCA , AND SHRI AMIT AGARWAL, ADVOCATE, FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : OCTOBER 06, 2015 DATE OF PRONOUNCING THE ORDER : NOVEMBER 18, 2015 O R D E R PER SHRI P.M. JAGTAP :- THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXX, KOLKATA D ATED 30.08.2012 FOR THE ASSESSMENT YEAR 2009-10. 2. IN GROUND NO. 1 RAISED IN THIS APPEAL, THE REVEN UE HAS CHALLENGED THE ACTION OF THE LD. CIT(APPEALS) IN DELETING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ASSESSEES CLAI M FOR DEDUCTION UNDER SECTION 80(P)(2)(A)(I) OF THE ACT. 3. THE ASSESSEE IN THE PRESENT CASE IS A COOPERATIV E SOCIETY, WHICH IS ENGAGED IN PROVIDING CREDIT FACILITIES TO ITS MEMBE RS AS EVIDENCED BY ITS I.T.A. NO. 1890/KOL./2012 ASSESSMENT YEAR: 2009-2010 PAGE 2 OF 9 BYE LAWS. THE RETURN OF INCOME FOR THE YEAR UNDER C ONSIDERATION WAS FILED BY IT ON 15.09.2009 DECLARING TOTAL INCOME AT NIL A FTER CLAIMING ITS ENTIRE INCOME AS DEDUCTION UNDER SECTION 80P OF THE INCOME TAX ACT. ACCORDING TO THE ASSESSING OFFICER, THE ASSESSEE, BEING COVER ED EITHER IN THE CATEGORY OF PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY AGRICULTURAL COOPERATIVE AND RURAL DEVELOPMENT BANK, WAS NOT ELI GIBLE FOR DEDUCTION UNDER SECTION 80P. HE, THEREFORE, DISALLOWED THE CL AIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 80P HOLDING THAT THE CLAIM OF THE ASSESSEE FOR SUCH DEDUCTION WAS NOT TENABLE AS PER THE PROVISION S OF SECTION 80P(4) OF THE ACT. 4. THE DISALLOWANCE MADE BY THE ASSESSING OFFICER O N ACCOUNT OF ITS CLAIM FOR DEDUCTION UNDER SECTION 80P WAS CHALLENGE D BY THE ASSESSEE IN THE APPEAL FILED BEFORE THE LD. CIT(APPEALS). DURIN G THE COURSE OF THE APPELLATE PROCEEDINGS BEFORE THE LD. CIT(APPEALS), IT WAS SUBMITTED THAT THE ASSESSEE IS A COOPERATIVE SOCIETY, WHICH IS DIS TINGUISHED FROM A COOPERATIVE BANK AND, THEREFORE, THE PROVISION OF S ECTION 80P(4) INVOKED BY THE ASSESSING OFFICER TO DENY ITS CLAIM FOR DEDU CTION UNDER SECTION 80P WAS NOT CORRECT. RELIANCE IN SUPPORT OF THIS CONTEN TION WAS PLACED BY THE ASSESSEE ON THE DECISION OF THE BANGALORE BENCH OF ITAT IN THE CASE OF BANGALORE COMMERCIAL TRANSPORT CREDIT COOPERATIVE S OCIETY LIMITED (ITA NO. 1069/BANG./2010 DATED 08.04.2011), WHEREIN IT W AS HELD THAT THERE IS A CLEAR DISTINCTION BETWEEN A COOPERATIVE BANK A ND A COOPERATIVE SOCIETY AND THAT WHILE THE PROVISIONS OF SECTION 80 P(4) ARE APPLICABLE ONLY TO COOPERATIVE BANKS, CREDIT COOPERATIVE SOCIE TIES ARE ENTITLED FOR DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT. RE LIANCE WAS ALSO PLACED BY THE ASSESSEE ON THE DECISION OF TRIBUNAL IN THE CASE OF DWARKA SOUHARDA CREDIT SAHAKARI LIMITED, WHEREIN IT WAS HE LD THAT NONE OF THE AIMS AND OBJECTS OF THE ASSESSEE-SOCIETY PERMITTING IT TO ACCEPT DEPOSITS OF MONEY FROM PUBLIC FOR THE PURPOSE OF LENDING OR INVESTMENT, IT COULD NOT BE REGARDED AS A COOPERATIVE BANK AS DEFINED UN DER PART V OF THE BANKING REGULATION ACT, 1949 AND, THEREFORE, THE PR OVISIONS OF SECTION 80P(4) READ WITH EXPLANATION THERETO WOULD NOT BE A PPLICABLE. IT WAS HELD I.T.A. NO. 1890/KOL./2012 ASSESSMENT YEAR: 2009-2010 PAGE 3 OF 9 THAT THE ASSESSEE-SOCIETY THUS WAS ENTITLED FOR DED UCTION UNDER SECTION 80P(2)(A)(I). AFTER TAKING INTO CONSIDERATION THE R ATIO OF THIS TRIBUNALS DECISION CITED ON BEHALF OF THE ASSESSEE, THE LD. C IT(APPEALS) FOUND THAT THE SAME WAS SQUARELY APPLICABLE IN THE CASE OF THE ASSESSEE, INASMUCH AS, NONE OF THE OBJECTS OF THE ASSESSEE-SOCIETY ALLOWED IT TO ACCEPT DEPOSITS OF MONEY FROM PUBLIC FOR THE PURPOSE OF LENDING OR INVESTMENT AND ACCORDINGLY FOLLOWING THE SAME, HE HELD THAT THE CA SE OF THE ASSESSEE WAS NOT COVERED BY THE PROVISIONS OF SECTION 80P(4) AND IT WAS ELIGIBLE FOR DEDUCTION UNDER SECTION 80P(2)(A)(I) AS CLAIMED IN THE RETURN OF INCOME. 5. LD. D.R. AT THE TIME OF HEARING BEFORE US RELIED ON THE ORDER OF THE ASSESSING OFFICER IN SUPPORT OF THE REVENUES CASE ON THIS ISSUE. LEARNED COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, REITER ATED BEFORE US THE SUBMISSIONS MADE ON THIS ISSUE BEFORE THE LD. CIT(A PPEALS). HE CONTENDED THAT THE PROVISIONS OF SECTION 80P(4) RELIED UPON B Y THE ASSESSING OFFICER TO DISALLOW THE CLAIM OF THE ASSESSEE FOR DEDUCTION ARE NOT APPLICABLE IN THE CASE OF THE ASSESSEE AS RIGHTLY HELD BY THE LD. CIT(APPEALS) SINCE THE ASSESSEE IS NOT A COOPERATIVE BANK. HE SUBMITTED TH AT THE ASSESSEE HAS ACCEPTED DEPOSITS ONLY FROM THE MEMBERS AND HAS ALS O GIVEN LOANS ONLY TO THE MEMBERS AND THERE BEING NO TRANSACTION WITH NON -MEMBERS, THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 80P (2)(A)(I) IS RIGHTLY ALLOWED BY THE LD. CIT(APPEALS) BY FOLLOWING THE DE CISION OF THE TRIBUNAL CITED BY THE ASSESSEE BEFORE HIM IN SUPPORT OF ITS CLAIM. 6. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. AS FOUND BY THE LD. C IT(APPEALS), FROM THE PERUSAL OF THE OBJECTS OF THE ASSESSEE-SOCIETY AS E XTRACTED BY HIM IN THE IMPUGNED ORDER FROM THE BYE-LAWS, THE ASSESSEE-SOCI ETY IS NOT ALLOWED TO ACCEPT DEPOSITS OF MONEY FROM PUBLIC FOR THE PURPOS E OF LENDING OR INVESTMENT. AS FURTHER FOUND BY HIM, THE ENTIRE TRA NSACTIONS OF ACCEPTING DEPOSITS AND GIVING LOANS HAVE BEEN DONE BY THE ASS ESSEE-SOCIETY WITH ITS MEMBERS ONLY AND THERE ARE NO SUCH TRANSACTIONS DON E BY IT WITH NON- MEMBERS. HE HAS ALSO FOUND THAT THE ASSESSEE-SOCIET Y WAS NOT REGISTERED I.T.A. NO. 1890/KOL./2012 ASSESSMENT YEAR: 2009-2010 PAGE 4 OF 9 UNDER THE BANKING REGULATION ACT, 1949 AND IT WAS R EGISTERED UNDER THE WEST BENGAL COOPERATIVE SOCIETIES ACT, 1983. ON THE BASIS OF ALL THESE FINDINGS OF FACT RECORDED BY HIM, THE LD. CIT(APPEA LS) HAS HELD, BY FOLLOWING THE DECISION OF THE TRIBUNAL CITED ON BEH ALF OF THE ASSESSEE BEFORE HIM, THAT THE ASSESSEE-SOCIETY IS NOT A COOP ERATIVE BANK, WHICH IS COVERED BY SECTION 80P(4) AND IT IS, THEREFORE, ELI GIBLE FOR DEDUCTION UNDER SECTION 80P(2)(A)(I). AT THE TIME OF HEARING BEFORE US, LD. D.R. HAS NOT BEEN ABLE TO REBUT OR CONTROVERT ANY OF THE FIN DINGS OF FACTS RECORDED BY THE LD. CIT(APPEALS). HE HAS ALSO NOT BEEN ABLE TO CITE ANY AUTHORITY WHERE A DIFFERENT OR CONTRARY VIEW IS TAKEN ON THIS ISSUE, WHICH IS IN FAVOUR OF THE REVENUE. WE, THEREFORE, FIND NO JUSTI FIABLE REASON TO INTERFERE WITH THE IMPUGNED ORDER OF THE LD. CIT(AP PEALS) ALLOWING THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 8 0P(2)(A)(I) AND UPHOLDING HIS IMPUGNED ORDER ON THIS ISSUE, WE DISM ISS GROUND NO. 1 OF THE REVENUES APPEAL. 7. IN GROUND NO. 2, THE REVENUE HAS CHALLENGED THE ACTION OF THE LD. CIT(APPEALS) IN DIRECTING THE ASSESSING OFFICER TO TREAT THE INTEREST INCOME OF RS.2,06,49,203/- EARNED BY THE ASSESSEE O N ITS INVESTMENT AS BUSINESS INCOME ELIGIBLE FOR DEDUCTION UNDER SECTIO N 80P(2)(A)(I) OF THE ACT. 8. IN ITS RETURN OF INCOME FILED FOR THE YEAR UNDER CONSIDERATION, INTEREST INCOME OF RS.2,06,49,203/- RECEIVED BY THE ASSESSEE-SOCIETY ON VARIOUS BANK DEPOSITS WAS DECLARED AS ITS BUSINESS INCOME AND DEDUCTION UNDER SECTION 80P(2)(A)(I) WAS CLAIMED FOR THE SAME . IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3), THE SAME WAS BROUGH T TO TAX BY THE ASSESSING OFFICER IN THE HANDS OF THE ASSESSEE UNDE R THE HEAD INCOME FROM OTHER SOURCES. BEFORE THE LD. CIT(APPEALS), I T WAS SUBMITTED THAT ITS SURPLUS FUNDS AND STATUTORY FUNDS WERE INVESTED BY THE ASSESSEE SOCIETY IN FIXED DEPOSIT WITH BANKS AS WELL AS IN OTHER INV ESTMENTS FOR ATTAINMENT OF ITS OBJECTS OF GRANTING CREDIT FACILITIES OF ITS MEMBERS. IT WAS CONTENDED THAT THE SAID INVESTMENTS WERE MADE IN ACCORDANCE W ITH THE OBJECTS OF THE I.T.A. NO. 1890/KOL./2012 ASSESSMENT YEAR: 2009-2010 PAGE 5 OF 9 ASSESSEE-SOCIETY AND, THEREFORE, THE INCOME ARISING FROM THEM CONSTITUTED ITS BUSINESS PROFIT, WHICH WAS ENTITLED FOR DEDUCTI ON UNDER SECTION 80P(2)(A)(I) OF THE ACT. LD. CIT(APPEALS) FOUND MER IT IN THIS CONTENTION RAISED ON BEHALF OF THE ASSESSEE AND ALLOWED ITS CL AIM FOR DEDUCTION UNDER SECTION 80P(2)(A)(I) IN RESPECT OF INTEREST IN QUES TION BY TREATING THE SAME AS ITS BUSINESS INCOME FOR THE FOLLOWING REASO NS GIVEN IN PARAGRAPH NO. 2.2 OF ITS IMPUGNED ORDER:- 2.2. THE SUBMISSIONS OF THE APPELLANT HAVE BEEN CONSIDERED AND IT IS SEEN THAT THE A.O. HAS NEITHER DISCUSSED THIS ISSUE IN THE ASSESSMENT ORDER NOR AS HE GIVEN REASONS FOR THIS TAKING THE INCOME FROM F.D. ETC. AT RS.2,0 6,49,203/- UNDER THE HEAD INCOME FROM OTHER SOURCES. IT IS FUR THER SEEN THAT AS POINTED OUT BY THE APPELLANT THAT THE OBJEC TS OF THE SOCIETY IS TO CREATE FUNDS FOR THE LENDING OF MONEY TO ITS MEMBERS AND THEREFORE IT IS CLEAR THAT IT WAS THE B USINESS OF THE SOCIETY TO MAKE INVESTMENT IN ORDER TO GENERATE FUNDS FOR THE UTILIZATION OF THE MEMBERS OF THE SOCIETY A ND THIS WAS BEING DONE BY INVESTMENTS ON WHICH THE INTEREST INCOME REFERRED TO ABOVE HAS BEEN EARNED. THEREFORE, IT IS CLEAR THAT THIS INCOME IS RIGHTLY BEEN SHOWN AS BUSINESS INCOM E BY THE APPELLANT WHEREAS THE AO HAS TAKEN THE SAME AS INCO ME FROM OTHER SOURCES WITHOUT ANY BASIS THE COMPUTATIO N DONE BY THE AO IS THEREFORE FOUND TO BE NOT CORRECT. THE ISSUE OF DEDUCTION U/S 80P HAS ALREADY BEEN DECIDED IN RESPE CT OF GROUND OF APPEAL NO. 1. THIS GROUND OF APPEAL OF TH E APPELLANT IS ACCORDINGLY ALLOWED. 9. LD. D.R. CONTENDED THAT THIS ISSUE INVOLVED IN T HE APPEAL OF THE REVENUE IS SQUARELY COVERED IN FAVOUR OF THE REVENU E BY THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF TOTGARS C OOPERATIVE SALE SOCIETY LIMITED VS.- ITO REPORTED IN [2010] 322 IT R 283, WHEREIN IT WAS HELD THAT INTEREST INCOME ARISING TO A COOPERATIVE SOCIETY CARRYING ON THE BUSINESS OF PROVIDING CREDIT FACILITIES TO ITS MEM BERS OR MARKETING OF AGRICULTURAL PRODUCE OF ITS MEMBERS, ON THE SURPLUS , WHICH IS NOT REQUIRED IMMEDIATELY FOR BUSINESS PURPOSES, FROM INVESTMENT IN SHORT-TERM DEPOSITS AND SECURITIES, HAS TO BE TAXED AS INCOME FROM OTHER SOURCES. HE CONTENDED THAT THE RELIEF ALLOWED BY THE LD. CIT(AP PEALS) VIDE HIS IMPUGNED ORDER PASSED IN ASSESSEES CASE THUS IS NO T IN ACCORDANCE WITH I.T.A. NO. 1890/KOL./2012 ASSESSMENT YEAR: 2009-2010 PAGE 6 OF 9 LAW LAID DOWN BY THE HONBLE SUPREME COURT IN THE C ASE OF TOTGARS COOPERATIVE SALE SOCIETY LIMITED. 10. LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND , CONTENDED THAT THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F TOTGARS COOPERATIVE SALE SOCIETY LIMITED (SUPRA) CITED BY THE LD. D.R. IS DISTINGUISHABLE ON FACTS. HE SUBMITTED THAT SUCH DISTINCTION, IN FACT, HAS BEEN HIGHLIGHTED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF TUM KUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LIMITED VS.- ITO REPOR TED IN [2015] 55 TAXMANN.COM 447 (KAR.) BY POINTING OUT THAT THE AMO UNT INVESTED BY THE ASSESSEE-SOCIETY IN THE CASE OF TOTGARS COOPERATIV E SALE SOCIETY LIMITED WAS PAYABLE TO ITS MEMBERS FROM WHOM PRODUCE WAS BO UGHT AND IN THESE FACTS OF THAT CASE, IT WAS HELD BY THE HONBLE APEX COURT THAT THE ASSESSING OFFICER WAS RIGHT IN TAXING THE INTEREST INCOME UNDER SECTION 56 OF THE ACT. HE CONTENDED THAT THE FACTS INVOLVED IN THE PRESENT CASE, HOWEVER, ARE DIFFERENT, INASMUCH AS, THE INVESTMENT WAS MADE BY THE ASSESSEE-SOCIETY OUT OF SURPLUS FUND AND NOT FROM A NY AMOUNT DUE TO ITS MEMBERS AND, THEREFORE, INTEREST EARNED ON SUCH INV ESTMENT, WHICH IS ATTRIBUTABLE TO THE BUSINESS OF THE ASSESSEE-SOCIET Y, IS ASSESSABLE AS ITS BUSINESS INCOME, AND THE BENEFIT OF DEDUCTION UNDER SECTION 80P(2)(A)(I) IS AVAILABLE FOR THE SAME. WITHOUT PREJUDICE TO THI S MAIN CONTENTION AND AS AN ALTERNATIVE, LD. COUNSEL FOR THE ASSESSEE CON TENDED THAT IF ALL THE INTEREST IN QUESTION IS TREATED AS ASSESSABLE TO TA X UNDER THE HEAD INCOME FROM OTHER SOURCES, CORRESPONDING DEDUCTION ON ACC OUNT OF EXPENSES ATTRIBUTABLE TO THE EARNING OF SUCH INCOME SHOULD B E ALLOWED. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CA REFULLY PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. IN THE CASE OF TOTGARS COOPERATIVE SALE SOCIETY LIMITED (SUPRA) CITED BY THE LD. D.R. IN SUPPORT OF THE REVENUES CASE ON THE ISSUE UNDER CONSIDERATION, TH E ASSESSEE-SOCIETY BESIDES CARRYING ON THE BUSINESS OF PROVIDING CREDI T FACILITIES TO ITS MEMBERS WAS ALSO MARKETING ITS AGRICULTURAL PRODUCE . THE SALE PROCEED OF SUCH AGRICULTURAL PRODUCE, WHICH WAS PAYABLE TO ITS MEMBERS, IN MANY I.T.A. NO. 1890/KOL./2012 ASSESSMENT YEAR: 2009-2010 PAGE 7 OF 9 CASES, WAS RETAINED BY THE ASSESSEE-SOCIETY AND THE SAME WAS INVESTED IN SHORT-TERM DEPOSITS/SECURITIES. IN THESE FACTS AND CIRCUMSTANCES OF THE CASE, INTEREST INCOME RECEIVED ON SHORT-TERM DEPOSI TS/SECURITIES WAS HELD TO BE CHARGEABLE TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES BY THE HONBLE SUPREME COURT OBSERVING THAT THE AMOUNT INV ESTED BY THE ASSESSEE WAS A LIABILITY PAYABLE TO ITS MEMBERS, AN D, THEREFORE, THE INTEREST INCOME COULD NOT BE SAID TO BE ATTRIBUTABL E TO THE ACTIVITY MENTIONED IN SECTION 80P(2)(A)(I). IN THE CASE OF T UMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LIMITED (SUPRA) CITED B Y THE LD. COUNSEL FOR THE ASSESSEE, THE AMOUNT, WHICH WAS INVESTED IN BAN K TO EARN INTEREST, WAS NOT AN AMOUNT DUE TO ANY MEMBER AND WHICH WAS N OT THE LIABILITY SHOWN IN THEIR ACCOUNTS. IN FACT, THE SAID AMOUNT, WHICH WAS IN THE NATURE OF PROFIT AND GAINS, WAS NOT IMMEDIATELY REQUIRED B Y THE ASSESSEE FOR LENDING MONEY TO THE MEMBERS AS THERE WERE NO TAKER S AND THE SAME, THEREFORE, HAD BEEN DEPOSITED IN A BANK SO AS TO EA RN INTEREST. IN THESE FACTS AND CIRCUMSTANCES OF THE CASE, AS INVOLVED IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LIMITED (SUPR A), THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF TOTGARS C OOPERATIVE SALE SOCIETY LIMITED WAS FOUND TO BE DISTINGUISHABLE ON FACTS BY THE HONBLE KARNATAKA HIGH COURT AND THE INTEREST INCOME RECEIV ED BY THE ASSESSEE- SOCIETY ON BANK DEPOSITS WAS HELD TO BE ITS BUSINES S INCOME BEING ATTRIBUTABLE TO CARRYING ON THE BUSINESS OF BANKING ELIGIBLE FOR DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT. 12. KEEPING IN VIEW THE DECISION OF THE HONBLE SUP REME COURT IN THE CASE OF TOTGARS COOPERATIVE SALE SOCIETY LIMITED ( SUPRA) CITED BY THE LD. D.R. AND THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LIMITE D (SUPRA) CITED BY THE LD. COUNSEL FOR THE ASSESSEE, THE QUESTION THAT ARISES IN THE CASE ON HAND, IS WHETHER THE INVESTMENT, WHICH IS MADE BY T HE ASSESSEE-SOCIETY AND WHICH HAS FETCHED INTEREST INCOME IN QUESTION, IS MADE OUT OF ITS OWN SURPLUS FUND, AS WAS THE CASE IN TUMKUR MERCHANTS S OUHARDA CREDIT COOPERATIVE LIMITED (SUPRA) OR THE SAME IS MADE OUT OF THE AMOUNT I.T.A. NO. 1890/KOL./2012 ASSESSMENT YEAR: 2009-2010 PAGE 8 OF 9 PAYABLE BY THE ASSESSEE-SOCIETY TO ITS MEMBERS, WHI CH REPRESENT ITS LIABILITY AS WAS THE CASE IN TOTGARS COOPERATIVE S ALE SOCIETY LIMITED. IN THIS REGARD, IT IS OBSERVED THAT THIS ASPECT HAS NO T BEEN SPECIFICALLY CONSIDERED EITHER BY THE ASSESSING OFFICER OR BY TH E LD. CIT(APPEALS) IN THEIR RESPECTIVE ORDERS AND, THEREFORE, THERE IS NO FINDING SPECIFICALLY GIVEN BY THEM ON THIS RELEVANT ASPECT. IN THIS REGA RD, A PERUSAL OF THE RELEVANT BALANCE-SHEET OF THE ASSESSEE AS ON 31.03. 2009 (COPY OF WHICH AT PAGES 67 & 68 OF THE PAPER BOOK), SHOWS THAT THE TO TAL INVESTMENT MADE BY THE ASSESSEE-SOCIETY WAS RS.22.08 CRORES AS ON 3 1.03.2009, WHEREAS THE RESERVES & SURPLUS AND PROFIT & LOSS A/C. BALAN CE AS ON THE SAID DATE WERE RS.1.76 CRORES AND 1.73 CRORES RESPECTIVELY. T HE MAJOR AMOUNT APPEARING ON THE LIABILITY SIDE OF THE BALANCE-SHEE T AS ON 31.03.2009 WAS DEPOSIT AND OTHER ACCOUNT AGGREGATING TO RS.28.89 C RORES, WHICH COMPRISED OF VARIOUS FUNDS AND DEPOSITS. KEEPING IN VIEW THESE FACTS AND FIGURES, WE ARE OF THE VIEW THAT THE ISSUE AS TO WH ETHER THE RELEVANT INVESTMENT IS MADE BY THE ASSESSEE OUT OF ITS OWN S URPLUS FUNDS OR OUT OF THE AMOUNT PAYABLE TO ITS MEMBERS, WHICH REPRESENT ITS LIABILITY, REQUIRES VERIFICATION IN ORDER TO DETERMINE THE EXACT HEAD O F INCOME UNDER WHICH THE INTEREST ON SUCH INVESTMENT IS CHARGEABLE TO TA X IN THE HANDS OF THE ASSESSEE BY APPLYING THE RELEVANT CASE LAWS. WE, TH EREFORE, SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) ON THIS ISSU E AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR DEC IDING THE SAME AFRESH AFTER VERIFYING THE RELEVANT FACTUAL POSITION FROM RECORD AND AFTER GIVING THE ASSESSEE PROPER AND SUFFICIENT OPPORTUNITY OF B EING HEARD. GROUND NO. 2 OF THE REVENUES APPEAL IS ACCORDINGLY TREATED AS ALLOWED FOR STATISTICAL PURPOSES. 13. IN THE RESULT, THE APPEAL OF THE REVENUE IS TRE ATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON NOVEMBER 18, 2015. SD/- SD/- (S.S. VISWANETHRA RAVI) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT MEMBER KOLKATA, THE 18 TH DAY OF NOVEMBER, 2015 I.T.A. NO. 1890/KOL./2012 ASSESSMENT YEAR: 2009-2010 PAGE 9 OF 9 COPIES TO : (1) INCOME TAX OFFICER, WARD-46(4), KOLKATA, 3, GOVERNMENT WEST, 2 ND FLOOR, ROOM NO. 2/16A, KOLKATA-700 001 (2) THE BAKSARA COOPERATIVE CREDIT SOCIETY LTD. LMC SARANI, BAKSARA, HOWRAH-711 110 (3) COMMISSIONER OF INCOME-TAX (APPEALS)- XXX, KO LKATA (4) COMMISSIONER OF INCOME TAX, KOLKATA (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.