Mahesh Nagari Sahkari Pat Sanstha Ltd., Sangli V. Income-tax Officer,

ITA 2180/PUN/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93726 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 30-04-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 17-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S U DESH
• Keywords: Business income; Revised return
• Section: 56; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE: SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO. 2180 /PN/201 3 ASSESSMENT YEAR : 20 10 - 11 MAHESH NAGARI SAHKARI PAT SANSTHA LTD., 1008, B KUNTE WADA, KAPAD PETH, SANGLI VS. INCOME TAX OFFICER, WARD 1(2), SANGLI (APPELLANT) (RESPONDENT) PAN NO. AAAAM0513F REVENUE BY: SHRI M.M. CHATE ASSESSEE BY: SHRI S.U. DESHPANDE DATE OF HEARING : 30-04-2015 DATE OF PRONOUNCEMENT : 13-05-2015 ORDER PER VIKAS AWASTHY, JM:- THE APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE OR DER OF COMMISSIONER OF INCOME TAX (APPEALS), KOLHAPUR DATED 06-1 1-2013 FOR THE ASSESSMENT YEAR 2010-11. THE ONLY ISSUE RAISED BY THE ASSESSEE IN APPEAL IS DISALLOWANCE OF DEDUCTION U/S. 80P(2)(A)(I) OF THE INCOM E TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORD S ARE: THE ASSESSEE IS A CO-OPERATIVE CREDIT SOCIETY. THE ASSESSE E FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010-11 ON 11-10-2010, DECLARING NIL INCOME. THE RETURN OF THE ASSESSEE WAS PROCESSED U/S. 143(1) ON 20-05-2011 DECLARING REFUND OF RS.4,940/-. IN THE MEANTIM E, THE ASSESSEE FILED REVISED RETURN OF INCOME ON 22-03-2011 DEC LARING NIL INCOME AND CLAIMING REFUND OF RS.44,710/-. IN BOTH THE RETU RNS OF 2 ITA NO. 2180/PN/2013, A.Y. 2010-11 INCOME THE ASSESSEE HAD DECLARED TOTAL INCOME OF RS.1,09,4 9,000/-. BOTH THE RETURNS OF INCOME, I.E. THE ORIGINAL RETURN AS W ELL AS THE REVISED RETURN WERE SELECTED FOR SCRUTINY. DURING THE COURSE OF SCRUTINY ASSESSMENT, THE ASSESSING OFFICER OBSERVED THAT DURING TH E PERIOD RELEVANT TO ASSESSMENT YEAR 2010-11, THE ASSESSEE HA S RECEIVED INTEREST OF RS.29,28,361/- FROM BANK DEPOSITS. ON THE SAID INTEREST INCOME THE ASSESSEE HAS CLAIMED DEDUCTION U/S. 80P(2)(A)(I) OF THE ACT. THE ASSESSING OFFICER HELD THAT THE INTEREST INCOME FROM DEPOSIT S WITH NON- COOPERATIVE BANKS IS NOT FROM CREDIT FACILITIES EXTENDED BY ASSESSEE TO ITS MEMBERS AND THUS, IS NOT A BUSINESS INCOME OF THE ASSESS EE. THE SAID INTEREST INCOMES DOES NOT QUALIFY FOR DEDUCTION U/S. 80P A ND IS CHARGEABLE TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES. AGGRIEVED BY THE ASSESSMENT ORDER DATED 18-12-2012, T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) BY FOLLOWING THE DEC ISION OF HONBLE SUPREME COURT OF INDIA IN THE CASE OF TOTGARS C O-OP. SALE SOCIETY LTD. VS. ITO REPORTED AS 322 ITR 283 (SC), DISMISS ED THE APPEAL OF ASSESSEE. THE ASSESSEE HAS NOW COME IN SECOND APPEAL BEFORE THE TRIBUNAL ASSAILING THE FINDINGS OF THE FIRST APPELLATE AUTHORITY. 3. SHRI S.U. DESHPANDE APPEARING ON BEHALF OF THE ASSESSE E SUBMITTED, THAT THE AUTHORITIES BELOW HAVE ERRED IN COMING TO THE CONCLUSION THAT THE INCOME OF RS.29,28,361/- ARE NOT FROM THE BUSINESS ACTIVITIES OF THE ASSESSEE. THE LD. AR FURTHER SUBMITTED T HAT THE AUTHORITIES BELOW HAVE GROSSLY ERRED IN FOLLOWING THE DECIS ION OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF TOTGARS C O-OP. SALE SOCIETY LTD. VS. ITO (SUPRA). HE CONTENDED THAT THE ISSUE IN APPEAL IS SQUARELY COVERED BY THE DECISION OF CO-ORDINATE BENCH O F THE TRIBUNAL IN 3 ITA NO. 2180/PN/2013, A.Y. 2010-11 ITA NO. 1336/PN/2011 IN THE CASE OF ITO VS. NIPHARD NAGA RI SAHAKARI PATSANSTHA LTD. DECIDED ON 31-07-2013. IN THE SAID CAS E THE CO- ORDINATE BENCH AFTER CONSIDERING THE RATIO LAID DOWN BY TH E HONBLE SUPREME COURT OF INDIA IN THE CASE OF TOTGARS CO-OP. SALE SOCIETY LTD. VS. ITO (SUPRA) DISTINGUISHED THE SAME AND HELD THAT THE A SSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S. 80P(2)(A)(I) ON THE INTEREST INCOME. 4. ON THE OTHER HAND SHRI M.M. CHATE REPRESENTING THE D EPARTMENT STRONGLY SUPPORTED THE IMPUGNED ORDER. THE LD. DR CON TENDED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS RIGHTLY FOLLOWED THE JUDGMENT OF THE HONBLE SUPREME COURT OF INDIA RENDERED IN THE CA SE OF TOTGARS CO-OP. SALE SOCIETY LTD. VS. ITO (SUPRA). THE LD. DR REITERA TED THE REASONS CITED BY THE ASSESSING OFFICER AND THE COMMISSIONE R OF INCOME TAX (APPEALS) IN REJECTING THE CLAIM OF ASSESSEE. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIE S BELOW. WE HAVE ALSO EXAMINED THE DECISIONS ON WHICH BOTH THE SIDES HAVE PLACED RELIANCE. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE IS C O-OPERATIVE CREDIT SOCIETY. IT IS ALSO NOT DISPUTED THAT THE ASSESS EE HAS EARNED INTEREST INCOME OF RS.29,28,361/- FROM THE DEPOSITS WITH NAT IONALIZED BANK. WE FIND THAT THE ISSUE RAISED IN THE PRESENT APPEAL IS SIM ILAR TO THE ONE ADJUDICATED BY THE CO-ORDINATE BENCH OF THE TRIBUNA L IN THE CASE OF ITO VS. NIPHARD NAGARI SAHAKARI PATSANSTHA LTD. (SUPRA). I N THE SAID CASE THE TRIBUNAL HAS CONSIDERED THE JUDGMENT OF THE HO NBLE SUPREME COURT OF INDIA RENDERED IN THE CASE OF TOTGARS CO-OP. SALE SOCIETY LTD. VS. ITO (SUPRA), AND HAS DISTINGUISHED THE SAME, ON FACTS. THE RELEVANT EXTRACT OF THE ORDER OF THE CO-ORDINATE BENCH OF THE TR IBUNAL IN THE AFORESAID CASE IS REPRODUCED HERE-IN-BELOW: 4 ITA NO. 2180/PN/2013, A.Y. 2010-11 11. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER A ND 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 INSTANT CASE THERE IS NO DISPUTE TO THE FACT THAT THE ASSESSEE I S A COOPERATIVE SOCIETY ENGAGED IN THE BUSINESS ACTIVITY OF CREDIT COOPE RATIVE SOCIETY, I.E. PROVIDING CREDIT FACILITY TO ITS MEMBERS. ACCORDING TO THE REVENUE THE INCOME OF THE SOCIETY ON ACCOUNT OF INT EREST FROM BANKS OTHER THAN COOPERATIVE BANKS, INTEREST ON MUTUAL FUNDS , LONG TERM AND SHORT TERM CAPITAL GAIN ON SALE OF MUTUAL FUNDS ETC . ARE NOT COVERED BY THE ACTIVITY OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS AND HENCE NOT ELIGIBLE FOR DEDUCTION U/S.80P(2)(A)(I) OF THE INCOME TAX ACT IN VIEW OF THE DECISION OF HONBLE SUPREME CO URT IN THE CASE OF TOTAGARS COOPERATIVE SALE SOCIETY LTD. (SUPRA). WE FIND THE LD. CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S.80P(2)(A)(I) ON ACCOUNT OF INTEREST FROM BANKS OTHER THAN COOPERATIVE BANKS, IN TEREST ON MUTUAL FUNDS LONG 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 PRESENT CASE SINCE IN THAT CASE TH E AMOUNT INVESTED IN SHORT TERM DEPOSITS AND SECURITIES WAS NOT OUT OF INTEREST BEARING DEPOSITS COLLECTED FROM MEMBERS BUT OUT OF SALE PROCEE DS OF AGRICULTURAL PRODUCE OF FARMER MEMBERS MARKETED BY T HE SOCIETY. FURTHER, THE HONBLE APEX COURT HAS CONSIDERED ONLY TH E LATTER PART OF SECTION 80P(2)(A)(I), I.E. INCOME OF A COOPERATIVE SOCIETY ENGAGED IN PROVIDING CREDIT FACILITIES TO ITS MEMBERS IS ELIGIBLE F OR DEDUCTION AND HAS NOT CONSIDERED THE EARLIER PART OF SECTION 80P(2 )(A)(I), I.E. INCOME OF A COOPERATIVE SOCIETY ENGAGED IN CARRYING ON THE BUSINESS OF BANKING IS ELIGIBLE FOR DEDUCTION. 11.1 WE FIND THE AHMEDABAD BENCH OF THE TRIBUNAL IN T HE CASE OF M/S. JAFARI MOMIN VIKAS COOPERATIVE CREDIT SOCIETY L TD. (SUPRA) AFTER CONSIDERING THE DECISION OF HONBLE SUPREME COU RT IN THE CASE OF TOTAGARS COOPERATIVE SALE SOCIETY LTD. (SUPRA) HAS OBSERVED AS UNDER : 17. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE EITHER PARTY, PERUSED THE RELEVANT RECORDS AND ALSO THE CA SE LAW ON WHICH THE LEARNED AR HAD RESERVATION IN ITS APPLICABLY I N THE CIRCUMSTANCES OF THE ASSESSEE'S CASE. 5 ITA NO. 2180/PN/2013, A.Y. 2010-11 18. IT WAS THE STAND OF THE LEARNED CIT (A) THAT T HE ENTIRE INCOME WAS NOT EXEMPT AND THAT IT WAS TO BE EXAMINED AS TO WHETHER THERE WAS ANY INTEREST INCOME ON THE SHORT TERM BANK DEPO SITS AND SECURITIES INCLUDED IN THE TOTAL INCOME OF THIS SOC IETY 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'B LE SUPREME COURT IN THE CASE OF TOTGARS CO-OP. SALE SOCIETY LT D V. ITO (SUPRA). THE ISSUE BEFORE THE HON'BLE COURT FOR DETERMINATIO N WAS WHETHER INTEREST INCOME ON SHORT TERM BANK DEPOSITS AND SEC URITIES WOULD BE QUALIFIED AS BUSINESS INCOME U/S 80P (2)(A)(I) O F THE ACT. 19. THE ISSUE DEALT WITH BY THE HON'BLE SUPREME CO URT 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 TRE ATMENT OF SUCH AMOUNT. SINCE THE FUND CREATED BY SUCH BY SUCH RETENTION WAS NOT REQUIRED IMMEDIATELY FOR BUSINESS PURPOSES, IT WAS INVESTED IN SPECIFIED SECURITIES. THE QUESTION, BEFORE US, IS-WHETHER INTEREST ON SUCH DEPOSITS/SECURITIES, WHICH STRICTLY SPEAKING ACCRUE S TO THE MEMBERS' ACCOUNT, COULD BE TAXED AS BUSINESS INCOME UNDER SECTION 28 OF THE ACT? IN OUR VIEW, SUCH INTEREST I NCOME WOULD COME IN THE CATEGORY OF 'INCOME FROM OTHER SO URCES', HENCE, SUCH INTEREST INCOME WOULD BE TAXABLE UNDER SECTION 56 OF THE ACT, AS RIGHTLY HELD BY THE ASSESSING OFF ICER...' 19.1 HOWEVER, IN THE PRESENT CASE, ON VERIFICATION OF THE BALANCE SHEET OF THE ASSESSEE AS ON 31.3.2009, IT WAS OBSER VED THAT THE FIXED DEPOSITS MADE WERE TO MAINTAIN 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 S UPREME 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 LIA BLE TO BE TAXED UNDER SECTION 28 AND NOT UNDER SECTION 56 OF THE 6 ITA NO. 2180/PN/2013, A.Y. 2010-11 ACT AND, CONSEQUENTLY, THE ASSESSEE(S) WAS ENTITLED TO DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT. TH E ARGUMENT WAS REJECTED BY THE ASSESSING OFFICER AS ALSO BY TH E TRIBUNAL AND THE HIGH COURT, HENCE, THESE CIVIL APPEALS HAVE BEEN 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 MEMBERS; (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 ENTIRE 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 P RESENT ASSESSEE WITH THAT ASSESSEE (BEFORE THE SUPREME COURT), THE FOLLOWING CLINCHING DISSIMILARITIES EMERGE, NAMELY: (1) IN THE CASE OF THE ASSESSEE, THE ENTIRE FUNDS WERE UTILIZED FOR THE PURPOSES OF BUSINESS AND THAT THER E 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 CA RRY OUT ANY ACTIVITY EXCEPT IN PROVIDING CREDIT FACILITIES TO ITS MEMBERS AND THAT THE FUNDS WERE OF OPERATIONAL FUND S. THE ONLY FUND AVAILABLE WITH THE ASSESSEE WAS DEPOSITS FROM ITS MEMBERS AND, THUS, THERE WAS NO SURPLUS FUNDS AS SU CH; 7 ITA NO. 2180/PN/2013, A.Y. 2010-11 - IN THE CASE OF TOTGARS, THE HON'BLE SUPREME COURT HAD NOT SPELT OUT ANYTHING WITH REGARD TO OPERATION AL FUNDS; 19.5 CONSIDERING THE ABOVE FACTS, WE FIND THAT THE RE IS FORCE IN THE ARGUMENT OF THE ASSESSEE THAT THE ASSESSEE NOT A CO -OPERATIVE BANK, BUT ITS NATURE OF BUSINESS WAS COUPLED WITH B ANKING WITH ITS MEMBERS, AS IT ACCEPTS DEPOSITS FROM AND LENDS THE SAME TO ITS MEMBERS. TO MEET ANY EVENTUALITY, THE ASSESSEE WAS REQUIRED TO MAINTAIN SOME LIQUID FUNDS. THAT WAS WHY, IT WAS SU BMITTED BY THE ASSESSEE THAT IT HAD INVESTED IN SHORT-TERM DEPOSIT S. FURTHERMORE, THE ASSESSEE HAD MAINTAINED OVERDRAFT FACILITY WITH DENA BANK AND THE BALANCE AS AT 31.3.2009 WAS RS.13,69,955/- [SOU RCE: BALANCE SHEET OF THE ASSESSEE AVAILABLE ON RECORD] 19.6 IN OVERALL CONSIDERATION OF ALL THE ASPECTS, WE ARE OF THE CONSIDERED VIEW THAT THE RATIO LAID DOWN BY THE HON 'BLE SUPREME COURT IN THE CASE OF TOTGARS CO-OP SALE SOCIETY LTD (SUPRA) CANNOT IN ANY WAY COME TO THE RESCUE OF EITHER 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 JUSTIFIED IN 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 ACCORDINGLY. 19.7 BEFORE PARTING WITH, WE WOULD, WITH DUE REGAR DS, 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 VIE W WHILE DECIDING THE ISSUE. 11.2 WE FIND THE COCHIN BENCH OF THE TRIBUNAL IN THE CASE OF MUTTOM SERVICE COOPERATIVE APLAPPUZHA BANK LTD. VS. I TO (SUPRA) AFTER CONSIDERING THE DECISION OF HONBLE SUPREME COU RT IN 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 EIT HER SIDE AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE H AVE ALSO CAREFULLY GONE THROUGH THE ORDER OF THE LOWER AUTHO RITY. NO DOUBT, THE LATEST JUDGMENT IN TOTGAR'S CO-OPERATIVE SALE S OCIETY LTD VS ITO (SUPRA), THE APEX COURT FOUND THAT THE DEPOSIT OF S URPLUS FUNDS BY THE CO-OPERATIVE SOCIETY IS NOT ELIGIBLE FOR DEDUCT ION U/S 80P(2). IN THE CASE BEFORE THE APEX COURT IN TOTGAR'S CO-OPERA TIVE SALE SOCIETY LTD VS ITO (SUPRA), THE ASSESSEE CO-OPERATIVE SOCIE TY WAS TO PROVIDE 8 ITA NO. 2180/PN/2013, A.Y. 2010-11 CREDIT FACILITY TO ITS MEMBERS AND MARKET THE AGRIC ULTURAL PRODUCE. THE ASSESSEE IS NOT IN THE BUSINESS OF BANKING. THE REFORE, 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 WHOSE BUSINESS IS BANKING. ADMITTEDLY, THE ASSESSEE HAS INVESTED FUNDS IN STAT E PROMOTED TREASURY SMALL SAVINGS FIXED DEPOSIT SCHEME. SINCE GOVERNMENT OF INDIA HAS WITHDRAWN INDIA VIKAS PATRA, AS A SMALL S AVINGS INSTRUMENT, FUNDS INVESTED AT THE DISCRETION OF THE BANK IS ONE OF THE ACTIVITIES OF THE BANKING AS PER THE BANKING RE GULATION ACT. SINCE THE ASSESSEE CO-OPERATIVE SOCIETY IS IN THE B USINESS OF BANKING THE INVESTMENT IN THE STATE PROMOTED TREASU RY SMALL SAVINGS FIXED DEPOSIT CERTIFICATE SCHEME IS A BANKI NG ACTIVITY, THEREFORE, THE INTEREST ACCRUED ON SUCH INVESTMENT HAS TO BE TREATED AS BUSINESS INCOME IN THE COURSE OF ITS BANKING ACT IVITY. ONCE IT IS A BUSINESS INCOME, THE ASSESSEE IS ENTITLED FOR DEDUC TION 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 TH E FACTS OF THIS CASE. BY RESPECTFULLY FOLLOWING THE JUDGMENT OF THE APEX COURT IN KARNATAKA STATE CO-OPERATIVE BANK (SUPRA), THE ORDE R OF THE COMMISSIONER OF INCOME-TAX(A) IS UPHELD. 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 B Y THE REGISTRAR OF COOPERATIVE SOCIETIES FOR ACCEPTING DEPOSITS AND LEN DING 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 SOC IETY. WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE CASE O F MAHAVIR NAGARI SAHAKARI PAT SANSTHA LTD. REPORTED IN 74 TTJ 7 93 (PUNE) HAS HELD THAT THE CREDIT SOCIETY WHICH IS CARRYING ON THE BUSINESS OF BANKING ACTIVITY AND PROVIDING CREDIT FACILITY TO ITS M EMBERS IS ELIGIBLE FOR DEDUCTION U/S.80P(2)(A)(I). IN VIEW OF TH E ABOVE DISCUSSION AND FOLLOWING THE DECISIONS OF THE AHMEDABA D BENCH OF THE TRIBUNAL AND COCHIN BENCH OF THE TRIBUNAL WHICH IN TURN HAVE CONSIDERED THE DECISION OF THE HONBLE SUPREME COURT I N THE CASE OF TOTAGARS COOPERATIVE SALE SOCIETY LTD. (SUPRA) WE FIN D NO INFIRMITY IN THE ORDER OF THE LD.CIT(A). ACCORDINGLY, THE SAME I S UPHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 9 ITA NO. 2180/PN/2013, A.Y. 2010-11 6. THE STAND OF THE ASSESSEE RIGHT THROUGH HAS BEEN T HAT THE SOCIETY IS NOT ENGAGED IN ANY OTHER ACTIVITY EXCEPT RECEIVING DEP OSITS FROM ITS MEMBERS AND PROVIDING CREDIT FACILITIES TO ITS MEMBERS. TH E ASSESSEE HAS MADE DEPOSITS WITH NATIONALIZED BANKS IN ORDER TO MAIN TAIN LIQUIDITY AND PROVIDE READY AVAILABILITY OF FUNDS FOR REPAYMENT OF DEPO SITS ON REDEMPTION/MATURITY. THESE FACTS HAVE NOT BEEN REFUTED BY THE DEPARTMENT. SINCE, THE ISSUE RAISED IN THE APPEAL IS IDENTIC AL TO THE ONE ALREADY ADJUDICATED BY THE CO-ORDINATE BENCH OF THE TRIB UNAL, WE RESPECTFULLY FOLLOW THE SAME RATIO. THUS, WE HOLD THAT THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCT ION U/S. 80P(2)(A)(I). IN VIEW OF THE ABOVE, THE IMPUGNED ORDER IS SET ASIDE AND THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON WEDNESDAY, THE 13 TH DAY OF MAY, 2015 AT PUNE SD/- SD/- (R.K. PANDA) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 13 TH MAY, 2015 RK/PS COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) , KOLHAPUR 4 THE CIT - I /II, KOLHAPUR 5 6 THE DR, ITAT, B BENCH, PUNE. GUARD FILE. //TRUE COPY// BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, PUNE