ACIT, Circle-33, Kolkata, Kolkata V. Central Bank of India Employees Cooperative Society Limited, Kolkata

ITA 2203/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1425 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 17-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: GAUTAM B ANERJEE; S BHATACHARJEE
• Keywords: Business income; Rule of consistency; Question of law
• Section: 56

Judgement Text

ITA NO.2203/K/2016 CENTRAL BANK OF INDIA EMPLOYEES COOP SOCIETY LTD. A.Y.2013-14 1 IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA [BEFORE HONBLE SRI.N.V.VASUDEVAN, JM & S RI.WASEEM AHMED AM] I.T.A.NO.2203KOL/16 ASSESSMENT YEARS : 2013-14 A.C.I.T., CIRCLE-33, KOLKATA, -VS.- M/S.CENT RAL BANK OF INDIA EMPLOYEES CO-OPERATIVE SOCIETY LTD. KOLKATA 10, NELLIE SENGUPTA SARANI,KOLKATA-87 [PAN : AAAAC 3869 N] (APPELLANT) (RESPONDENT) FOR THE DEPARTMENT : SHRI S.DASGUPTA, ADDL.CIT S R.DR. FOR THE ASSESSEE :SHRI S.BHATACHARJEE, FCA & GAUTAM BANERJEE, ADVOCATE DATE OF HEARING : 13.02.2018. DATE OF PRONOUNCEMENT : 01.03.2018. ORDER PER N.V.VASUDEVAN, JM THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 30.9.2016 OF CIT(A)- 9, KOLKATA, RELATING TO AY 2013-14. 2. THE GROUNDS OF APPEAL RAISED BY THE REVENUE RE ADS AS FOLLOWS: 1 . THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A)-9, KOLKATA ERRED IN LAW BY ALLOWING DEDUCTION U1S.80P(2)(A)(I) AND 80P(2)(D) OF THE ACT TO THE ASSESSEE FOR WHICH IT WAS NOT ENTITLED UNDER TH E SAID SECTION. 2. THAT IN THE FACT AND CIRCUMSTANCES OF THE CASE T HE LD. CIT(A)-9, KOLKATA IS NOT CORRECT IN ALLOWING THE DEDUCTIONS U/S.80P(2)(A)(I) OF THE INCOME TAX ACT. 3. THAT IN THE FACT AND CIRCUMSTANCES OF THE CASE T HE LD. CIT(A)-9, KOLKATA FAILED TO APPRECIATE THE FACTS AND CAME TO THE WRONG CONCL USION THAT THE MONEY EARNED BY THE ASSESSEE FROM DEPOSITS FALL WITHIN THE MEANI NG OF 'PROFIT AND GAINS OF BUSINESS' WHEREAS THE INTEREST EARNED ON SUCH INVES TMENT FALLS WITHIN THE CATEGORY OF INCOME FROM OTHER SOURCE. 4. THE LD. CIT(APPEALS) FAILED TO FULLY APPRECIATE AND TAKE FULL COGNIZANCE OF ALL THE MATERIAL FACTS OF THE ORDER WHILE GIVING RELIEF TO THE ASSESSEE IN RESPECT OF SECTION U/S.80P(2)(A)(I) OF THE INCOME TAX ACT. ITA NO.2203/K/2016 CENTRAL BANK OF INDIA EMPLOYEES COOP SOCIETY LTD. A.Y.2013-14 2 5. ANY OTHER GROUND OF APPELLANT CRAVES LEAVE TO SU BMIT ON OR BEFORE THE HEARING OF THE APPEAL. 3. THE ISSUE INVOLVED IN THIS APPEAL BY THE REVENU E IS AS TO WHETHER THE CIT(A) WAS JUSTIFIED IN ALLOWING DEDUCTION U/S.80P(2)(A)(I) OF THE INCOME TAX ACT, 1961 (ACT) ON INTEREST INCOME EARNED ON FIXED DEPOSITS. THE ASSES SEE IS A CO-OPERATIVE SOCIETY OF THE EMPLOYEES OF CENTRAL BANK OF INDIA. IT PROVIDE S LOAN TO ITS MEMBERS AND EARNS INTEREST ON THEM. IN ADDITION TO THE LOAN PROVIDED TO THE EMPLOYEES OF THE CENTRAL BANK OF INDIA WHO ARE ITS MEMBERS THE ASSESSEE HAD ALSO MADE INVESTMENTS IN FIXED DEPOSITS WITH BANKS AND OTHER CO-OPERATIVE SOCIETIE S AND EARNED INTEREST INCOME THEREON. THE ASSESSEE CLAIMED DEDUCTION U/S.80P(2) (A)(I) OF THE ACT IN RESPECT OF THE INTEREST SO RECEIVED. THE RELEVANT PROVISIONS OF S EC.80P(2)(A)(I) OF THE ACT READS THUS: DEDUCTION IN RESPECT OF INCOME OF CO-OPERATIVE SOC IETIES. 80P. (1) WHERE, IN THE CASE OF AN ASSESSEE BEING A CO-O PERATIVE SOCIETY, THE GROSS TOTAL INCOME INCLUDES ANY INCOME REFERRED TO IN SUB-SECTION (2), THERE SHALL BE DEDUCTED, IN ACCORDANCE WITH AND SUBJECT T O 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 B E THE FOLLOWING, NAMELY : ( A ) IN THE CASE OF A CO-OPERATIVE SOCIETY ENGAGED IN ( I ) CARRYING ON THE BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS, OR ( II ) A COTTAGE INDUSTRY, OR ( III ) THE MARKETING OF AGRICULTURAL PRODUCE GROWN BY I TS MEMBERS, OR ( IV ) THE PURCHASE OF AGRICULTURAL IMPLEMENTS, SEEDS, LIVESTOCK OR OTHER ARTICLES INTENDED FOR AGRICULTURE FOR THE PURPOSE O F SUPPLYING THEM TO ITS MEMBERS, OR ( V ) THE PROCESSING, WITHOUT THE AID OF POWER, OF THE AGRICULTURAL PRODUCE OF ITS MEMBERS, OR ( VI ) THE COLLECTIVE DISPOSAL OF THE LABOUR OF ITS MEM BERS, OR ( VII ) FISHING OR ALLIED ACTIVITIES, THAT IS TO SAY, THE CATCHING, CURING, PROCESSING, PRESERVING, STORING OR MARKETING OF FIS H OR THE PURCHASE OF MATERIALS AND EQUIPMENT IN CONNECTION THEREWITH FOR THE PURPOSE OF SUPPLYING THEM TO ITS MEMBERS, THE WHOLE OF THE AMOUNT OF PROFITS AND GAINS OF BUS INESS ATTRIBUTABLE TO ANY ONE OR MORE OF SUCH ACTIVITIES : ITA NO.2203/K/2016 CENTRAL BANK OF INDIA EMPLOYEES COOP SOCIETY LTD. A.Y.2013-14 3 4. THE AO WAS OF THE VIEW THAT AS PER THE DECISION RENDERED BY THE HONBLE SUPREME COURT IN THE CASE OF TOTGARS CO-OPERATIVE SALE SOC IETY LTD VS ITO 322 ITR 283 (SC) INTEREST EARNED ON DEPOSITS HAD TO BE REGARDED AS I NCOME UNDER THE HEAD INCOME FROM OTHER SOURCES AND THEREFORE DEDUCTION U/S 80P(2)(A )(I) OF THE ACT CANNOT BE ALLOWED TO THE ASSESSEE AS ONLY THE WHOLE OF THE AMOUNT OF PROFITS AND GAINS OF BUS INESS ATTRIBUTABLE TO CARRYING ON THE BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS IS ALLOWED AS DEDUCTION UNDER THE SAID PROVISION. ACCORDING TO THE AO THE AFORESAID INCOME IS NOT DERIVED FROM THE BUSINESS O F PROVIDING CREDIT FACILITY TO ITS MEMBERS. APPLYING THE DECISION IN THE CASE OF TOTG ARS CO-OPERATIVE SALE SOCIETY LTD VS ITO (SUPRA), THE AO TREATED THE INTEREST INC OME AS INCOME FROM OTHER SOURCES AND ACCORDINGLY DENIED THE BENEFIT OF DEDUCTION U/S 80P(2)(A)(I) OF THE ACT. 5. AGGRIEVED BY THE ORDERS OF AO, THE ASSESSEE PRE FERRED APPEAL BEFORE CIT(A). THE CIT(A) HELD THAT INTEREST INCOME HAD TO BE ASSESSED UNDER THE HEAD INCOME FROM BUSINESS AND THAT THE THE ASSESSEE WAS ENTITLED TO DEDUCTION U/S.80P(2)(A)(I) OF THE ACT ON THE INTEREST INCOME IN QUESTION. IN DOING SO, H E FOLLOWED HIS OWN ORDER IN ASSESSEES OWN CASE IN AY 2012-13 WHEREIN HE HAD AL LOWED SIMILAR CLAIM OF THE ASSESSEE. 6. AGGRIEVED BY THE ORDER OF THE CIT(A), THE REVEN UE IS IN APPEAL BEFORE THE TRIBUNAL. AT THE TIME OF HEARING IT WAS BROUGHT TO OUR NOTICE THAT THIS TRIBUNAL IN ASSESSEES OWN CASE ADJUDICATED IDENTICAL ISSUE IN I.T.ANOS.158 & 1808 TO 1809/KOL/14 & ITA 1126/KOL/15 FOR ASSESSMENT YEARS : 2009-10 TO 2012- 13 BY ORDER DATED 9.11.2016. THE TRIBUNAL HELD ON IDENTICAL ISSUE ON IDENTICAL F ACTS AS FOLLOWS: 11. WE HAVE GIVEN A VERY CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS. SINCE THE REVENUE HAS LAID MUCH EMPHASIS ON THE DEC ISION OF THE HONBLE SUPREME COURT IN THE CASE OF TOTAGARS CO-OPERATIVE SOCIEITY 322 ITR 283 (SC), WE DEEM IT NECESSARY TO DEAL WITH THIS CONTEN TION. 12. THIS TRIBUNAL HAD AN OCCASION TO DEAL WITH SIM ILAR OBJECTIONS IN THE CASE OF ANOTHER CO-OPERATIVE SOCIETY SIMILAR TO THE ASSESSE E IN THE PRESENT APPEALS. IN ITA NO.07/KOL/2014 FOR ASSESSMENT YEAR : 2009-10 IN THE CASE OF RUPNARAYANPUR SAMABAY KRISHIUNNAYAN SAMITY LTD. VS. A.C.I.T., CIRCLE-1, HOOGHLY, THE ASSESSEE WAS AN IS AN AGRICULTURAL CRE DIT SOCIETY DULY REGISTERED UNDER THE WEST BENGAL COOPERATIVE SOCIETIES ACT, 19 83. IN THE COURSE OF PROCEEDINGS BEFORE CIT(A), THE CIT(A) NOTICED THAT THE ASSESSEE HAD CLAIMED DEDUCTION U/S 80P(2(A) (I) OF THE ACT ON INTEREST I NCOME ARISING FROM SAVINGS ITA NO.2203/K/2016 CENTRAL BANK OF INDIA EMPLOYEES COOP SOCIETY LTD. A.Y.2013-14 4 BANK A/C. AND RECURRING DEPOSIT(RD) ACCOUNT WHICH W AS MADE BY THE ASSESSEE FROM AND OUT OF THE RD ACCOUNT MADE BY ITS MEMBERS WITH THE ASSESSEE. THE REVENUE TOOK THE VIEW THAT AS PER TH E DECISION RENDERED BY THE HONBLE SUPREME COURT IN THE CASE OF TOTGARS CO-OP ERATIVE SALE SOCIETY LTD VS ITO 322 ITR 283 (SC) INTEREST EARNED ON DEPOSITS HAD TO BE REGARDED AS INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES A ND THEREFORE DEDUCTION U/S 80P(2)(A)(I) OF THE ACT OUGHT NOT TO HAVE ALLOWED T O THE ASSESSEE AS ONLY THE WHOLE OF THE AMOUNT OF PROFITS AND GAINS OF BUSINES S ATTRIBUTABLE TO CARRYING ON THE BUSINESS OF BANKING OR PROVIDING CREDIT FACILIT IES TO ITS MEMBERS IS ALLOWED AS DEDUCTION UNDER THE SAID PROVISION. ON FURTHER A PPEAL BY THE ASSESSEE BEFORE THE TRIBUNAL, THE TRIBUNAL HELD AS FOLLOWS: 6. AT THE TIME OF HEARING OF THIS APPEAL THE LD. C OUNSEL FOR THE ASSESSEE FILED BEFORE ME A COPY OF THE DECISION REN DERED BY ITAT, KOLKATA BENCH IN THE CASE OF S.E., S.E.C. & E.CO. R AILWAYS EMPLOYEESCO-OPERATIVE CREDIT SOCIETY LTD. VS ACIT IN ITA NO.1693/KOL/2012 ORDER DATED 30.10.2014. IN THE AFO RESAID CASE THE IDENTICAL QUESTION AS TO WHETHER INTEREST INCOME HA D TO BE REGARDED AS INCOME FROM BUSINESS OR INCOME FROM OTHER SOURCES H AD COME UP FOR CONSIDERATION. THE ASSESSEE IN THE AFORESAID DECISI ON ACCEPTED LOANS AND DEPOSITS FROM ITS MEMBERS AND UTILIZED THE SAME TOW ARDS PROVIDING LOANS AND CREDIT FACILITIES TO ITS MEMBERS. HOWEVE R EXCESS FUNDS WERE UTILIZED IN MAKING DEPOSITS IN BANKS AND INVESTMENT S. THE TRIBUNAL RELYING UPON THE DECISION RENDERED BY THE HONBLE C ALCUTTA HIGH COURT IN THE CASE OF CIT VS SOUTH EASTERN RAILWAY EMPLOYE ES CO-OPERATIVE CREDIT SOCIETY IN G.A.NO.1838 OF 2010 DATED 22.07.2 010 CAME TO THE CONCLUSION THAT INTEREST INCOME HAS TO BE REGARDED AS INCOME FROM BUSINESS OF BANKING AND IS ENTITLED FOR DEDUCTION U /S 80P(2)(A)(I) OF THE ACT. THE TRIBUNAL HAD ALSO DISTINGUISHED THE DECISI ON RENDERED BY THE HONBLE SUPREME COURT IN THE CASE OF TOTGARS CO-O PERATIVE SALE SOCIETY LTD VS ITO (SUPRA). THE FOLLOWING OBSERVATI ONS OF THE HONBLE TRIBUNAL READ AS UNDER :- 7.1. WE FURTHER FIND THAT THE ISSUE INVOLVED IS CO VERED IN FAVOUR OF THE ASSESEE BY CATENA OF DECISIONS OF THE TRIBUNAL IN ASSESSEES OWN CASE. THESE DECISIONS AR E ALSO AFFIRMED BY THE HONBLE JURISDICTIONAL HIGH COURT I N ITS ORDER FOR A.YR.2005-06. IN THIS ORDER THE HONBLE JURISDICTIONAL HIGH COURT HAS CONSIDERED ALL THE RE LEVANT ORDERS AND HAS DECIDED THE ISSUE IN FAVOUR OF THE A SSESSEE. WE MAY GAINFULLY REPRODUCE THE OPERATIVE ORDER OF T HE JURISDICTIONAL HIGH COURT WHICH IS AS UNDER :- WE HAVE GONE THROUGH THE IMPUGNED JUDGMENT AND ORDER OF THE LEARNED TRIBUNAL. IT APPEARS THAT THE POINT INVOLVED .IS WHETHER INTEREST EARNED OUT OF THE INVESTMENT EARNED BY THE ASSESSEE COOPERATIVE ITA NO.2203/K/2016 CENTRAL BANK OF INDIA EMPLOYEES COOP SOCIETY LTD. A.Y.2013-14 5 CAN BE TREATED TO BE THE INCOME ARISING OUT OF BUSINESS ACTIVITY OR FROM OTHER SOURCES IN ORDER TO APPLY THE PROVISION OF SECTION 80P(2)(A)(I) OF THE I.T.ACT. IT IS AN UNDISPUTED FACTUAL POSITION THAT SIMILAR ISSUE AROSE BEFORE THE COMMISSIONER OF INCOME TAX (APPEAL) IN RELATION TO THE ASSESSMENT YEAR 1998-99 TO 2002-2003 AS ALSO FOR THE ASSESSMENT YEAR 1995-96 AND 1996-97. THEN AGAIN IN RELATION TO THE ASSESSMENT YEARS 2003-04 AND 2004-05 A SIMILAR POINT AROSE. THE LEARNED TRIBUNAL IN RELATION TO THE ASSESSMENT YEARS 1998- 99 TO 2002-2003 BY ORDER DATED 10.11.2006 IN ITA NOS. 840 TO 844/KOL/2006 AND AGAIN BY ORDER DATED 29.12.2006 IN RELATION TO ASSESSMENT YEARS 2003-04 AND 2004-05 HAS DELETED THE DISALLOWANCE MADE IN THOSE ASSESSMENT YEARS AND IT WAS HELD THAT THE INTEREST EARNED BY THE ASSESSEE COOPERATIVE SOCIETY FROM ITS SHORT TERM AND FIXED DEPOSITS WITH THE BAN S AND OTHER INSTITUTIONS WERE DISALLOWED ON THE GROUND THAT THIS INCOME WAS NOT BUSINESS PROFIT OF THE ASSESSEE SOCIETY BUT WAS INCOME FROM OTHER SOURCES. THE LD.TRIBUNAL HAS ALSO HELD THAT INCOME FROM INVESTMENT IN BANKS AND OTHER FINANCIAL INSTITUTIONS IS THE BUSINESS INCOME OF THE ASSESSEE SOCIETY AND IT IS ELIGIBLE TO GET DEDUCTION UNDER SECTION 80P(2)(A)(I). THE TRIBUNAL HAS OVERRULED THE DECISIONS RENDERED AGAINST THE ASSESSEE IN RELATION TO ASSESSMENT YEARS 1995-96 AND 1996-97 ON THE SAME ISSUE IN RELATION TO SUBSEQUENT YEARS. IT WAS FOUND BY THE TRIBUNAL WHILE AFFIRMING THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL) THAT THERE IS NO CHANGE IN THE FACTS AND CIRCUMSTANCES OF THIS CASE AND IT WAS HELD THAT THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION UNDER SECTION 80P(2)(A)(I) ON INTEREST ON INVESTMENT AMOUNTING TO RS.1,18,07,645/- IN THIS ASSESSMENT YEAR ALSO. SINC E THE TRIBUNAL FOUND THAT THIS DECISION OF THE TRIBUN AL WAS FOLLOWED BY CIT(A) THERE IS NO REASON TO TAKE A DIFFERENT VIEW. UNDER THESE CIRCUMSTANCES, WE FEEL THAT WHEN THE COMMISSIONER OF INCOME TAX (A) AS WELL AS THE TRIBUNAL HAS FOLLOWED THE EARLIER UNCHALLENGED DECISION NO QUESTION OF LAW IS INVOLVED IN THIS MATTER. NOTHING HAS BEEN PRODUCED BEFORE US TO ITA NO.2203/K/2016 CENTRAL BANK OF INDIA EMPLOYEES COOP SOCIETY LTD. A.Y.2013-14 6 SHOW SUBSEQUENT DECISION OF THE TRIBUNAL IN RELATION TO THE ASSESSMENT YEARS 1998-99 TO 2002- 03 AND 2003-04 HAVE BEEN CHALLENGED BY ANY OF THE PARTIES BEFORE THIS COURT. IT IS SUBMITTED BY MR.BHOWMICK THAT THERE HAS BEEN CHALLENGE OF THE DECISION IN RELATION TO ASSESSMENT YEARS 1995-96, 1996-97 AND THE SAME IS PENDING BEFORE THIS COURT WE THINK THAT CHALLENGE OF THE ASSESSEE HAS NOW BECOME REDUNDANT AS THE EARLIER VIEW TAKEN IN BOTH THE ASSESSMENT YEARS HAVE BEEN REVERSED BY THE TRIBUNAL BY ITS SUBSEQUENT DECISION. HENCE, THE PENDENCY OF THAT EARLIER MATTER IS OF NO CONSEQUENCE IN THIS MATTER. HAD THERE BEEN A CHALLENGE OF THE DECISION OF THE TRIBUNAL IN RELATION TO THE ASSESSMENT YEARS 1998- 99 TO 2002-03 AND ALSO 2003-04 TO 2004-05 THE MATTER WOULD HAVE BEEN DIFFERENT. THE REVENUE DID NOT TAKE ANY STEP WHATSOEVER. THEREFORE, WE PRESUME THE REVENUE HAS ACCEPTED THE SUBSEQUENT VIEW OF THE TRIBUNAL AND THE SAME NOW HOLD THE FIELD RIGHT NOW. 7.2. CONSIDERING THE ABOVE WE FIND THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE D ECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN ASSESSE ES OWN CASE. IN THIS REGARD WE WOULD LIKE TO PLACE REL IANCE UPON THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF CIT VS EXCEL INDUSTRIES 358 ITR 295 WHEREIN THE PRINCIPLE OF CONSISTENCY HAS BEEN REITERATED. HENCE WHEN THE ISSUE HAS BEEN DECIDED BY THE JURISDICTIONAL HI GH COURT NO CONVINCING REASON HAS BEEN POINTED TO TAKE A DIFFERENT VIEW, ANY DEVIATION IS NOT PERMITTED. 7.3. NOW WE COME TO THE CASE LAWS RELIED UPON BY TH E LD. CIT(A). AS REGARDS THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF TOTGARS CO-OPERATIVE SALE SOCI ETY LTD. (SUPRA) WE FIND THAT THE SAID DECISION IS NOT APPLICABLE IN THE FACTS OF THE CASE. WE FIND THAT T HE HONBLE APEX COURT IN THE SAID DECISION IN PARA 11 HAS ITSELF MENTIONED THAT WE ARE CONFINING THE JUDGMEN T TO THE FACTS OF THE PRESENT CASE.. THE FACTS OF THE C ASE WERE THAT ASSESSEES BUSINESS WAS TO PROVIDE CREDIT FACI LITIES TO ITS MEMBERS AND TO MARKET THEIR AGRICULTURAL PRODUC E. IN MANY CASES ASSESSEE RETAINED SALE PROCEEDS OF MEMBE RS WHOSE PRODUCE WAS MARKETED BY IT AND SINCE FUNDS CR EATED ITA NO.2203/K/2016 CENTRAL BANK OF INDIA EMPLOYEES COOP SOCIETY LTD. A.Y.2013-14 7 BY SUCH RETENTION WERE NOT REQUIRED IMMEDIATELY FOR BUSINESS PURPOSES, IT INVESTED SAME IN SPECIFIED SE CURITIES AND EARNED INTEREST INCOME. IN THESE CIRCUMSTANCES THE HONBLE APEX COURT HAD HELD THAT INTEREST EARNED WO ULD COME IN CATEGORY OF INCOME FROM OTHER SOURCES TAX ABLE U/S 56 OF THE ACT AND WOULD NOT QUALIFY FOR DEDUCTI ON AS BUSINESS INCOME U/S 80P(2)(A)(I). FROM THE ABOVE IT IS AMPLY EVIDENT IN THE PRESENT CASE THE ASSESSEE HAS NOT RETAINED ANY AMOUNT DUE TO ITS MEMBERS AND INSTEAD OF PAYING THE SAME HAD INVESTED THE SAME AND EARNED INTEREST. THUS THIS CASE LAW IS NOT APPLICABLE ON T HE FACTS OF THE PRESENT CASE. 7.4. AS REGARDS THE DECISION OF HONBLE PATNA HIGH COURT IN THE CASE OF BIHAR RAJYA SAHKARI BHOOMI BIK ASH CO-OP.BANK LTD. (SUPRA) THE SAME IS ALSO NOT APPLIC ABLE TO THE FACTS OF THE PRESENT CASE. IN THAT CASE THE QUE STION WAS THE TREATMENT OF INTEREST EARNED ON PROVIDENT FUND AND RENTAL INCOME AS ATTRIBUTABLE TO BANKING BUSINESS AND THIS QUALIFYING FOR DEDUCTION U/S 80P(2)(A)(I) OF THE AC T. 7.5. IN THE BACKGROUND OF THE AFORESAID DISCUSSION AND PRECEDENT WE HOLD THAT THE ISSUE IS SQUARELY COVERE D IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBU NAL AND THE JURISDICTIONAL HIGH COURT IN ASSESSEES OWN CAS E. THE DECISION RELIED UPON BY THE LD. CIT(A) ARE NOT APPL ICABLE IN THE FACTS OF THE CASE. THE PRINCIPLE OF CONSISTE NCY AS CONVEYED BY THE HONBLE APEX COURT MANDATES THAT TH E REVENUE DOES NOT TAKE A DIFFERENT STAND. ACCORDINGL Y WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND D ECIDE THE ISSUE IN FAOVUR OF THE ASSESSEE. 6.1. RESPECTFULLY FOLLOWING THE ABOVE DECISION AND TAKING DOWN THE FACT THAT INTEREST INCOME IN THE PRESENT C ASE IS IDENTICAL TO THE INTEREST INCOME RECEIVED BY THE ASSESSEE IN THE DECISION REFERRED TO ABOVE. I HOLD THAT THE ASSESSEE IS ENTI TLED TO DEDUCTION U/S 80P(2)(A)(I) OF THE ACT IN RESPECT OF THE INTER EST INCOME. 13. THE AFORESAID VIEW HAS ALSO BEEN FOLLOWED BY THE TRIBUNAL IN I.T.A.NOS.737-742/KOL/2011FOR ASSESSMENT YEARS : 19 96-97 TO 2001-02 IN THE CASE OF A.C.I.T., CIRCLE-56, -VS.-THE WEST BENGAL S TATE CO-OPERATIVE BANK LTD. 14. THE HONBLE KARNATAKA HIGH COURT HAD ALSO AN OCCASION TO EXAMINE THE SCOPE OF SEC.80P(2)(A)(I) OF THE ACT, IN THE LIGHT OF THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF TOTAGAR CO-OPERATIVE S OCIETY (SUPRA) IN THE CASE OF GUTTIGEDARAR CREDIT CO-OPERATIVE SOCIETY LTD. VS . ITO WARD 2(2), MYSORE ITA NO.2203/K/2016 CENTRAL BANK OF INDIA EMPLOYEES COOP SOCIETY LTD. A.Y.2013-14 8 377 ITR 464 (KARNATAKA). THE ASSESSEE IN THAT CASE WHICH WAS A CO-OPERATIVE SOCIETY CLAIMED DEDUCTION IN RESPECT OF INTEREST IN COME IT EARNED ON DEPOSIT OF SURPLUS FUNDS AS ELIGIBLE FOR DEDUCTION U/S.80P(2)( A)(I) OF THE ACT. THE APPELLATE AUTHORITIES UNDER THE ACT HELD THAT ASSES SEE IS LIABLE TO INCOME TAX IN VIEW OF THE JUDGMENT OF THE APEX COURT IN THE CASE OF TOTGARS CO-OPERATIVE SALE SOCIETY LTD. V. ITO 377 ITR 283 (KARN.). ON APPEAL BY THE ASSESSEE, THE HONBLE KARNATAKA HIGH COURT HELD: 9. THE WORD 'ATTRIBUTABLE' USED IN THE SAID SECTION I S OF GREAT IMPORTANCE. THE APEX COURT HAD AN OCCASION TO CONSI DER 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 113 ITR 84 (SC) (AT PAGE 93) AS UNDER: 'AS REGARDS THE ASPECT EMERGING FROM THE EXPRESSION 'ATTRIBUTABLE TO' OCCURRING IN THE PHRASE 'PROFITS AND GAINS ATTRIBUT ABLE TO THE BUSINESS OF' THE SPECIFIED INDUSTRY (HERE GENERATION AND DIS TRIBUTION OF ELECTRICITY) ON WHICH THE LEARNED SOLICITOR-GENERAL RELIED, IT WILL BE PERTINENT TO OBSERVE THAT THE LEGISLATURE HAS DELIB ERATELY USED THE EXPRESSION 'ATTRIBUTABLE TO' AND NOT THE EXPRESSION 'DERIVED FROM'. IT CANNOT BE DISPUTED THAT THE EXPRESSION 'ATTRIBUTABL E TO' IS CERTAINLY WIDER IN IMPORT THAN THE EXPRESSION 'DERIVED FROM'. HAD THE EXPRESSION 'DERIVED FROM' BEEN USED, IT COULD HAVE WITH SOME F ORCE BEEN CONTENDED THAT A BALANCING CHARGE ARISING FROM THE SALE OF OLD MACHINERY AND BUILDINGS CANNOT BE REGARDED AS PROFI TS AND GAINS DERIVED FROM THE CONDUCT OF THE BUSINESS OF GENERAT ION AND DISTRIBUTION OF ELECTRICITY. IN THIS CONNECTION, IT MAY BE POINT ED 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 SECTION 80J. I N OUR VIEW, SINCE THE EXPRESSION OF WIDER IMPORT, NAMELY, 'ATTRIBUTABLE T O', HAS BEEN USED, THE LEGISLATURE INTENDED TO COVER RECEIPTS FROM SOU RCES OTHER THAN THE ACTUAL CONDUCT OF THE BUSINESS OF GENERATION AND DI STRIBUTION OF ELECTRICITY.' 10. THEREFORE, THE WORD 'ATTRIBUTABLE TO' IS CERTAINLY WIDER IN IMPORT THAN THE EXPRESSION 'DERIVED FROM'. WHENEVER THE LE GISLATURE WANTED TO GIVE A RESTRICTED MEANING, THEY HAVE USED THE EXPRE SSION 'DERIVED FROM'. THE EXPRESSION 'ATTRIBUTABLE TO' BEING OF WI DER 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 CO-OPERATIVE SOCIETY WHICH IS CARRYING ON THE BUSIN ESS OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS, EARNS PROFITS AND GAINS OF BUSINESS BY PROVIDING CREDIT FACILITIES TO ITS MEMBERS. THE INT EREST INCOME SO DERIVED OR THE CAPITAL, IF NOT IMMEDIATELY REQUIRED TO BE LENT TO THE MEMBERS, THE SOCIETY CANNOT KEEP THE SAID AMOUNT ID LE. IF THEY DEPOSIT THIS AMOUNT IN BANK SO AS TO EARN INTEREST, THE SAI D INTEREST INCOME IS ATTRIBUTABLE TO THE PROFITS AND GAINS OF THE BUSINE SS OF PROVIDING CREDIT ITA NO.2203/K/2016 CENTRAL BANK OF INDIA EMPLOYEES COOP SOCIETY LTD. A.Y.2013-14 9 FACILITIES TO ITS MEMBERS ONLY. THE SOCIETY IS NOT CARRYING ON ANY SEPARATE BUSINESS FOR EARNING SUCH INTEREST INCOME. THE INCOME SO DERIVED IS THE AMOUNT OF PROFITS AND GAINS OF BUSIN ESS 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 TOTAL INCOME UNDER SECTION 80P OF THE ACT. 11. IN THIS CONTEXT WHEN WE LOOK AT THE JUDGMENT OF TH E APEX COURT IN TOTGARS CO-OPERATIVE SALE SOCIETY'S CASE ( SUPRA ), ON WHICH RELIANCE IS PLACED, THE SUPREME COURT WAS DEALING WITH A CAS E WHERE THE ASSESSEE/CO-OPERATIVE 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 CONSIDERATIO N RECEIVED FROM MARKETING AGRICULTURAL PRODUCE OF ITS MEMBERS WAS R ETAINED IN MANY CASES. THE SAID RETAINED AMOUNT WHICH WAS PAYABLE T O ITS MEMBERS FROM WHOM PRODUCE WAS BOUGHT, WAS INVESTED IN A SHO RT-TERM DEPOSIT/SECURITY. SUCH AN AMOUNT WHICH WAS RETAINED BY THE ASSESSEE- SOCIETY WAS A LIABILITY AND IT WAS SHOWN IN THE BAL ANCE SHEET ON THE LIABILITY SIDE. THEREFORE, TO THAT EXTENT, SUCH INT EREST INCOME CANNOT BE SAID TO BE ATTRIBUTABLE EITHER TO THE ACTIVITY MENT IONED 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 SAID CASE, THE APEX C OURT HELD THE ASSESSING OFFICER WAS RIGHT IN TAXING THE INTEREST INCOME INDICATED ABOVE UNDER SECTION 56 OF THE ACT. FURTHER THEY MAD E IT CLEAR THAT THEY ARE CONFINING THE SAID JUDGMENT TO THE FACTS OF THA T CASE. THEREFORE IT IS CLEAR, SUPREME COURT WAS NOT LAYING DOWN ANY LAW. 12. IN THE INSTANT CASE, THE AMOUNT WHICH WAS INVESTED IN BANKS TO EARN INTEREST WAS NOT AN AMOUNT DUE TO ANY MEMBERS. IT W AS 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 IMME DIATELY REQUIRED BY THE ASSESSEE FOR LENDING MONEY TO ITS MEMBERS, AS T HERE WERE NO TAKERS. THEREFORE THEY HAD DEPOSITED THE MONEY IN A BANK SO AS TO EARN INTEREST. THE SAID INTEREST INCOME IS ATTRIBUTABLE TO CARRYING ON THE BUSINESS OF BANKING AND THEREFORE IT IS LIABLE TO B E 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. 336 ITR 516(AP) . 13. IN THAT VIEW OF THE MATTER, THE ORDER PASSED BY TH E APPELLATE AUTHORITIES DENYING THE BENEFIT OF DEDUCTION OF THE AFORESAID AMOUNT IS UNSUSTAINABLE IN LAW.. 15. IN VIEW OF THE AFORESAID JUDICIAL PRONOUNCEMEN TS, WE ARE OF THE VIEW THAT THE OBJECTIONS RAISED BY THE REVENUE IN THE GROUNDS OF APPEAL BEFORE US, CANNOT BE SUSTAINED. ITA NO.2203/K/2016 CENTRAL BANK OF INDIA EMPLOYEES COOP SOCIETY LTD. A.Y.2013-14 10 7. IT IS NOT DISPUTED BEFORE US BY THE PARTIES THA T THE FACTS AND CIRCUMSTANCES UNDER WHICH THE APPEAL WAS DECIDED BY THE TRIBUNAL IN THE EARLIER AYS WAS IDENTICAL TO THE FACTS AND CIRCUMSTANCES IN THE PRESENT AY. WE ARE THEREFORE OF THE VIEW THAT THE DECISION RENDERED BY THE TRIBUNAL WILL BE APPLICABL E TO THE PRESENT AY ALSO. RESPECTFULLY FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE, WE UPHOLD THE ORDER OF THE CIT(A) AND DISMISS THE APPE AL BY THE REVENUE. 8. IN THE RESULT, APPEAL BY THE REVENUE IS DISMIS SED. ORDER PRONOUNCED IN THE COURT ON 01 .03.2018 SD/- SD/- [WASEEM AHMED] [ N.V.VAS UDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 01 .03.2018. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1. M/S. CENTRAL BANK OF INDIA EMPLOYEES COOPERATIVE SOCIETY LTD., 10, NELLIE SENGUPTA SARANI, KOLKATA-700087. 2A.C.I.T., .WARD-33(3), KOLKATA 3. CIT(A)-9, KOLKATA 4. CIT-11, KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SR.PRIVATE SECRETARY/HEAD OF OFFICE & D.D. O. ITAT, KOLKATA BENCHES