Appeal details
Counselvise Citation
[2016] 131 COUNSELVISE.COM (IT) 4102 (ITAT-KOLKATA)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 11 month(s) 4 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
14-12-2016
Appeal Filed By
Assessee
Bench Allotted
A
Next Hearing Date
17-10-2016
Assessment Year
2009-2010
Appeal Filed On
09-01-2015
Judgement Text
I.T.A. NO. 26/KOL./2015 ASSESSMENT YEAR: 2009-2010 PAGE 1 OF 8 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER I.T.A. NO. 26/KOL/ 2015 ASSESSMENT YEAR: 2009-2010 SE, SEC & E CO RAILWAYS ECCS LIMITED,.............. .............................APPELLANT (FORMERLY KNOWN AS SOUTH EASTERN RAILWAY EMPLOYEES COOPERATIVE CREDIT SOCIETY LIMITED), 93, CIRCULAR GARDEN REACH ROAD, KOLKATA-700 043 [PAN: AABAS 9181 Q] -VS.- ASSISTANT COMMISSIONER OF INCOME TAX,.............. ............................RESPONDENT CIRCLE-28, KOLKATA, AAYAKAR BHAWAN DAKSHIN, 2, GARIAHAT ROAD (SOUTH), KOLKATA-700 068 APPEARANCES BY: SHRI SUBASH AGARWAL, ADVOCATE, FOR THE ASSESSEE SHRI SALLONG YADEN, ADDL. CIT, D.R., FOR THE DEPARTMENT DATE OF CONCLUDING THE HEARING : NOVEMBER 17, 2016 DATE OF PRONOUNCING THE ORDER : DECEMBER 14, 2016 O R D E R PER SHRI P.M. JAGTAP, A.M. .: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-XIV, KOLKATA D ATED 27.10.2014 AND THE SOLITARY ISSUE INVOLVED THEREIN RELATES TO THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LD. C IT(APPEALS) ON ACCOUNT OF ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 80P OF THE INCOME TAX ACT, 1961 IN RESPECT OF INTEREST INCOME TO THE EXTE NT OF RS.76,73,388/-. I.T.A. NO. 26/KOL./2015 ASSESSMENT YEAR: 2009-2010 PAGE 2 OF 8 2. THE ASSESSEE IN THE PRESENT CASE IS A COOPERATIV E SOCIETY, WHICH IS ENGAGED IN GIVING LOANS AND CREDIT FACILITY TO ITS MEMBERS, WHO ARE THE EMPLOYEES OF THE SOUTH EASTERN RAILWAYS. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 18.09.2 009 DECLARING TOTAL INCOME AT NIL AFTER CLAIMING DEDUCTION UNDER SECT ION 80P AMOUNTING TO RS.4,14,51,512/-. DURING THE COURSE OF ASSESSMENT P ROCEEDINGS, IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE DEDUCTION UNDER SECTION 80P WAS CLAIMED BY THE ASSESSEE EVEN IN RESPECT OF INTEREST INCOME EARNED FROM BANK. ACCORDING TO HIM, THE SAID INCOME WAS LIABLE TO BE TAXED UNDER THE HEAD INCOME FROM OTHER SOURCES AND THE ASSESSEE W AS NOT ENTITLED TO CLAIM DEDUCTION UNDER SECTION 80P THEREON. HE, THER EFORE, REQUIRED THE ASSESSEE TO OFFER ITS EXPLANATION IN THE MATTER. IN REPLY, IT WAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE PRIMARY OBJEC TIVE OF THE ASSESSEE- SOCIETY IS TO PROVIDE LOAN AND CREDIT FACILITY TO I TS MEMBERS FROM THE AVAILABLE FUNDS AND WHENEVER THERE IS EXCESS FUND, THE SAME IS INVESTED FOR SHORT-TERM INVESTMENTS IN THE BANKS AND FINANCI AL INSTITUTIONS. IT WAS SUBMITTED THAT THE FUNDS ARE SO INVESTED ONLY IN CA SE WHEN THERE IS NO DEMAND FOR ANY LOAN OR CREDIT IN ORDER TO ENSURE TH AT UNUTILIZED FUNDS DO NOT REMAIN IDLE. IT WAS SUBMITTED THAT WHENEVER THE RE IS A DEMAND FOR LOAN OR CREDIT FACILITY FROM THE MEMBERS, THE SHORT -TERM INVESTMENT MADE IN BANK DEPOSITS IS LIQUIDATED PREMATURELY AND THE FUNDS ARE MADE AVAILABLE FOR GIVING LOAN AND CREDIT FACILITY TO IT S MEMBERS. IT WAS CONTENDED THAT THE ASSESSEE-SOCIETY THUS ATTAINS IT S PRIMARY OBJECTIVE OF PROVIDING LOAN AND CREDIT FACILITY TO ITS MEMBERS A ND EARNING OF INTEREST FROM SHORT-TERM INVESTMENTS MADE IN BANKS IS ONLY A NCILLARY TO SUCH PRIMARY OBJECTIVE. IT WAS CONTENDED THAT THE INTERE ST EARNED BY THE ASSESSEE-SOCIETY ON THE SHORT-TERM INVESTMENTS MADE IN BANK DEPOSITS THUS IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80P. W ITHOUT PREJUDICE TO THIS MAIN ARGUMENT AND AS AN ALTERNATIVE, IT WAS SUBMITT ED BY THE ASSESSEE THAT IF AT ALL THE INTEREST INCOME EARNED FROM BANK IS TO BE TREATED AS INCOME FROM OTHER SOURCES, THEN EXPENSES FOR EARNIN G SUCH INCOME IN THE FORM OF INTEREST PAID TO ITS MEMBERS AGAINST SUCH D EPOSIT SHOULD BE ALLOWED. THE ASSESSING OFFICER DID NOT FIND MERIT I N THE MAIN CONTENTION I.T.A. NO. 26/KOL./2015 ASSESSMENT YEAR: 2009-2010 PAGE 3 OF 8 RAISED BY THE ASSESSEE-SOCIETY THAT THE INTEREST IN COME EARNED ON SHORT- TERM DEPOSITS MADE WITH BANK WAS ELIGIBLE FOR DEDUC TION UNDER SECTION 80P. HE HELD THAT THERE WAS NOTHING BROUGHT ON RECO RD BY THE ASSESSEE- SOCIETY TO SHOW THAT IT WAS NECESSARY TO MAKE INVES TMENT IN SHORT-TERM DEPOSITS WITH BANK FOR THE PURPOSE OF ITS BUSINESS. HE ALSO HELD THAT THE ASSESSEE COULD NOT ESTABLISH SATISFACTORILY THAT TH ERE WAS ANY STATUTORY REQUIREMENT FOR MAKING SUCH INVESTMENT IN ORDER TO CARRY OUT ITS BUSINESS. HE, THEREFORE, DISALLOWED THE CLAIM OF TH E ASSESSEE FOR DEDUCTION UNDER SECTION 80P IN RESPECT OF INTEREST INCOME EARNED ON BANK DEPOSITS. HE, HOWEVER, ALLOWED THE ALTERNATIVE CLAI M OF THE ASSESSEE THAT THE INTEREST PAID BY IT TO THE MEMBERS WAS ALLOWABL E AS DEDUCTION AGAINST SUCH INTEREST INCOME ON PROPORTIONATE BASIS. ACCORD INGLY, AFTER ALLOWING SUCH DEDUCTION TO THE EXTENT OF RS.1,18,85,272/- FR OM THE INTEREST AND RS.1,95,58,660/- EARNED ON BANK DEPOSITS, THE BALAN CE AMOUNT OF RS.76,73,388/- WAS BROUGHT TO TAX BY THE ASSESSING OFFICER IN THE HANDS OF THE ASSESSEE IN THE ASSESSMENT COMPLETED UNDER SECT ION 143(3) VIDE AN ORDER DATED 14.12.2011. 3. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3), AN APPEAL WAS PREFERRED BY THE ASSESSEE BEF ORE THE LD. CIT(APPEALS) CHALLENGING THE DISALLOWANCE MADE BY T HE ASSESSING OFFICER ON ACCOUNT OF ITS CLAIM FOR DEDUCTION UNDER SECTION 80P IN RESPECT OF INTEREST INCOME EARNED FROM BANK. THE SUBMISSIONS MADE BY THE ASSESSEE IN SUPPORT OF ITS CASE ON THIS ISSUE, HOWEVER, WERE NOT FOUND ACCEPTABLE BY THE LD. CIT(APPEALS) AND HE PROCEEDED TO CONFIRM THE DISALLOWANCE MADE BY THE ASSESSING OFFICER UNDER SECTION 80P FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO. 6.1 TO 6.4 & 7 OF HI S IMPUGNED ORDER:- 6.1. I HAVE CAREFULLY CONSIDERED THE WRITTEN SUBMI SSION OF THE LD. A/R OF THE APPELLANT SOCIETY FILED ALONG WI TH AUDITOR'S REPORT DURING THE COURSE OF APPELLATE PRO CEEDINGS. I AM IN AGREEMENT WITH THE CONTENTION OF THE A.O TH AT THE CLAIM OF THE APPELLANT OF PROPORTIONATE' ADMINISTRA TIVE EXPENSES IS NOT ALLOWABLE AS THE MAIN OBJECTIVE OF THE ASSESSEE IS TO PROVIDE LOAN AND CREDIT FACILITIES T O ITS I.T.A. NO. 26/KOL./2015 ASSESSMENT YEAR: 2009-2010 PAGE 4 OF 8 MEMBERS FROM ITS AVAILABLE FUNDS AND THE ENTIRE STA FF AND INFRASTRUCTURE FACILITIES ARE USED FOR THAT ONLY AN D DEPOSITING MONEY TO THE BANK AND KEEP IT AS FIXED D EPOSIT FOR A FIXED PERIOD NEED NOT REQUIRE ANY FURTHER WOR K IN ADDITION TO ITS NORMAL WORK OF THE OFFICE. 6.2 AS REGARDS THE CLAIM AND DEDUCTION U/S. 80P IS CONCERNED, THE FOLLOWING FACTS MAY BE CONSIDERED: THE RELEVANT PART OF PROVISIONS OF SECTION 80P IS A S UNDER: WHERE, IN THE CASE OF AN ASSESSEE BEING A CO-OPERAT IVE SOCIETY, THE GROSS TOTAL INCOME INCLUDES ANY INCOME REFERRED TO IN SUB-SECTION (2/ THERE SHALL BE DEDUCTED. IN A CCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION/ THE SUMS SPECIFIED IN SUB-SECTION (2/ IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE. (2) THE SUMS REFERRED TO IN SUB-SECTION (1) SHALL B E THE FOLLOWING, NAMELY;- (A) IN THE CASE OF A CO-OPERATIVE SOCIETY ENGAGED I N- (I) CARRYING ON THE BUSINESS OF BANKING OR PROVIDIN G CREDIT FACILITIES TO ITS MEMBERS *(4) THE PROVISIONS OF THE SECTION SHALL NOT APPLY IN RELATION TO ANY CO-OPERATIVE BANK OTHER THAN A PRIMARY AGRIC ULTURAL CREDIT SOCIETY OR A PRIMARY CO-OPERATIVE AGRICULTUR AL AND RURAL DEVELOPMENT BANK. * INSERTED BY THE FINANCE ACT, 2006 W.E.F. 1-4-2007 . IN A RECENT DECISION IN THE CASE OF TOTGAR'S CO-OPE RATIVE COOPERATIVE SALE SOCIETY LTD. VS ITO, KARNATAKA [20 10] 322 ITR 283 (SC), WHERE THE FACTS WERE SIMILAR TO THE A PPELLANT, IT HAS BEEN HELD AS UNDER: FACTS: THE ASSESSEE WAS A CO-OPERATIVE CREDIT SOCIE TY. ITS BUSINESS WAS TO PROVIDE CREDIT FACILITIES TO ITS ME MBERS AND TO MARKET THEIR AGRICULTURAL PRODUCE. DURING THE RE LEVANT ASSESSMENT YEARS, IT HAD SURPLUS FUNDS WHICH IT INV ESTED IN SHORT-TERM DEPOSITS WITH THE BANKS AND IN THE GOVER NMENT SECURITIES AND EARNED INTEREST THEREON. ACCORDING T O THE ASSESSEE, ITS ACTIVITY CONSTITUTED ELIGIBLE ACTIVIT Y UNDER SECTION 80P(2)(A)(I) END, HENCE, IT WAS ENTITLED TO THE BENEFIT OF DEDUCTION FROM ITS GROSS TOTAL INCOME. I T, THEREFORE, CLAIMED DEDUCTION UNDER SECTION 8OP(2)(A )(I) IN RESPECT OF SUCH INTEREST INCOME. THE TRIBUNAL HELD THAT SUCH INTEREST INCOME WOULD FALL UNDER THE HEAD INCOME F ROM OTHER SOURCES' UNDER SECTION 56 AND NOT UNDER SECTI ON 2B I.T.A. NO. 26/KOL./2015 ASSESSMENT YEAR: 2009-2010 PAGE 5 OF 8 END, CONSEQUENTLY, THE ASSESSEE-SOCIETY WOULD NOT B E ENTITLED TO DEDUCTION UNDER SECTION 8OP(2)(A)(I). T HE HIGH COURT, BY IMPUGNED JUDGMENT AFFIRMED THE DECISION O F THE TRIBUNAL. ON APPEAL TO THE SUPREME COURT:- HELD: IN THE INSTANT CASE, THE INTEREST HELD 'NOT E LIGIBLE FOR DEDUCTION UNDER SECTION 80P(2)(A)(I) WAS NOT THE IN TEREST RECEIVED FROM THE MEMBERS FOR PROVIDING CREDIT FACI LITIES TO THEM. WHAT WAS SOUGHT TO BE TAXED UNDER SECTION 56 WAS THE INTEREST INCOME ARISING ON THE SURPLUS INVESTED IN SHOD-TERM DEPOSITS AND SECURITIES WHICH SURPLUS WAS NOT REQUI RED FOR BUSINESS PURPOSES. THE ASSESSEE MARKETED THE PRODUC E OF ITS MEMBERS WHOSE SALE PROCEEDS AT TIME WERE RETAINED B Y IT. SINCE THE FUND CREATED BY SUCH RETENTION WAS NOT RE QUIRED IMMEDIATELY FOR BUSINESS PURPOSES, IT WAS INVESTED IN SPECIFIED SECURITIES. SUCH INTEREST INCOME WOULD CO ME IN THE CATEGORY OF 'INCOME FROM OTHER SOURCES AND HENCE, S UCH INTEREST INCOME WOULD BE TAXABLE UNDER SECTION 56 A S RIGHTLY HELD BY THE ASSESSING OFFICER. THE HEAD NOTE TO SEC TION 80P INDICATES THAT THE SAID SECTION DEALS WITH DEDUCTIO NS IN RESPECT OF INCOME OF CO-OPERATIVE SOCIETIES. SECTIO N 80P(1) INTER ALIA STATES THAT WHERE THE GROSS TOTAL INCOME OF A CO-OPERATIVE SOCIETY INCLUDES ANY INCOME FROM ONE O R MORE SPECIFIED ACTIVITIES, THEN SUCH INCOME SHALL BE DED UCTED FROM THE GROSS TOTAL INCOME IN COMPUTING THE TOTAL TAXAB LE INCOME OF THE ASSESSEE SOCIETY. AN INCOME, WHICH IS ATTRIBUTABLE TO ANY OF THE SPECIFIED ACTIVITIES IN SECTION BOP(2) WOULD BE ELIGIBLE FOR DEDUCTION. THE WORD 'I NCOME HAS BEEN DEFINED UNDER SECTION 2(24)(I) TO INCLUDE PROFITS AND GAINS. THIS SUB-SECTION IS AN INCLUSIVE PROVISI ON. THE PARLIAMENT HAS INCLUDED SPECIFICALLY BUSINESS PROFI TS INTO THE DEFINITION OF THE WORD 'INCOME'. THEREFORE, ONE IS REQUIRED TO GIVE A PRECISE MEANING TO THE WORDS 'PR OFITS AND GAINS OF BUSINESS MENTIONED IN SECTION 80P(2). IN THE INSTANT CASE, THE ASSESSEE-SOCIETY REGULARLY INVEST ED FUNDS NOT IMMEDIATELY REQUIRED FOR BUSINESS PURPOSES. INT EREST ON SUCH INVESTMENTS, THEREFORE, COULD NOT FALL WITHIN THE MEANING OF THE EXPRESSION 'PROFITS AND GAINS OF BUS INESS. SUCH INTEREST INCOME COULD NOT BE SAID TO BE ATTRIB UTABLE TO THE ACTIVITIES OF THE SOCIETY, NAMELY, CARRYING ON THE BUSINESS OF PROVIDING CREDIT FACILITIES TO ITS MEMB ERS OR MARKETING OF THE AGRICULTURAL PRODUCE OF ITS MEMBER S. THEREFORE, LOOKING TO THE FACTS AND CIRCUMSTANCES O F THE CASE, THE ASSESSING OFFICER WAS RIGHT IN TAXING THE INTEREST INCOME UNDER SECTION 56. TO SAY THAT THE SOURCE OF INCOME IS NOT RELEVANT FOR DECIDING THE APPLICABILITY OF SECT ION BOP WOULD NOT BE CORRECT BECAUSE ONE NEEDS TO GIVE WEIG HTAGE TO THE WORD 'THE WHOLE OF THE AMOUNT OF PROFITS AND GA INS OF I.T.A. NO. 26/KOL./2015 ASSESSMENT YEAR: 2009-2010 PAGE 6 OF 8 BUSINESS, ATTRIBUTABLE TO ONE OF THE ACTIVITIES SPE CIFIED IN SECTION 80P(2)(A). THE WORDS 'THE WHOLE OF THE AMOU NT OF PROFITS AND GAINS OF BUSINESS EMPHASIZE THAT THE I NCOME IN RESPECT OF WHICH DEDUCTION IS SOUGHT; MUST CONSTITU TE THE OPERATIONAL INCOME AND NOT THE OTHER INCOME WHICH A CCRUES TO THE SOCIETY. IN THE INSTANT CASE, THE EVIDENCE S HOWED THAT THE ASSESSEE-SOCIETY EARNED INTEREST ON FUNDS WHICH WERE NOT REQUIRED FOR BUSINESS PURPOSES AT THE GIVEN POI NT OF TIME. THEREFORE, ON THE FACTS AND CIRCUMSTANCES OF THE INSTANT CASE, SUCH INTEREST INCOME FELL IN THE CATE GORY OF 'OTHER INCOME WHICH HAD RIGHTLY BEEN TAXED BY THE DEPARTMENT UNDER SECTION 56. 6.3 FROM THE ABOVE DECISION, IT IS ABUNDANTLY CLEAR THAT THE SURPLUS FUNDS OF THE SOCIETY KEPT WITH OTHER BANKS IS TO BE TAXED AS 'INCOME FROM OTHER SOURCES'. INTEREST ON S UCH INVESTMENTS WOULD NOT FALL WITHIN THE EXPRESSION - PROFITS AND GAINS FROM BUSINESS. THEREFORE, SUCH INTEREST I NCOME COULD NOT BE SAID TO BE ATTRIBUTABLE TO THE ACTIVIT IES OF THE SOCIETY, NAMELY CARRYING ON THE BUSINESS OF PROVIDI NG CREDIT FACILITIES TO ITS MEMBERS, THUS NOT ALLOWABLE AS TH E DEDUCTION U/S.80P(2)(A)(I) OF THE I.T. ACT. 6.4. IT IS ALSO TO BE NOTED HERE THAT IN COURSE OF THE PROCEEDINGS, THE APPELLANT COULD NOT SATISFACTORILY EXPLAIN BEFORE THE A.O. THAT THE STATUTORY INVESTMENTS MADE WITH THE BANKS WERE REQUIRED FOR CARRYING ON ITS BUSINESS WH EN THERE WAS NO RESTRAIN IN CONDUCT OF THE SAID BUSINESS OF THE CO- OPERATIVE SOCIETY OF KEEPING STATUTORY DEPOSITS. TH E A.O. HAD DETECTED DURING THE SCRUTINY PROCEEDINGS THAT THE ORGANIZATION IS A CO-OPERATIVE SOCIETY REGISTERED U NDER THE MULTI-STATE CO-OPERATIVE SOCIETIES ACT. THE CO-OPER ATIVE SOCIETY IS NOT REGISTERED AND GOVERNED UNDER THE BA NKING REGULATION ACT, 1949 FOR THE REASON OF WHICH, THE C O- OPERATIVE SOCIETY IS NOT SUPPOSED TO ABIDE BY THE G UIDELINES LAID OUT FROM TIME TO TIME BY THE RBI. 7. RESPECTFULLY FOLLOWING THE DECISIONS TAKEN IN TH E CASES REFERRED TO ABOVE (SUPRA) AND IN VIEW OF THE ABOVE, I HOLD THAT THE ACTION OF THE A.O. OF MAKING ADDITION OF RS.76,73,388/- AS INCOME FROM OTHER SOURCE ON ACCOU NT OF INTEREST INCOME FROM INVESTMENT IS REASONABLE AND I N ACCORDANCE WITH LAW. MOREOVER, IT IS PERTINENT TO M ENTION HERE THAT IT IS SETTLED PRINCIPLE OF LAW THAT WHENE VER A CLAIM IS PLACED BEFORE THE AO BY THE APPELLANT, THE ONUS LIES UPON THE ASSESSEE TO SATISFACTORILY PROVE THE TRANSACTIO NS BY FURNISHING CREDIBLE DOCUMENTARY EVIDENCES. BUT IN T HE INSTANT CASE, THE APPELLANT SOCIETY HAS FAILED TO D ISCHARGE I.T.A. NO. 26/KOL./2015 ASSESSMENT YEAR: 2009-2010 PAGE 7 OF 8 SUCH ONUS. I, THEREFORE, CONFIRM THE ADDITION MADE BY THE A.O. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS FILED THIS APPEAL BEFORE THE TRIBUNAL. 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS AGREED BY THE LD. REPRESENTATIVES OF BOTH THE SIDES, THE ISSUE INVOLV ED IN THIS APPEAL OF THE ASSESSEE RELATING TO ITS CLAIM FOR DEDUCTION UNDER SECTION 80P IN RESPECT OF INTEREST INCOME EARNED FORM BANK IS SQUARELY COV ERED AGAINST THE ASSESSEE BY THE DECISION OF THE HONBLE CALCUTTA HI GH COURT IN ASSESSEES OWN CASE FOR A.Y. 2002-03 AND 2004-05 RENDERED VIDE ITS ORDER DATED 15.07.2016 PASSED IN ITA NO. 484 OF 2007. BY THE SA ID ORDER, HONBLE CALCUTTA HIGH COURT HAS DECIDED THE SIMILAR ISSUE I NVOLVED IN ASSESSEES OWN CASE AGAINST THE ASSESSEE IN PRINCIPLE AND REMA NDED THE MATTER TO THE ASSESSING OFFICER WITH THE FOLLOWING DIRECTIONS :- (A) TO WORK OUT THE INTEREST EARNED UNDER SECTIONS 63 AND 64 OF THE MULTI STATE COOPERATIVE SOCIETIES ACT , 2002 AND TO ALLOW BENEFIT UNDER SECTION 80P AND (B) TO ASCERTAIN THE INTEREST PAID TO THE MEMBERS F OR THE PURPOSE OF EARNING INTEREST FROM INVESTMENTS AND AL LOW DEDUCTION ON ACCOUNT OF SUCH INTEREST. 5. AS ALREADY NOTED, THE ASSESSING OFFICER IN THE P RESENT CASE HAS ALREADY ALLOWED DEDUCTION TO THE ASSESSEE ON ACCOUN T OF INTEREST PAID TO THE MEMBERS FOR THE PURPOSE OF EARNING INTEREST FRO M INVESTMENTS. ACCORDINGLY, WE RESPECTFULLY FOLLOW THE DECISION OF THE HONBLE CALCUTTA HIGH COURT IN ASSESSEES OWN CASE FOR A.Y. 2003-04 & 2004-05 (SUPRA) AND UPHOLD THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) C ONFIRMING THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING THE CLAIM O F THE ASSESSEE FOR DEDUCTION UNDER SECTION 80P IN RESPECT OF INTEREST EARNED ON BANK DEPOSITS IN PRINCIPLE. THE MATTER, HOWEVER, IS REMA NDED TO THE ASSESSING OFFICER FOR THE LIMITED PURPOSE OF WORKING OUT THE INTEREST EARNED UNDER I.T.A. NO. 26/KOL./2015 ASSESSMENT YEAR: 2009-2010 PAGE 8 OF 8 SECTIONS 63 AND 64 OF THE MULTI STATE COOPERATIVE S OCIETIES ACT, 2002 AND TO ALLOW THE BENEFIT OF DEDUCTION UNDER SECTION 80P TO THAT EXTENT. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS TRE ATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON DECEMBER 14, 2016. SD/- SD/- (K. NARASIMHA CHARY) (P.M. JAGTAP) JUDICIAL MEMBER ACCOUNTANT ME MBER KOLKATA, THE 14 TH DAY OF DECEMBER, 2016 ORDER PRONOUNCED BY SD/- SD/- (S.S.V. RAVI) (P.M. JAGTAP) J.M. A.M. COPIES TO : (1) SE, SEC & E CO RAILWAYS ECCS LIMITED, (FORMERLY KNOWN AS SOUTH EASTERN RAILWAY EMPLOYEES COOPERATIVE CREDIT SOCIETY LIMITED), 93, CIRCULAR GARDEN REACH ROAD, KOLKATA-700 043 (2) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-28, KOLKATA, AAYAKAR BHAWAN DAKSHIN, 2, GARIAHAT ROAD (SOUTH), KOLKATA-700 068 (3) COMMISSIONER OF INCOME TAX(APPEALS-XIV, KOLKAT A; (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.
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