Income Tax Officer-1, Bahraich V. Co-operative Cane Development Union, Bahraich

ITA 364/LKW/2016

• Counselvise Citation: [2018] 112 COUNSELVISE.COM (IT) 5237 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-06-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 09-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C K SINGH
• Keywords: Business income; Set aside; Capital Gains
• Section: 80P; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI. N .S. SAINI , ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 363 & 364/LKW/2016 ASSESSMENT YEAR: 2009 - 10 & 2012 - 13 INCOME TAX OFFICER - 1 BAHRAICH V. CO - OPERATIVE CANE DEVELOPMENT UNION BAHRAICH T AN /PAN : AAAAC8503F (APP ELLA NT) (RESPONDENT) APP ELL ANT BY: SHRI C.K. SINGH, D.R. RESPONDENT BY: SHRI VINOD KUMAR, A.R. DATE OF HEARING: 08 10 201 8 DATE OF PRONOUNCEMENT: 09 10 201 8 O R D E R PER N .S. SAINI , A .M : THESE ARE THE APPEALS FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A), FAIZABAD, BOTH DATED 9/3/2016 FOR ASSESSMENT YEARS 2009 - 10 AND 2012 - 13. 2 . THE SOLE ISSUE INVOLVED IN THESE APPEALS IS THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN DE LETING THE ADDITION OF RS.98,58,510/ - IN ASSESSMENT YEAR 2009 - 10 AND RS.2,10,23,820/ - IN ASSESSMENT YEAR 2012 - 13 BY ALLOWING DEDUCTION UNDER SECTION 80P OF THE ACT. 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER DISALLOWED DEDUCTION UNDER SECTI ON 80P OF THE ACT FOR THE YEARS UNDER APPEAL ON THE GROUND THAT AS PER SECTION 80P(2) OF THE ACT DEDUCTION UNDER SECTION 80P IS ALLOWABLE WHERE THE ASSESSEE IS A CO - O PERATIVE SOCIETY. THE ASSESSEE ITSELF HAS NOT CLAIMED THE STATUS OF CO - O PERATIVE SOCIETY IN THE RETURN OF INCOME FILED. SECTION 2(1 9 ) OF THE ACT DEFINES A ITA NO.363 & 364/LKW/2016 PAGE 2 OF 11 CO - OPERATIVE SOCIETY AS A CO - O PERATIVE SOCIETY REGISTERED UNDER THE CO - O PERATIVE SOCIETY ACT, 1912 OR UNDER ANY OTHER LAW FOR THE TIME BEING IN FORCE IN ANY STATE FOR REGISTRATION OF CO - O PE RATIVE SOCIETY , WHICH IS NOT CASE OF THE ASSESSEE AS SECTION 5 OF U.P. SUGAR CANE (REQUISITION OF SUPPLY & PURCHASES) ACT, 1953 CLEARLY SAYS THAT CANE DEVELOPMENT UNION SHALL BE THE BODY CORPORATE BY THE NAME OF SUCH AREA OR SUCH OTHER NAME AS MAY BE PRESC RIBED. THE ASSESSING OFFICER OBSERVED IN LIGHT OF THE ABOVE THAT IT IS CLEAR THAT ASSESSEE NEITHER FALLS UNDER THE DEFINITION OF A CO - O PERATIVE SOCIETY AS DEFINED UNDER SECTION 2(19) OF THE ACT NOR SUPPORTED BY SECTION 5 OF U.P. SUGAR CANE (REQUISITION OF SUPPLY & PURCHASES) ACT, 1953. AS DEDUCTION UNDER SECTION 80P IS RESTRICTED TO CO - OPERATIVE SOCIETIES ONLY, THE SAME IS NOT ALLOWABLE IN THE CASE OF THE ASSESSEE AS THIS DEDUCTION IS PROVIDED NOT TO A CATEGORY OF INCOME BUT TO A CATEGORY OF ASSESSEE, IN THIS CASE CO - OPERATIVE SOCIETY. 4 . ON APPEAL, THE LD. CIT(A) ALLOWED THE CLAIM FOR DEDUCTION UNDER SECTION 80P OF THE ACT BY OBSERVING THAT SAME ISSUE BASED ON SAME FACTS HAS BEEN DECIDED BY THE LD. CIT(A), FAIZABAD IN APPEAL CIT(A)/FZD/14 - 15/10/126/55 VIDE ORDER DATED 7/5/2015 IN THE CASE OF ASSESSEE ITSELF FOR ASSESSMENT YEAR 2011 - 12 DECIDED IN FAVOUR OF THE ASSESSEE. HE ALSO OBSERVED THAT THE LUCKNOW BENCH OF THE TRIBUNAL IN THE CASE OF CO - OPERAT IVE CANE DEVELOPM ENT UNION LTD., AKBARPUR, AMBEDKAR NAGAR F OR ASSESSMENT YEAR 2010 - 11 IN ITA NO.806/LKW/2014, DATED 17/11/2015 HAS DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE LD. CIT(A) EXTENSIVELY QUOTED FROM THE ORDER OF THE LD. CIT(A), FAIZABAD REFERRED TO ABOVE AS UNDER AND ALLOWED THE APPEAL OF THE ASSE SSEE: - 4. I HAVE CONSIDERED THE MATTER. DURING THE APPELLATE PROCEEDINGS THE AR OF THE APPELLANT SUBMITTED THE REGISTRATION CERTIFICATE DATED 03.12.1988 ISSUED BY THE REGISTRAR, GANNA ITA NO.363 & 364/LKW/2016 PAGE 3 OF 11 SAHKARI SAMITI, UP REGISTERING THE APPELLANT AS A CO - OPERATIVE SOCIETY UNDER THE UTTAR PRADESH SAHKARI SAMITI ADHINIYAM, 1965. AS PER SECTION 2(19) OF THE ACT, CO - OPERATIVE SOCIETY MEANS A CO - OPERATIVE SOCIETY REGISTERED UNDER THE CO - OPERATIVE SOCIETY ACT, 1912 OR UNDER ANY OTHER LAW FORT THE TIME BEING IN FORCE IN ANY STATE FOR THE REGISTRATION OF CO - OPERATIVE SOCIETY. SINCE THE APPELLANT IS REGISTERED AS A CO - OPERATIVE SOCIETY UNDER THE UTTAR PRADESH SAHKARI SAMITI ADHINIYAM, 1965, IN MY CONSIDERED OPINION THE AO WAS NOT JUSTIFIED IN NOT ALLOWING STATUS OF CO - OPERATIVE SOCI ETY TO THE APPELLANT. I HAVE ALSO PERUSED THE RELEVANT FINANCIAL STATEMENTS OF THE APPELLANT SOCIETY FOR F,Y. 2010 - 11. ON PERUSAL OF THE PROFIT AND LOSS ACCOUNT IT IS NOTED THAT THE MAJOR RECEIPTS SHOWN BY THE APPELLANT ON CREDIT SIDE ARE AS UNDER: - COMMI SSION ON SUPPLY OF CANE RS. 1,66,74,902/ - INTEREST ON INVESTMENTS RS. 1,87,574/ - INTEREST ON FIXED DEPOSITS /TDRS RS. 35,82,379/ - FROM BALANCE SHEET IT IS NOTED THAT MAIN INVESTMENTS MADE BY THE APPELLANT SOCIETY AS ON 31.03.2011 ARE AS UNDER: - FIXED DE POSITS IN BANK RS. 6,71,22,287/ - DEPOSITS IN POST OFFICE/FIXED DEPOSITS ETC. RS.2,02,200/ - OTHER INVESTMENTS RS. 69,51,109/ - IT IS OBSERVED THAT THE APPELLANT HAS NOT RECEIVED ANY INTEREST FROM ITS MEMBERS WHO ARE SUGAR CANE GROWERS. IN THE BALANCE SHEET ALSO NO AMOUNT IS SHOWN TO HAVE BEEN EXTENDED TO ITS MEMBERS AS LOAN ON CREDIT. ON PERUSAL OF BALANCE SHEET IT IS SEEN THAT THE APPELLANT SOCIETY HAS HUGE SURPLUS OF RS. 6,95,72,593/ - (RS.1,58,35,343+5,37,37,250/ - ) WHICH HAS BEEN INVESTED INFORM OF F IXED DEPOSITS /TDRS AND OTHER INVESTMENTS AND INTERCUT INCOME OF KS 37,69,9537 - (RS. 1,87,574/ - + 35F82,379/ - ) HAS ACCRUED TO ITA NO.363 & 364/LKW/2016 PAGE 4 OF 11 IT ON SUCH INVESTMENTS. THE ISSUE WHICH IS TO BE DECIDED IS THAT WHETHER THE SAID INTEREST INCOME WOULD QUALIFY FOR DEDUCTION U/S S OP OF THE ACT. A SIMILAR ISSUE HAS BEEN DECIDED BY THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF TOTGARS CO - OPERATIVE SALE SOCIETY LTD. VS. !TO, (2010) 228 CTR S26(KAR.) IN WHICH IT HAS BEEN HELD AS UNDER: - '9. IT HAS TO 'BE STATED AT THE OUTSET THAT MAN Y OF THE DECISIONS RELIED UPON BY THE LEARNED COUNSEL FOR THE APPELLANT PERTAIN TO THE CASES WH EREIN THE ASSESSEE WAS A CO - OPERATIVE BANK AND IT IS NOT DOING ANY BANKING BUSINESS AND EVEN ACCORDING TO THE ASSESSEE, THE ACTIVITIES OF THE ASSESSEE WOULD FAL L WITHIN THE AMBIT OF SECTION 80P(2)(A)(I) AND (III) OF THE ACT. '80P DEDUCTION IN RESPECT OF INCOME OF COOPERATIVE SOCIETIES (1) WHERE, CASE OF AN ASSESSEE BEING A CO - OPERATIVE SOCIETY, THE GROSS TOTAL INCOME INCLUDES ANY INCOME REFERRED TO IN SUB SEC. ( 2), THERE SHALL BE DEDUCTED, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION, THE SUMS SPECIFIED IN SUB SEC - (2) IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE. (2) THE SUMS REFERRED TO IN SUB - SEC(L) SHALL BE THE FOLLOWING NAMELY: (A) IN TH E CASE OF A COOPERATIVE SOCIETY ENGAGED IN - (!) CARRYING ON THE BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS, OR (II)........,. ( III ) THE MARKETING OF AGRICULTURAL PRODUCE BY ITS MEMBERS OR THE WHOLE OF THE AMOUNT OF PROFITS AND GAIN S OF BUSINESS ATTRIBUTABLE TO ANY ONE OR MORE OF SUCH ACTIVITIES.' ITA NO.363 & 364/LKW/2016 PAGE 5 OF 11 10. IT IS WELL SETTLED THAT TOTAL INCOME OF THE ASSESSEE IS CHARGEABLE TO TAX UNDER SEC.4 OF THE ACT. THE TOTAL INCOME HAS TO BE COMPUTED IN ACCORDANCE WITH THE PROVISIONS OF SEC. 14 OF THE ACT WHICH LAYS DOWN FOR THE PURPOSE OF COMPUTATION OF INCOME OF AN ASSESSEE HAS TO BE CLASSIFIED UNDER SIX HEADS; (A)SALARIES (B) INTEREST ON SECURITIES (C) INCOME FROM HOUSE PROPERTY (D) PROFITS AND GAINS OF BUSINESS OR PROFESSION (E) CAPITAL GAINS (F ) INCOME FROM OTHER SOURCES. BY AN AMENDMENT MADE IN 1988 'INTEREST ON SECURITIES' HAS BEEN MADE CHARGEABLE TO TAX AS BUSINESS INCOME WHEN SUCH INTEREST FORMS PART OF BUSINESS PROFITS AND IN ALL OTHER CASES UNDER SEC. 56(2)(ID) OF T HE ACT AS INCOME FROM OTHER SOURCES. THE COMPUTATION OF INCOME UNDER EACH OF THE ABOVE SIX HEADS WILL HAVE TO BE MADE INDEPENDENTLY AND SEPARATELY. THERE ARE SPECIFIC RULES OF DEDUCTION AND ALLOWANCES UNDER EACH HEAD. NO DEDUCTION OF ADJUSTMENT ON ACCOUNT OF ANY EXPENDITURE CAN BE MADE EXCEPT AS PROVIDED BY THE ACT. 11. IN THE PRESENT CASE IT IS NOT DISPUTED THAT ASSESSEE IS NOT DOING ANY B ANKING BUSINESS AND THEREFORE, THE VARIOUS DECISIONS RELIED UPON BY THE LEARNED COUNSEL FOR THE APPELLANT - ASSESSEE WHER EIN THE ASSESSE E WAS DOING BUSINESS OF BANKING IS NOT HELPFUL TO HIM TO SUPPORT THE CASE OF THE APPELLANT. FURTHER, IT IS ALSO NOT THE CASE OF THE ASSESSEE THAT THE STATUTORY DEPOSITS ARE REQUIRED TO BE MODE BY THE ASSESSEE AS REQUIRED BY THE ASSESSEE DOIN G BANKING BUSINESS BY MAKING DEPOSITS IN RBI IN WHICH CASE ALSO THE INTEREST EARNED FROM THE SAID DEPOSITS CAN BE ATTRIBUTABLE TO THE BUSINESS OF BANKING AND IN THE PRESENT CASE IT IS CLEAR FROM THE ITA NO.363 & 364/LKW/2016 PAGE 6 OF 11 PERUSAL OF THE MATERIAL ON RECORD THAT THE ASSESSEE IS CL AIMING BENEFIT OF SEC. 80 P OF THE ACT ON THE GROUND THAT IT IS A SOCIETY REGISTERED UNDER THE COOPERATIVE SOCIETIES ACT AND THE OBJECT OF THE SOCIETY IS TO ARRANGE FOR THE SALE OF AGRICULTURAL PRODUCE OF THE MEMBERS TO THE BEST ADVANTAGE AND TO ADVANCE LOA NS TO THE MEMBERS ON THE SECURITY OF THEIR PRODUCE, RAW OR PROCESSED. THE ASSESSEE HAS ALSO OTHER OBJECTS WHICH ARE NOT RELEVANT FOR DISCUSSION HAVING REGARD TO THE PROVISION OF .SECTION 80P OF THE ACT AND THE CONTENTION OF THE ASSESSEE BEFORE THE AS SESSMENT OFFICER WAS THAT INCOME RECEIVED FROM THE DEPOSITS IN BANKS AND SECURITIES IS ATTRIBUTABLE TO THE BUSINESS OF ADVANCING LOANS TO MEMBERS ON SECURITY OF THE PRODUCE AND THEREFORE, QUALIFIES FOR DEDUCTION AS INCOME FROM THE HEAD 'PROFIT AND GAINS OF BUSINESS'. THE MAIN DECISION UPON WHICH THE LEARNED COUNSEL FOR THE APPELLANT RELIED UPON TO SUBSTANTIATE HIS CONTENTION IN THAT BEHALF WHEREIN IT WAS HELD THAT INTEREST DERIVED FROM SHORT - TERM DEPOSIT OF SURPLUS FUNDS WOULD ALSO QUALIFY FOR DEDUCTION UND ER SEC. 80P (2) (A) (1), BUT THE SAID DECISION IN CIT VS. PRODUCIN (P) LTD. {SUPRA) HAS BEEN REVERSED BY THE HON'BLE SUPREME COURT IN CIVIL APPEAL NO.1332 OF2006 AND IT IS OBSERVED IN THE SAID JUDGMENT, THE HON'BLE SUPREME COURT WHILE SETTING ASIDE THE ORD ER PASSED IN THE JUDGEMENT OF THIS COURT REPORTED IN CIT VS. PRODUCIN (P) LTD. (SUPRA) HAS OBSERVED WHILE REMANDING THAT, ACCORDING TO THE DEPARTMENT IT WAS THE CASE OF SURPLUS BEING INVESTED IN FOR WHEREAS, ACCORDING TO THE ASSESSEE IT WAS THE CASE OF ADV ANCE HAVING BEEN RECEIVED FROM THE EXPORTER WHICH WAS INVESTED IN FOR FOR SHORT DURATION AND THEREFORE, THE DECISION OF THIS COURT REPORTED IN [2007] 211 CTR (KAR) 393: [2007] 290 ITR 5598 (KAR)(SUPRA) IS NOT AVAILABLE TO THE APPELLANT IN THE PRESENT CASE TO SUBSTANTIATE THE CONTENTION. 12. IT IS CLEAR FROM THE PERUSAL OF THE MATERIAL AVAILABLE ON RECORD THAT THE APPELLANT DOES NOT CLAIM TO BE A BANKING COMPANY THOUGH A VAGUE REFERENCE IS MADE BY THE LEARNED COUNSEL FOR THE ITA NO.363 & 364/LKW/2016 PAGE 7 OF 11 APPELLANT TO R. 78 OF THE KARRTATAKA CO - OPERATIVE SOCIETIES RULES, 1960. 'RULE 28: MAINTENANCE OF FLUID RESOURCES. - EVERY COOPERATIVE SOCIETY ACCEPTING DEPOSITS AND GRANTING CASH CREDITS SHOULD MAINTAIN FLUID RESOURCES IN SUCH FROM AND ACCORDING TO SUCH STANDARDS AS MAY BE FIXED B Y THE REGISTRAR, FROM TIME TO TIME, BY GENERAL OR SPECIAL ORDER. ' IT IS CLEAR FROM PERUSAL OF THE SAID RULE THAT EVERY COOPERATIVE SOCIETY ACCEPTING DEPOSITS AND GRANTING CASH CREDITS SHOULD MAINTAIN FLUID RESOURCES IN SUCH FROM AND ACCORDING TO SUCH STAN DARD R/S MAY BE FIXED BY THE REGISTRAR, FROM TIME TO TIME, BY GENERAL OR SPECIAL ORDER. 13. THE ABOVE SAID CONTENTION HAS NOT BEEN TAKEN BEFORE THE ASSESSING AUTHORITY OR THE TRIBUNAL AND NO MATERIAL WHATSOEVER IS PRODUCED TO SHOW THAT THE APPELLANT SOCIET Y IS AUTHORISED TO ACCEPT DEPOSITS AND THE PERUSAL OF THE SAID PROVISION WOULD SHOW THAT THE ISSUANCE OF FLUID RESOURCES HAS TO BE DONE WHERE THE SOCIETY IS DOING BANKING BUSINESS I.E., ACCEPTING DEPOSITS AND GRANTING CASH CREDITS AND THEREFORE, THERE IS NO MERIT IN THE CONTENTION OF THE ID. COUNSEL FOR THE APPELLANT THAT THE INTEREST I S EARNED OUT O F THE STATUTORY DEPOSIT . THE ASSESSEE IS ADMITTEDLY NOT DOING ANY BANKING BUSINESS. WHAT IS INVESTED IN SECURITY A ND TERM DEPOSITS WITH THE B A NK IS THE SURPLUS FUNDS IN THE POSSESSION OF THE ASSESSEE AND AS THE ASSESSEE IS NOT DOING ANY BANKING BUSINESS, INTEREST ACCRUED FROM SECURITIES AND DEPOSITS IN BANKS OTHER THAN COOPERATIVE SOCIETIES WERE TAKEN AS RELATABLE TO PROFITS AND GAINS OF THE SOCIETY AS THE SAID INVESTMENT DOES NOT IN ANY WAY AFFECT THE WORKING CAPITAL IS NOT A PART OF THE CIRCULATING CAPITAL, BUT ONLY OUT OF THE SURPLUS FUNDS AVAILABL E TO THE SOCIETY AND THE ASSESSEE HAS NOT PROVED THAT THERE IS NO (SIC) OBLIGATION ON THE PART OF THE ASSESSEE TO HOLD ANY SECURITIES AS THE PART OF THE BUSINESS AND WHAT IS INVESTED IN SECURITIES AND DEPOSITS IS WE SURPLUS FUNDS AVAILABLE WITH THE ASSESSEE AND IT WOULD NOT IN ANY ITA NO.363 & 364/LKW/2016 PAGE 8 OF 11 WAY AFFECT THE CIRCULATING CAPITAL OF THE SOCIETY AND THEREFORE, IT IS CLEAR THAT THE FI NDING ARRIVED AT BY THE TRIBUNAL THAT THE INTEREST RECEIVED FROM SECURITIES AND DEPOSIT EXCEPT DEPOSITS WITH THE BANKS OTHER THAN COOPERATIVE BANKS IS NOT RELATABLE TO THE BUSINESS OF THE ASSESSEE IN THE PRESENT CASE AND CONSEQUENTLY, IT IS NOT QUALIFIED F OR DEDUCTION AND CONSEQUENTLY CANNOT QUALIFY FOR COMPUTATION OF EXEMPTION UNDER SEC . 80 P OF THE ACT IS JUSTIFIED.' THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN CIT VS. PRODUCIN (P) LTD., 290 ITR 598 HAS BEEN SET ASIDE BY THE HON'BLE SUPREME COURT IN CIVIL APPEAL NO. 1332 OF 2006 AND WHILE SETTING ASIDE THE JUDGMENT IT HAS BEEN OBSERVED THAT WHERE INVESTMENT IS OF SURPLUS, THE INTEREST IS RECEIVED FROM THE INVESTMENT MADE OF SURPLUS FUNDS AS CONTENDED BY THE REVENUE, THE SAME IS NOT ATTRIBUTABLE TO PROFITS, GAINS AND INCOME FROM BUSINESS AND ONLY WHERE THE INTEREST RECEIVED FROM SECURITY AND DEPOSITS IS ATTRIBUTABLE TO THE BUSINESS PROFITS AND GAINS OF THE ASSESSEE, THE SAME WOULD QUALIFY FOR EXEMPTION UNDER SEC. 80 P (2) (A) ( I) OF THE ACT. THE HON' BLE SUPREME COURT IN ITS JUDGMENT REPORTED IN 322 ITR 283 HAS AFFIRMED THE JUDGEMENT OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF TOTGARS COOPERATIVE SALE SOCIETY. THE APEX COURT HAS HELD THAT THE INTEREST INCOME ARISING TO A COOPERATIVE SOCIETY CARR YING ON THE BUSINESS OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS, 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. SUCH INTEREST CANNOT BE SAID T O BE ATTRIBUTABLE TO THE ACTIVITIES OF THE SOCIETY VIZ., CARRYING ON THE BUSINESS OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS. IT IS NOTED THAT THE INVESTMENTS MADE BY THE APPELLANT SOCIETY IN FIXED DEPOSITS IN BANKS AND OTHER INVESTMENTS ARE NOT STATUTO RY DEPOSITS AS THE APPELLANT IS NOT DOING ANY BANKING BUSINESS. THE SURPLUS FUND AVAILABLE WITH THE APPELLANT HAS BEEN INVESTED IN ITA NO.363 & 364/LKW/2016 PAGE 9 OF 11 FIXED DEPOSITS AND OTHER INVESTMENTS WHICH HAS NOTHING TO DO WITH THE OBJECT OF PROVIDING CREDIT FACILITIES TO MEMBERS OR MAR KETING AGRICULTURAL PRODUCE OF THE MEMBERS OF THE ASSESSEE. THE SAID INCOME IS, THEREFORE, NOT ATTRIBUTABLE TO THE BUSINESS OF THE ASSESSEE AND DOES NOT QUALIFY FOR EXEMPTION U/S 80 P (2) (A) (I) OR (HI) OF THE ACT. IT MAY BE MENTIONED THAT NO EVIDENCE HAS BEEN FURNISHED BY THE APPELLANT SOCIETY TO PROVE THAT IT IS EVEN ENGAGED IN PROVIDING CREDIT FACILITIES TO ITS MEMBERS. IT IS, THEREFORE, HELD THAT INTEREST OF RS. 37,69,953/ - WHICH HAS ACCRUED ON FIXED DEPOSITS AND OTHER INVESTMENTS, IN THE PRESENT CASE C ANNOT QUALIFY FOR DEDUCTION U/S 80 P OF THE ACT HOWEVER, COMMISSION OF RS. 1,66,74,902 / - WHICH HAS BEEN RECEIVED BY THE APPELLANT SOCIETY FROM THE SUGAR MILLS FOR SUPPLY OF CANE GROWN BY ITS MEMBERS TO THEM WOULD QUALIFY FOR DEDUCTION U/S 80 P (2) (A) ( III ) OF THE ACT. IN VIEW OF THE ABOVE, OUT OF ADDITION OF RS. 1,58,35,343/ - , MADE BY THE AO, I CONFIRM THE ADDITION OF RS. 37,69,953/ - . GROUNDS OF APPEAL ARE DECIDED IN ACCORDANCE WITH THE AFOREMENTIONED DIRECTIONS. THE APPELLANT ALSO FURNISHED JUDGEMENT DATED 17.11.2015 ITAT LUCKNOW IN CASE OF M/S COOPERATIVE CANE DEVELOPMENT UNION LTD., AKBARPUR, AMBEDKAR NAGAR FOR A.Y. 2010 - 11 IN 1TA NO. 806/LKW/2014. THE ISSUE OF CLAIM OF SECTION 80P ON INTEREST HAS BEEN DECIDED IN FAVOUR OF APPELLANT. THE RELEVANT PORTION O F THE ORDER IS REPRODUCED AS UNDER: - 7. NOW WE TAKE UP THE REMAINING FOUR APPEALS. ALTHOUGH, OUT OF THESE FOUR APPEALS, TWO APPEALS ARE FILED BY THE ASSESSEE AND TWO APPEALS ARE FILED BY THE REVENUE AND ALL THESE FOUR APPEALS ARE IN RESPECT OF FOUR DIFFER ENT ASSESSEES BUT THE ISSUE INVOLVED IS ONLY ONE AS TO WHETHER DEDUCTION IS ALLOWABLE TO THE ASSESSEE OR NOT U/S 80 P OF THE ACT IN RESPECT OF INTEREST INCOME RECEIVED FROM BANK/POST OFFICE. IT WAS SUBMITTED BY LEARNED A.R. OF THE ASSESSEE THAT THIS ISSUE I S SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE FOLLOWING TRIBUNAL ORDERS: ITA NO.363 & 364/LKW/2016 PAGE 10 OF 11 (I) INCOME TAX OFFICER, GONDA VS. CO - OPERATIVE CANE DEVELOPMENT UNION LTD. IN ITA NO. 352/LKW/2011 DATED 02.12.2011 (II) CANE DEVELOPMENT COUNCIL, CHILWARIA VS. INCOME TAX OFFI CER IN ITA NO. 63/LKW/2014 DATED 31.03.2015. ( II I) CO - OP. CANE DEVELOPMENT UNION LTD. VS. DCIT IN ITA NO. 77/LKW/2013 DATED 23.01.2015. LEARNED AR OF THE ASSESSEE SUBMITTED COPY OF ALL THESE TRIBUNAL ORDERS. 8. LEARNED D.R. OF THE REVENU E SUPPORTED THE ASSESSMENT ORDER IN ALL THESE CASES. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IT IS ADMITTED POSITION OF FACT THAT THE ONLY DISPUTE INVOLVED IN THESE APPEALS IS REGARDING ALLOWABILITY OF DEDUCTION U/S 80 P OF THE ACT IN RESP ECT OF INTEREST INCOME EARNED ON DEPO S IT WITH BANK/POST OFFICE. AS PER THESE TRIBUNAL ORDERS CITED BY LEARNED A.R. OF THE ASSESSEE, COPIES OF WHICH WERE PLACED ON RECORD, IT IS SEEN THAT IT WAS HELD BY THE TRIBUNAL ON THIS ISSUE THAT THE DEDUCTION IS ALLOW ABLE U/S 80 P OF THE ACT IN RESPECT OF INTEREST INCOME EARNED OUT OF SURPLUS FUND LYING DEPOSITED IN POST OFFICE/COMMERCIAL BANK. NO CONTRARY DECISION WAS BROUGHT TO OUR NOTICE AND HENCE, RESPECTFULLY FOLLOWING THESE TRIBUNAL ORDERS, WE HOLD THAT IN THE PRE SENT CASE ALSO, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80 P OF THE ACT. THE FACTS OF THE JUDGEMENTS OF LD. CIT ( A), FAIZABAD AND HON'BLE ITAT, LUCKNOW ARE ALMOST IDENTICAL TO THE FACTS OF THE PRESENT CASE. IN VIEW OF THE ABOVE CITED JUDGEMENTS OF HON'BL E ITAT, LUCKNOW AND LD. CIT(A), FAIZABAD THE INTEREST ACCRUED ON FIXED DEPOSITS AND OTHER INVESTMENTS AND THE COMMISSION REC EIVED BY APPELLANT SOCIETY FROM SUGAR MI LL S IS ELIGIBLE FOR DEDUCTION U/S 80 P. THE ADDITION OF RS. 95,58,510 / - IS HEREBY DELETED. 6. AS A RESULT THE APPEAL IS ALLOWED. ITA NO.363 & 364/LKW/2016 PAGE 11 OF 11 5 . SIMILARLY, FOR ASSESSMENT YEAR 2012 - 13 ALSO ADDITION OF RS.2,10,23,820/ - UNDER SECTION 80P OF THE ACT WAS DELETED BY THE LD. CIT(A). 6 . THE LD. D.R. RELIED ON THE ORDERS OF THE ASSESSING OFFICER. HE COULD NOT POINT O UT ANY SPECIFIC ERROR IN THE ORDERS OF THE LD. CIT(A). HE ALSO COULD NOT BRING ANY MATERIAL ON RECORD TO SHOW THAT DEPARTMENT HAS FILED ANY APPEAL TO THE TRIBUNAL AGAINST THE ORDER OF THE LD. CIT(A), FAIZABAD FOR ASSESSMENT YEAR 2011 - 12. HE ALSO COULD NO T BRING ANY MATERIAL ON RECORD TO S HOW THAT THE ORDER OF THE TRIBUNAL IN THE CASE OF CO - OPERATIVE CANE DEVELOPMENT UNION LIMITED, AKBARPUR, AMBEDKAR NAGAR (SUPRA) WAS VARIED IN APPEAL BY ANY HIGHER FORUM. HENCE, WE FIND NO GOOD REASON TO INTERFERE WITH TH E ORDER OF THE LD. CIT(A) , WHICH IS HEREBY CONFIRMED AND THE GROUNDS OF APPEAL OF THE REVENUE FOR BOTH THE YEARS UNDER APPEALS ARE DISMISSED. 7 . IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 09 / 10 / 201 8 . S D/ - SD/ - [PARTHA SARATHI CHAUDHURY] [ N.S. SAINI ] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 9 TH OCTO BER , 201 8 JJ: 0810 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR