SESEC, ECO. Railway Employees Co Operative Credit Society Ltd., Kolkata V. PCIT-10, KOLKATA, Kolkata

ITA 621/KOL/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4457 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2016
• Appeal Filed By: Assessee
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 07-04-2016

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH A KOL KATA [BEFORE HONBLE SHRI S.S.VISWANETHRA RAVI, JM & D R.ARJUN LAL SAINI, AM ] ITA NO.621/KOL/2016 ASSESSMENT YEAR : 2011-12 S.E. S.E.C., E.CO. RAILWAY EMPLOYEES -VERSUS- P.C. I.T.- 10, CO-OPERATIVE CREDIT SOCIETY LTD. KOLKATA KOLKATA [PAN: AABAS 9181 Q] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI SUBASH AGARWAL, ADVOCATE FOR THE RESPONDENT : SHRI RAJAT SUBHRA BISWAS, CIT DATE OF HEA RING : 05.09.2016 DATE OF PRONOUNCEMENT : 28.09.2016. ORDER PER DR.ARJUN LAL SAINI, AM THE CAPTIONED APPEAL FILED BY THE ASSESSE E PERTAINING TO A.Y. 2011-12, IS DIRECTED AGAINST THE ORDER PASSED BY THE PRINCIPAL COMMISSIONER OF INCOME TAX -10, KOLKATA U/S 263 OF THE INCOME TAX ACT, 1961 (IN SHO RT THE ACT) DATED 02.03.2016 , WHICH IN TURN ARISES OUT OF AN ORDER PASSED BY THE LD. ASSESSING OFFICER U/S 143(3) OF INCOME TAX ACT, 1961, DATED 24.01.2014. 2. THE FACTS OF THE CASE ARE STATED IN BRIEF. THE A SSESSEE IS A COOPERATIVE CREDIT SOCIETY. IT FILED ITS RETURN OF INCOME ON 13.09.201 1 DISCLOSING TOTAL INCOME AT NIL. THE AO AFTER MAKING CERTAIN ADDITIONS COMPLETED THE ASSESSMENT U/S 143(3) ON DATED 24/01/2014. LATER ON THE ASSESSMENT ORDER MADE BY T HE LD. AO U/S 143(3) OF THE ACT HAS BEEN REVIEWED AND SUPERVISED BY THE C.I.T. U/S 263 OF THE ACT. THE LD. CIT WHILE INVOKING THE PROVISIONS OF SECTION 263 OF THE ACT F OUND THAT THE ORDER MADE BY THE LD. AO WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE ON THE FOLLOWING GROUNDS :- ITA NO .621/KOL/2016 S.E.S.E. C.,E.CO.RAILWAY EMPLOYEES CO-OP.CREDIT SOCIETY LTD. A..Y.2011-12 2 I) DURING THE COURSE OF ASSESSMENT U/S 143(3) OF T HE ACT DATED 24/01/2014, IT WAS HELD THAT THE ASSESSEE HAD EARNED BANK INTEREST INCOME O F RS.40,87,926/- WHICH WAS NOT FROM ACTIVITY OF PROVIDING CREDIT FACILITIES TO ITS MEMB ERS, AND THIS INCOME IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT. IN THE SAID ASSESSMENT ORDER, THE ASSESSING OFFICER ASSESSED THIS INCOME AS INCOME FR OM OTHER SOURCES, AND ALLOWED PROPORTIONATE INTEREST EXPENSES AGAINST THIS INCOME , BY WAY OF INTEREST ON DEPOSITS FROM YOUR MEMBERS; (II) ON PERUSAL OF THE BALANCE SHEET IT IS REVEALED THAT THE ASSESSEE HAD ENOUGH INTEREST FREE FUNDS IN THE FORM OF SHARE CAPITAL AND FREE RE SERVES WHICH CAN BE CONSIDERED TO HAVE BEEN INVESTED IN BANK DEPOSITS FETCHING THE IN TEREST INCOME TO THE ASSESSEE; & (III) THE INTEREST ON HOUSE BUILDING ADVANCE TO THE STAFF OF THE ASSESSEE AND MISCELLANEOUS RECEIPTS ARE NOT INCOME FROM PROVIDIN G CREDIT FACILITIES TO ITS MEMBERS AND IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80P (2)(A)(I) AND NEEDED TO BE ASSESSED AS INCOME FROM BUSINESS/OTHER SOURCES. 3. THE LD. CIT DIRECTED THE LD. AO TO PASS A FRE SH ASSESSMENT ORDER IN ACCORDANCE WITH THE PROVISIONS OF LAW BY OBSERVING THE FOLLOW ING :- 4. I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF T HE CHIEF MANAGER OF THE ASSESSEE SOCIETY AND ALL THE RELEVANT FACTS AND THE MATERIAL S AVAILABLE ON RECORD. THE ISSUES INVOLVED ARE ALLOWABILITY U/S 80P OF INTEREST INCOM E, ALLOWABILITY U/S 80P OF INTEREST INCOME FROM HOUSE BUILDING LOAN TO STAFF AND ALLOWA BILITY U/S 80P OF MISCELLANEOUS RECEIPTS. 5. IT IS IMPERATIVE ON THE PART OF THE ASSESSING OF FICER TO EXAMINE EACH AND EVERY TRANSACTION AND FINALLY TO ASSESS CORRECT INCOME OF ASSESSEE. IN THIS CASE, THE ASSESSMENT ORDER WAS PASSED WITHOUT GIVING PROPER CONSIDERATIO N TO THE MATERIALS / FACTS AVAILABLE IN RECORD. WHILE DOING AN ASSESSMENT U/S 143(3), TH E A.O. IS NOT EXPECTED TO BE PASSIVE IN THE FACE OF THE RETURN BUT TO ACTIVELY EXAMINE T HE CASE FROM ALL PERSPECTIVE AND CONDUCT FURTHER ENQUIRY. 6. THE POWER OF REVISION BY THE CIT U/S 263 OF THE ACT IS VERY WIDE AND IT IS IN THE NATURE OF SUPERVISORY JURISDICTION. THE POWER U/S 263 CAN BE EXERCISED EVEN IN CASES WHERE THE ISSUE IS DEBATABLE AND SUCH POWER IS NOT COMPARABLE WITH THE POWER OF RECTIFICATION OF MISTAKE U/S 154 OF THE INCOME TAX ACT. IT IS WELL S ETTLED THAT INCORRECT ASSUMPTION OF FACTS OR APPLICATION OF LAW SATISFIES THE REQUIREME NT OF LAW I.E. ORDER BEING ERRONEOUS & PREJUDICIAL TO THE INTEREST OF REVENUE. THE ORDER P ASSED BY THE A.O. WITHOUT APPLICATION OF MIND OR ORDER SHOWING APPARENT ERROR OF REASONIN G OR THE ORDER WHERE THE A.O. SIMPLY ACCEPTS WHERE THE ASSESSEE STATED IN HIS RET URN OF INCOME AND FAILS TO MAKE THE ENQUIRIES WHICH ARE CALLED FOR IN THE FACTS AND CI RCUMSTANCES OF THE CASE WILL ALSO CALL FOR INTERVENTION U/S 263 OF THE ACT BY THE CIT/PR. CIT. IT IS A TRITE LAW THAT THE DISCLOSURE OF FACTS BY THE ASSESSEE IN THE RETURN OF INCOME AN D / OR IN THE COURSE OF ASSESSMENT PROCEEDINGS CANNOT GIVE IMMUNITY FROM REVISIONAL JU RISDICTION OF THE CIT/PR. CIT U/S 263. THE ABOVE POSITION OF THE LAW HAS BEEN REITERA TED BY THE HON'BLE SUPREME COURT IN VARIOUS DECISIONS INCLUDING THAT OF RAMPYARI DEVI S ARAOGI VS. CIT (1968) 67 ITR 84 (SC), TARA DEVI AGARWAL VS. CIT( 1973) 88 ITR 323 ( SC), MALABAR INDUSTRIES CO. LTD VS. CIT (1991) 198 ITR 611 (KERALA) WHICH WAS AFFIR MED BY SUPREME COURT IN 243 ITR 83. 7. NOW WE MOVE ON TO EACH ISSUE TO SEE WHETHER THE A.O. HAS DILIGENTLY ENQUIRED AND EXAMINED THEM. ITA NO .621/KOL/2016 S.E.S.E. C.,E.CO.RAILWAY EMPLOYEES CO-OP.CREDIT SOCIETY LTD. A..Y.2011-12 3 7.1 THE FIRST ISSUE INVOLVED IS WHETHER THE INTERES T INCOME ON BANK INTEREST TO THE TUNE OF RS.40,87,926/- IS DEDUCTIBLE U/S 80P OF THE ACT. TH E A.O. HAS ATTRIBUTED THIS INTEREST TO THE INCOME ARISING OUT OF BANK INTEREST UNDER THE H EAD INCOME FROM OTHER SOURCES. 7.L.1 THE ASSESSEE HAS HIGHLIGHTED THE WORD 'ATTRIB UTABLE TO' IN THE SAID SECTION, CITING THE CASE OF CAMBAY ELECTRIC SUPPLY INDUSTRIAL CO LT D VS COMMISSIONER OF INCOME TAX, GUJRAT-IL [ITR 113 (1978) 842]. THE CONTENTION BEIN G THAT THE WHOLE OF THE AMOUNT OF PROFITS AND GAINS OF BUSINESS, WHATEVER THE SOURCE, IS DEDUCTIBLE U/S 80P. HOWEVER, THE SAID JUDGMENT WAS RELATED WITH GENERAL BUSINESS OF THE ASSESSEE, AND HAS NOT DEALT WITH CO-OPERATIVE SOCIETIES. IN THE SAID SECTION, THE WO RD 'ATTRIBUTABLE TO' HAS BEEN USED IN RESPECT OF CARRYING ON THE BUSINESS OF BANKING OR P ROVIDING CREDIT FACILITIES TO ITS MEMBERS. 7.L.2 IN THE CASE OF THE ASSESSEE, CARRYING ON THE BUSINESS OF BANKING OR / PROVIDING FACILITIES TO ITS MEMBERS INCLUDE GIVING LOAN/CREDI T TO ITS MEMBERS, RECEIVING INTEREST THEREON, TAKING DEPOSIT FROM ITS MEMBERS AND GIVING .INTEREST THEREON TO THE MEMBERS. IN OTHER WORDS, THE INCOME GENERATED BY THE ASSESSEE I S TO BE FROM ITS MEMBERS AND ANY EXPENDITURE MADE BY WAY OF INTEREST SHOULD ALSO BE ATTRIBUTABLE TO ITS MEMBERS. AS LONG AS THE BANKING BUSINESS / PROVIDING CREDIT FACILITY IS LIMITED TO ITS MEMBERS, THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80P. HOWEVER, MAKING DEPOSIT TO BANK, WHICH IS NOT ITS MEMBER, DOES NOT CONSTITUTE THE 'BUSINESS OF BANKIN G OR PROVIDING FACILITIES TO ITS MEMBERS' BY THE ASSESSEE, AND THE ASSESSEE IS NOT A T ALL ELIGIBLE FOR DEDUCTION U/S 80P IN RESPECT OF SUCH INCOME. 7.2 THE SECOND ISSUE INVOLVES ALLOWANCE OF DEDUC TION U/S 80P OF THE ACT IN RESPECT OF INCOME FROM HOUSE BUILDING LOAN TO STAFF OF THE ASS ESSEE SOCIETY. THE ASSESSEE HAS CONTENDED THAT THE STAFFS ARE THE MEMBERS OF THE SO CIETY AND THEREFORE INTEREST EARNED FROM PROVIDING LOAN FACILITY IS ELIGIBLE U/S 80P OF THE ACT. HOWEVER, THE MEMBERS OF A CO-OPERATIVE ARE AN AUTONOMOUS ASSOCIATION OF PERSO NS UNITED VOLUNTARILY TO MEET THEIR COMMON ECONOMIC, SOCIAL, AND CULTURAL NEEDS AND ASP IRATIONS THROUGH A JOINTLY-OWNED AND DEMOCRATICALLY-CONTROLLED ENTERPRISE. WHEREAS, THE STAFF OF THE CO-OPERATIVE ARE PAID EMPLOYEE, HAVING AN EMPLOYER-EMPLOYEE RELATION SHIP WITH THE CO-OPERATIVE. HENCE, IT CAN NEVER BE SAID THAT THE STAFF IS A MEMBER OF THE SOCIETY, AND HENCE ANY INCOME GENERATED FROM THEM, BY WAY OF INTEREST OR OTHERWIS E, BECOMES INELIGIBLE FOR DEDUCTION U/S 80P. 7.3. THE THIRD ISSUE IS REGARDING INCOME UNDER THE HEAD MISCELLANEOUS RECEIPTS. THE ASSESSEE HAS CONTENDED THAT THE ASSESSEE RECOVERED FROM THE MEMBERS THE PRINTING AND STATIONERY COST AND INSTEAD OF ADJUSTING THE SAME W ITH THE COST OF PRINTING & STATIONARY OF THE ASSESSEE, SUCH AMOUNT WAS SEPARATELY SHOWN I N THE INCOME SIDE AS MISCELLANEOUS RECEIPTS. THIS SHOULD HAVE BEEN LOOKED INTO BY THE A.O. DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT HAS ALREADY BEEN STATED THAT THE FA ILURE ON THE PART OF THE ASSESSING OFFICER TO MAKE AN ENQUIRY ON A RELEVANT ISSUE/POIN T WOULD RENDER THE ASSESSMENT ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE. HENCE, NOT HAVING ENQUIRED INTO THE ABOVE ISSUE HAS RESULTED IN AN ERRONEOUS O RDER WHICH IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 8. IN THE TOTALITY OF THE POSITION OF LAW AND FACTS & CIRCUMSTANCES OF THE CASE, THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER ON 24/01/2014 IS HEREBY SET ASIDE IN RESPECT OF THE POINTS STATED IN THE SHOW-CAUSE NOTI CE. THE A.O. IS DIRECTED TO INITIATE ITA NO .621/KOL/2016 S.E.S.E. C.,E.CO.RAILWAY EMPLOYEES CO-OP.CREDIT SOCIETY LTD. A..Y.2011-12 4 FRESH ASSESSMENT PROCEEDINGS & CARRY OUT NECESSARY ENQUIRIES /VERIFICATION & PROVIDE REASONABLE OPPORTUNITY TO THE ASSESSEE FIRM TO PROD UCE DOCUMENTS & EVIDENCES WHICH IT MAY CHOSE TO RELY UPON FOR SUBSTANTIATING ITS OWN C LAIM. THEREAFTER A FRESH ASSESSMENT ORDER MAY BE PASSED IN ACCORDANCE WITH THE RELEVANT PROVISIONS OF LAW. 4. NOT BEING SATISFIED WITH THE ORDER OF THE LD. CIT U/S 263 OF THE ACT THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. ALTHOUGH IN THIS APPE AL, THE ASSESSEE HAS RAISED MULTIPLE GROUNDS OF APPEAL BUT AT THE TIME OF ASSESSMENT PRO CEEDINGS, THE GRIEVANCE OF THE ASSESSEE HAS BEEN CONFINED TO GROUND NOS. 2,3,4 AND 5 AND THE OTHER GROUNDS HAVE NOT BEEN PRESSED. GROUND NOS. 2 TO 5 ARE SOLITARY GRIE VANCES OF THE ASSESSEE WHICH READ AS UNDER :- 2. FOR THAT THE LD. CIT ERRED IN EXERCISING THE PO WER OF REVISION FOR THE PURPOSE OF DIRECTING THE A.O. TO HOLD ANOTHER INVESTIGATION WH EN THE ORDER OF THE A.O. WAS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF THE RE VENUE. 3. (A) FOR THAT THE LD. CIT WAS NOT JUSTIFIED IN HO LDING THAT THE BANK INTEREST INCOME EARNED BY THE ASSESSEE CO-OPERATIVE CREDIT SOCIETY AMOUNTING TO RS.40,87,926/- DOES NOT QUALIFY FOR DEDUCTION U/S. 80P. (B) FOR THAT THE ISSUE WHETHER THE BANK INTEREST IN COME EARNED BY THE ASSESSEE QUALIFIES FOR DEDUCTION U/S 80P HAS ALREADY BEEN CONSIDERED A ND INQUIRED INTO BY THE A.O. AND THE ISSUE IS ALSO SUBJECT-MATTER OF ADJUDICATION BE FORE THE CIT(A). AS SUCH, THE LD. CIT HAS NO JURISDICTION TO INVOKE REVISIONARY POWER IN REGARD THERETO. 4. FOR THAT THE LD. CIT WAS NOT JUSTIFIED IN HOLDIN G THAT THE INCOME EARNED FROM THE HOUSE BUILDING LOAN TO STAFF DOES NOT QUALIFY FOR D EDUCTION U/S 80P. 5. (A) FOR THAT THE LD. CIT WAS NOT JUSTIFIED IN HO LDING THAT THE RECEIPT FROM THE MEMBERS TOWARDS THE PRINTING & STATIONERY COST, WHICH WAS C REDITED TO MISCELLANEOUS RECEIPTS ACCOUNT, DOES NOT QUALIFY FOR DEDUCTION U/S 80P. (B) FOR THAT THE LD. CIT OUGHT TO HAVE CONSIDERED T HE FACT THAT RECEIPTS ON ACCOUNT OF PRINTING & STATIONERY FROM MEMBERS WERE REQUIRED TO BE NETTED AGAINST THE PRINTING & STATIONERY EXPENSES. AS SUCH, THE SAME HAD NO INCOM E ELEMENT. 5. GROUND NO.2:THE LD. AR FOR THE ASSESSEE SUBMI TTED THAT THE LD. CIT WAS WRONG IN EXERCISING THE POWERS TO HOLD ANOTHER INVESTIGATION THAT THE ORDER OF THE AO WAS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST O F THE REVENUE. THE LD. AR SUBMITTED THAT EVERYTHING WAS AVAILABLE ON RECORD OF THE AO A ND NOTHING WAS HIDDEN BY THE ASSESSEE. HENCE ORDER PASSED BY THE AO CANNOT BE ER RONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. ITA NO .621/KOL/2016 S.E.S.E. C.,E.CO.RAILWAY EMPLOYEES CO-OP.CREDIT SOCIETY LTD. A..Y.2011-12 5 6. ON THE OTHER HAND, THE LD. DR FOR THE REVENU E HAS PRIMARILY REITERATED THE STAND TAKEN BY THE LD. CIT AND STATED THAT ORDER WAS ERRO NEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE BECAUSE THE INTEREST INCOME ARE FROM THE COOPERATIVE SOCIETY AT RS.40,87,926/- DOES NOT QUALIFY FOR DEDUCTION U/S 8 0P OF THE ACT AND THE INCOME EARNED FROM THE HOUSE BUILDING LOAN DOES NOT QUALIF Y FOR DEDUCTION U/S 80P OF THE ACT AND PRINTING AND STATIONERY WHICH ARE CREDITED DOES NOT QUALIFY FOR DEDUCTION U/S 80P OF THE ACT. THEREFORE ORDER WAS ERRONEOUS AND PREJU DICIAL TO THE INTEREST OF THE REVENUE AND CIT HAS RIGHTLY EXERCISED HIS JURISDICTION U/S 263 OF THE ACT. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE NOTIC ED THAT THERE IS A MERIT IN THE SUBMISSIONS OF THE LD. DR FOR THE REVENUE, AS THE P ROPOSITION CANVASSED BY THE LD. DR HAVE BEEN SUPPORTED BY THE FACTS CITED BY HIM ABOVE . THE ORDER PASSED BY AO WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE BECAUSE THE INTEREST INCOME FROM THE COOPERATIVE SOCIETY AT RS.40,87,926/- DOES NOT QUALIFY FOR DEDUCTION U/S 80P OF THE ACT AND THE INCOME EARNED FROM THE HOUSE BUI LDING LOAN DOES NOT QUALIFY FOR DEDUCTION U/S 80P OF THE ACT AND PRINTING AND STATI ONERY WHICH ARE CREDITED DOES NOT QUALIFY FOR DEDUCTION U/S 80P OF THE ACT. THEREFORE WE DO NOT HESITATE TO CONFIRM THE ORDER OF CIT. 8. HENCE, THE APPEAL FILED BY THE ASSESSEE ON THIS GROUND IS DISMISSED. 9. THE NEXT GROUND NO. 3 RELATES TO WHETHER BANK INTEREST INCOME EARNED BY THE ASSESSEE COOPERATIVE SOCIETY AMOUNTING TO RS.40,8 7,926/- QUALIFIED FOR DEDUCTION U/S 80P OF THE ACT? THE SAID SUBJECT MATTER WAS FOR AD JUDICATION BEFORE THE LD CIT(A), WHETHER LD.CIT MAY EXERCISE REVISIONARY POWER U/S 2 63 OF THE ACT? 10. THE LD. AR FOR THE ASSESSEE HAS SUBMITTED TH AT THE ASSESSEE- COOPERATIVE SOCIETY RECEIVED AN ADVANCE AMOUNT FORM ITS MEMBERS AND UTI LIZED THE PART AMOUNT OF IT AND THE BALANCE AMOUNT WHICH CANNOT BE UTILIZED, THE AS SESSEE HAS DEPOSITED IN THE FIXED DEPOSIT WITH THE BANK ACCOUNT. HENCE THE FUNDS OF T HE COOPERATIVE SOCIETY WHICH WAS KEPT IN THE BANK IN THE FIXED DEPOSIT ENSURED THAT THE AMOUNTS WOULD NOT REMAIN IDLE. HENCE THE INTEREST INCOME ON THIS DEPOSIT IS ELIGIB LE FOR DEDUCTION U/S 80P OF THE ACT. ITA NO .621/KOL/2016 S.E.S.E. C.,E.CO.RAILWAY EMPLOYEES CO-OP.CREDIT SOCIETY LTD. A..Y.2011-12 6 THE LD. AR HAS FURTHER SUBMITTED THAT SECTION 80P(1 ) OF THE ACT STATES THAT THE AMOUNT OF PROFITS AND GAINS OF BUSINESS ATTRIBUTABL E TO ANY ONE OR MORE ACTIVITY WOULD BE ELIGIBLE FOR DEDUCTION U/S 80P(1) OF THE A CT. THE RELEVANT PORTION OF SECTION 80P(1) READS AS FOLLOWS :- 80P(1) WHERE, IN THE CASE OF AN ASESSEE BEING A CO -OPERATIVE SOCIETY, THE GROSS TOTAL INCOME INCLUDES ANY INCOME REFERRED TO IN SUB-SECTI ON (2), THERE SHALL BE DEDUCTED, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF TH IS SECTION, THE SUMS SPECIFIED IN SUB- SECTION (2), IN COMPUTING THE TOTAL INCOME OF THE A SSESSEE. (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 OR.. THE WHOLE OF THE AMO UNT OF PROFITS AND GAINS OF BUSINESS ATTRIBUTABLE TO ANY O R MORE OF SUCH ACTIVITIES. THE ABOVE CITED SECTION CLEARLY SHOWS THAT THE INCO ME ATTRIBUTABLE OUT OF THE INVESTMENT OF THE FUNDS CREDITED U/.S 63 OF THE COO PERATIVE SOCIETY IS AN INCOME ATTRIBUTABLE TO THE BUSINESS. 11. ON THE OTHER HAND, THE LD. DR FOR THE REVENU E HAS REITERATED THE STAND TAKEN BY THE AO AND HAS STRONGLY DEFENDED THE ORDER OF THE A O SAYING THAT THE INTEREST INCOME ARISING OUT OF SUCH INVESTMENT SHOULD BE ASSESSABLE U/S 56 OF THE ACT AND NOT UNDER THE HEAD INCOME FROM OTHER SOURCES. THE LD DR ALSO STAT ED THAT THE ASSESSEE RECEIVED ADVANCE MONEY FROM ITS MEMBERS, UTILIZED PART OF IT , AND BALANCE DEPOSITED IN F.D WITH BANK IS AGAINST THE LIABILITY, THEREFORE DEDUC TION SHOULD NOT BE ALLOWED. 12. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIALS AVAILABLE ON RECORD. WE NOTICED THAT THERE IS A SMALL MERIT IN THE SUBMISSI ONS OF THE ASSESSEE AS THE PROPOSITIONS CANVASSED BY THE LD AR FOR THE ASSESSE EE ARE SUPPORTED BY THE FACTS NARRATED ABOVE. THE AMOUNT OF INTEREST ARISING OUT OF INVESTMENT OF THE FUNDS CREDITED U/S 63 OF THE COOPERATIVE SOCIETY IS AN INCOME ATT RIBUTABLE TO THE BUSINESS. THE SECTION ITSELF SHOWS CLEARLY THAT INCOME ATTRIBUTAB LE TO THE BUSINESS WOULD BE ASSESSABLE AND ELIGIBLE FOR DEDUCTION U/S 80P OF TH E ACT. BUT IN THIS CASE IT IS TO BE EXAMINED FURTHER BY AS SESSING OFFICER WHETHER THE AMOUNT WHICH WAS INVESTED IN BANK FIXED DEPOSIT/SECURITIES , TO EARN INTEREST SHOULD NOT BE ANY ITA NO .621/KOL/2016 S.E.S.E. C.,E.CO.RAILWAY EMPLOYEES CO-OP.CREDIT SOCIETY LTD. A..Y.2011-12 7 AMOUNT DUE TO ANY MEMBER. THE AMOUNT INVESTED SHOUL D NOT BE LIABILITY. THE AMOUNT SHOULD NOT SHOWN AS LIABILITY IN THEIR MEMBERS ACCO UNT. IN FACT, THIS AMOUNT, WHICH IS IN THE NATURE OF PROFITS AND GAINS SHOULD NOT IMMED IALTELY REQUIRED BY THE ASSESSEE FOR LENDING MONEY TO THE MEMBERS, THAT IS THERE SHOULD BE NO TAKERS. ALL THESE ASPECTS ARE TO BE EXAMINED BY THE AO. THE ASSESSEE HAS ALSO STATED IN HIS GROUND THAT THE SAID SUBJECT MATTER WAS BEFORE LD CIT(A) FOR ADJUDICATION, THEREFORE THE CIT HAD NO P OWER TO INVOKE REVISIONARY POWER U/S 263 OF THE ACT. WE DO NOT FIND ANY FORCE IN THE STATEMENT OF THE LD AR BECAUSE HE DOES NOT SHOW US THE RELEVANT PROOF THAT THE SAID MATTER WAS PENDING BEFORE THE LD CIT(A) FOR ADJUDICATION. WE ALSO NOTICED THAT THE FOLLOWING JUDICIAL PRECED ENTS ARE AVAILABLE ON THE ISSUE UNDER CONSIDERATION: (I). BIHAR STATE HOUSING CO-OPERATIVE FEDERATION LTD. VS . COMMISSIONER OF INCOME TAX- HIGH COURT OF PATNA (2009) 315 ITR 286 THE INTEREST EARNED ON THE DEPOSITS MADE DOES NOT A RISE OUT OF ONE OR MORE OF THE ACTIVITIES SPECIFIED IN S. 80P(2)(A)(I) BUT THE INT EREST RECEIVED BY THE ASSESSEE ON THE BANK DEPOSIT IS ANCILLARY AND INCIDENTAL TO CARRYIN G ON THE BUSINESS OF PROVIDING CREDIT FACILITY TO ITS MEMBERS AND, AS SUCH, EXEMPT UNDER THE AFORESAID PROVISIONS. IT MAY BE STATED HEREIN THAT THE ASSESSEE DEPOSITS SURPLUS FU NDS AVAILABLE WITH IT IN BANKS AND EARNS INTEREST THEREON. THE NATURE OF ACTIVITY IN W HICH THE ASSESSEE IS INVOLVED CLEARLY CREATES A SITUATION WHEN SURPLUS FUND IS AVAILABLE TO IT WHICH IT DEPOSITS IN BANK AND EARNS INTEREST THEREON. THE PLACEMENT OF SUCH FUND BEING INCIDENTAL AND ANCILLARY TO CARRYING ON OF THE BUSINESS OF PROVIDING CREDIT FAC ILITY TO ITS MEMBERS BY REASON OF S. 80P(2)(A)(I), SAME IS EXEMPT UNDER THE AFORESAID PR OVISIONS.CIT VS. KARNATAKA STATE COOPERATIVE APEX BANK (2001) 169 CTR (SC) 486 : (20 01) 251 ITR 194 (SC) RELIED ON (II). GUTTIGEDARARA CREDIT CO-OPERATIVE SOCIETY LTD. VS. INCOME TAX OFFICER- HIGH COURT OF KARNATAKA (2015) : 377 ITR 464: CER TAIN SUMS OF INTEREST WERE EARNED FROM SHORT-TERM D EPOSITS AND FROM SAVINGS BANK ACCOUNT. THE ASSESSEE IS A CO-OPERATIVE SOCIETY PRO VIDING CREDIT FACILITIES TO ITS MEMBERS. IT IS NOT CARRYING ON ANY OTHER BUSINESS. THE INTEREST INCOME EARNED BY THE ASSESSEE BY PROVIDING CREDIT FACILITIES TO ITS MEMB ERS IS DEPOSITED IN THE BANKS FOR A SHORT DURATION WHICH HAS EARNED INTEREST. (PARA 7) CO-OPERATIVE SOCIETY WHICH IS CARRYING ON THE BUSIN ESS OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS, EARNS PROFITS AND GAINS OF BUSINESS BY PRO VIDING CREDIT FACILITIES TO ITS MEMBERS. THE INTEREST INCOME SO DERIVED OR THE CAPI TAL, IF NOT IMMEDIATELY REQUIRED TO BE LENT TO THE MEMBERS, THE SOCIETY CANNOT KEEP THE SAID AMOUNT IDLE. IF THEY DEPOSIT THIS AMOUNT IN BANK SO AS TO EARN INTEREST, THE SAI D INTEREST INCOME IS ATTRIBUTABLE TO THE ITA NO .621/KOL/2016 S.E.S.E. C.,E.CO.RAILWAY EMPLOYEES CO-OP.CREDIT SOCIETY LTD. A..Y.2011-12 8 PROFITS AND GAINS OF THE BUSINESS OF PROVIDING CRED IT FACILITIES TO ITS MEMBERS ONLY. THE SOCIETY IS NOT CARRYING ON ANY SEPARATE BUSINESS FO R EARNING SUCH INTEREST INCOME. THE INCOME SO DERIVED IS THE AMOUNT OF PROFITS AND GAIN S OF BUSINESS 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. (PARA 10) AMOUNT WHICH WAS INVESTED IN BANKS TO EARN INTEREST WAS NOT AN AMOUNT DUE TO ANY MEMBERS. IT WAS NOT THE LIABILITY. IT WAS NOT SHOWN AS LIABILITY IN THEIR ACCOUNT. IN FACT THIS AMOUNT WHICH IS IN THE NATURE OF PROFITS AND G AINS, WAS NOT IMMEDIATELY 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 INT EREST. THE SAID INTEREST INCOME IS ATTRIBUTABLE TO CARRYING ON THE BUSINESS OF BANKING AND THEREFORE IT IS LIABLE TO BE 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 COMMISSION ER OF INCOME TAX-III, HYDERABAD VS. ANDHRA PRADESH STATE COOPERATIVE BANK LTD., REP ORTED IN (2011) 200 TAXMAN 220/12. ORDER PASSED BY THE APPELLATE AUTHORITIES D ENYING THE BENEFIT OF DEDUCTION OF THE AFORESAID AMOUNT IS UNSUSTAINABLE IN LAW. (III). THE TOTGARS CO-OPERATIVE SALE SOCIETY LTD. VS. INCO ME TAX OFFICER- SUPREME COURT OF INDIA (2010): 322 ITR 283 ASSESSEE MARKETS THE PRODUCE OF ITS MEMBERS WHOSE S ALE PROCEEDS AT TIMES WERE RETAINED BY IT. SINCE THE FUND CREATED BY SUCH RETE NTION WAS NOT REQUIRED IMMEDIATELY FOR BUSINESS PURPOSES, IT WAS INVESTED IN SPECIFIED SEC URITIES. SUCH INTEREST INCOME WOULD COME IN THE CATEGORY OF 'INCOME FROM OTHER SOURCES' , HENCE, SUCH INTEREST INCOME WOULD BE TAXABLE UNDER S. 56 AS RIGHTLY HELD BY THE AO. A N INCOME, WHICH IS ATTRIBUTABLE TO ANY OF THE SPECIFIED ACTIVITIES IN S. 80P(2) WOULD BE E LIGIBLE FOR DEDUCTION. ASSESSEE-SOCIETY REGULARLY INVESTS FUNDS NOT IMMEDIATELY REQUIRED FO R BUSINESS PURPOSES. INTEREST ON SUCH INVESTMENTS, THEREFORE, CANNOT FALL WITHIN THE MEAN ING OF THE EXPRESSION 'PROFITS AND GAINS OF BUSINESS'. SUCH INTEREST INCOME CANNOT BE SAID ALSO TO BE ATTRIBUTABLE TO THE ACTIVITIES OF THE SOCIETY, NAMELY, CARRYING ON THE BUSINESS OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS OR MARKETING OF THE AGRICULTURAL PRODUC E OF ITS MEMBERS. WHEN THE ASSESSEE-SOCIETY PROVIDES CREDIT FACILITIES TO ITS MEMBERS, IT EARNS INTEREST INCOME. INTEREST HELD AS INELIGIBLE FOR DEDUCTION UNDER S. 80P(2)(A)(I) IS NOT IN RESPECT OF INTEREST RECEIVED FROM MEMBERS. ASSESSEE MARKETS THE AGRICUL TURAL PRODUCE OF ITS MEMBERS. IT RETAINS THE SALE PROCEEDS IN MANY CASES. IT IS THIS 'RETAINED AMOUNT' WHICH WAS PAYABLE TO ITS MEMBERS, FROM WHOM PRODUCE WAS BOUGHT, WHICH WAS INVESTED IN SHORT-TERM DEPOSITS/SECURITIES. SUCH AN AMOUNT, WHICH WAS RETA INED BY THE ASSESSEE-SOCIETY, WAS A LIABILITY AND IT WAS SHOWN IN THE BALANCE SHEET ON THE LIABILITY SIDE. THEREFORE, TO THAT EXTENT, SUCH INTEREST INCOME CANNOT BE SAID TO BE A TTRIBUTABLE EITHER TO THE ACTIVITY MENTIONED IN S. 80P(2)(A)(I) OR IN S. 80P(2)(A)(III ). THEREFORE, LOOKING TO THE FACTS AND CIRCUMSTANCES OF THIS CASE, THE AO WAS RIGHT IN TAX ING THE INTEREST INCOME, INDICATED ABOVE UNDER S. 56. (PARA 10) THE ALTERNATIVE SUBMISSION ADVANCED BY THE ASSESSEE STATING THAT, IF INTEREST INCOME IN QUESTION IS HELD TO BE COVERED BY S. 56, EVEN THEN, THE ASSESSEE-SOCIETY IS ENTITLED TO THE BENEFIT OF S. 80P(2)(A)(I) IN RESPECT OF SUCH INTER EST INCOME HAS NO MERIT. SEC. 80P(2)(A)(I) CANNOT BE PLACED AT PAR WITH EXPLN. (B AA) TO S. 80HHC, S. 80HHD(3) AND S. 80HHE(5). EACH OF THE SAID SECTIONS HAS TO BE INTER PRETED IN THE CONTEXT OF ITS SUBJECT- ITA NO .621/KOL/2016 S.E.S.E. C.,E.CO.RAILWAY EMPLOYEES CO-OP.CREDIT SOCIETY LTD. A..Y.2011-12 9 MATTER. THE SCOPE OF S. 80HHC IS DIFFERENT FROM THE SCOPE OF S. 80P, WHICH DEALS WITH DEDUCTION IN RESPECT OF INCOME OF CO-OPERATIVE SOCI ETIES. EVEN EXPLN. (BAA) TO S. 80HHC WAS ADDED TO RESTRICT THE DEDUCTION IN RESPECT OF P ROFITS RETAINED FOR EXPORT BUSINESS. THE WORDS USED IN EXPLN. (BAA) TO S. 80HHC, THEREFORE, CANNOT BE COMPARED WITH THE WORDS USED IN S. 80P WHICH GRANTS DEDUCTION IN RESPECT OF 'THE WHOLE OF THE AMOUNT OF PROFITS AND GAINS OF BUSINESS'. (PARA 11) (IV ). COMMISSIONER OF INCOME TAX VS. KARNATAKA STATE COO PERATIVE APEX BANK- SUPREME COURT OF INDIA (2001):251 ITR 194: THE ASSESSEE CO-OPERATIVE BANK IS REQUIRED TO PLAC E A PART OF ITS FUNDS WITH THE SBI OR THE RBI TO ENABLE IT TO CARRY ON ITS BANKING BUSINE SS. THIS BEING SO, ANY INCOME DERIVED FROM FUNDS SO PLACED ARISES FROM THE BUSINESS CARRI ED ON BY IT AND THE ASSESSEE HAS NOT, BY REASON OF S. 80P(2)(A)(I), TO PAY INCOME-TAX THE REON. THE PLACEMENT OF SUCH FUNDS BEING IMPERATIVE FOR THE PURPOSES OF CARRYING ON TH E BANKING BUSINESS, THE INCOME DERIVED THEREFROM WOULD BE INCOME FROM THE ASSESSEE S BUSINESS. THERE IS NOTHING IN THE PHRASEOLOGY OF THAT PROVISION WHICH MAKES IT APPLIC ABLE ONLY TO INCOME DERIVED FROM WORKING OR CIRCULATING CAPITAL.KARNATAKA STATE CO- OPERATIVE APEX BANK (JUDGMENT DT. 12TH JAN., 2000, OF THE KARNATAKA HIGH COURT IN IT REF. NO. 876-878 OF 1998) AFFIRMED; M.P. COOPERATIVE BANK LTD. VS. ADDL. CIT (1996) 134 CTR (SC) 92 : 1996 (2) SCC 541 : TC S26.2715 OVERRULED; CIT VS. BANGALORE DISTRICT COOPERATIVE CENTRAL BANK LTD. (1998) 148 CTR (SC) 226 : 1998 (6) SCC 129 : TC S26 .2714 APPROVED SANS REASONING.(PARA 6) (V) COMMISSIONER OF INCOME TAX VS. NAWANSHAHAR CENTRAL CO-OP. BANK LTD. SUPREME COURT OF INDIA (2012): 349 ITR 689 THE INCOME EARNED BY THE ASSESSEE WHICH WAS DERIVED FROM UNDERWRITING THE ISSUE OF BONDS AND INVESTMENTS IN PSEB BONDS IS IN THE NATUR E OF INCOME FROM BANKING BUSINESS AND HENCE QUALIFIED FOR DEDUCTION U/S 80P(2)(A)(I) OF THE INCOME TAX ACT, 1961. THE ASSESSEE UNDER CONSIDERATION IS NOT A CO-OPERAT IVE BANK THEREFORE DECISION IN NAWANSHAHAR CENTRAL CO-OP. BANK LTD AND KARNATAKA STATE COOPERATIVE APEX BANK ( SUPRA) ARE NOT APPLIC ABLE, AS THE FACTS AND NATURE OF BUSINESS IS DIFFERENT AND THESE JUDGM ENTS CAN BE DISTINGUISHED ON FACTS. BESIDES, THE FACTS NARRATED IN THE JUDGM ENT OF HON`BLE S.C. IN THE TOTGARS CO-OPERATIVE SALE SOCIETY LTD. VS. INCOME T AX OFFICER- (2010): 322 ITR 283, ARE DISTINGUISHABLE, IN THIS CASE ASSE SSEE WAS CARRYING ON THE BUSINESS OF PROVIDING CREDIT FACILITIES TO ITS MEMB ERS AND MARKETING OF THE AGRICULTURAL PRODUCE OF ITS MEMBERS U/S 80P(2)(A)(III), HENCE DO ES NOT APPLICABLE SQUARELY TO THE FACTS OF THE ASSESSEE UNDER CONSIDERATION. THE LD. AR FOR THE ASSESSEE HAS CITED A JUDGMENT, W HICH IS HELD BY THE HONBLE CALCUTTA HIGH COURT IN ASSESSEE`S OWN CASE IN CIT VS SOUTH EASTERN RAILWAY EMPLOYEES CO-OP CREDIT SOCIETY LTD. IN ITA NO.484 O F 2007 WHEREIN THE COURT HAS TAKEN THE FOLLOWING VIEW: IN THAT VIEW OF THE MATTER, THE QUESTION RAISED F OR DECISION IS ANSWERED IN THE AFFIRMATIVE AND IN FAVOUR OF THE REVENUE TO THE EXT ENT AS INDICATED ABOVE. THE APPEAL IS ALLOWED. THE MATTER IS , HOWEVER, REMANDED TO THE A SSESSING OFFICER (A) TO WORK OUT ITA NO .621/KOL/2016 S.E.S.E. C.,E.CO.RAILWAY EMPLOYEES CO-OP.CREDIT SOCIETY LTD. A..Y.2011-12 10 THE INTEREST EARNED U/S 63 AND 64 OF MULTI STATE CO OPERATIVE SOCIETIES ACT, 2002 AND TO ALLOW THE BENEFIT U/S 80-P AND (B). TO ASCERTAIN TH E INTEREST PAID TO THE MEMBERS FOR THE PURPOSE OF EARNING THE SUMS OF RS. 99 LAKHS AND 1.2 CRORES ON ACCOUNT OF INTEREST FROM INVESTMENTS. SUCH INTEREST SHALL BE DEDUCTED FROM T HE EXPENSES OF ELIGIBLE BUSINESS. CONSEQUENT INCREASED AMOUNT OF PROFITS OF ELIGIBLE BUSINESS AS DISCUSSED ABOVE, SHALL BE THE AMOUNT OF DEDUCTION AVAILABLE TO THE ASSESS EE U/S 80P OF THE ACT. RESPECTFULLY, FOLLOWING THE JUDGMENT OF HON`BLE HIG H COURT OF CALCUTTA, IN ASSESSEE`S OWN CASE, WE ARE OF THE VIEW THAT THIS ISSUE REQUIR ES FRESH EXAMINATION AT THE END OF THE AO. ACCORDINGLY WE SET ASIDE THE ORDER OF THE L D. CIT AND RESTORE THIS ISSUE TO THE FILE OF THE AO WITH THE DIRECTION TO ASCERTAIN THE DEDUCTION U/S 80P OF THE ACT, IN THE LIGHT OF THE DISCUSSION IN ASSESSEE`S OWN CASE, SU PRA. 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE ON THIS ISSUE IS ALLOWED FOR STATISTICAL PURPOSES. 14. THE GROUND NO.4, RELATES TO WHETHER INCOME EARNED FROM THE HOUSE BUILDING LOAN TO THE STAFF, QUALIFY FOR DEDUCTION U/S 80P OF THE ACT OR NOT. 15.THE LD. AR FOR THE ASSESSEE HAS STATED THAT THE STAFF OF THE COOPERATIVE SOCIETY WHO ARE WORKING FOR THE SOCIETY AND THEIR OBJECT IS TO ENHANCE THE BUSINESS ACTIVITIES OF THE SOCIETY. THEREFORE THE HOUSE BUILDING LOAN PROVIDED TO THE STAFF SHOULD BE AVAILABLE AS DEDUCTION U/S 80P OF THE ACT IN THE HANDS OF THE AS SESSEE. 16. ON THE OTHER HAND THE LD. DR FOR THE REVENUE HAS STATED THAT THIS LOAN TO THE STAFF I.E. BUILDING LOAN TO THE STAFF DOES NOT FALL IN TH E BUSINESS INCOME ATTRIBUTABLE TO THE BUSINESS U/S 80P OF THE ACT AND THEREFORE THE ASSES SEE IS NOT ELIGIBLE TO CLAIM DEDUCTION ON ACCOUNT OF HOUSING LOAN TO THE STAFF. 17. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND WE NOTICED THAT THERE IS MERIT IN THE SUBMISSIONS OF THE LD. DR WHO HAS RIGHTLY STATED THAT THE BUILDING LOAN TO THE STAFF DOES NOT INCLUDE UND ER THE DEFINITION OF INCOME ITA NO .621/KOL/2016 S.E.S.E. C.,E.CO.RAILWAY EMPLOYEES CO-OP.CREDIT SOCIETY LTD. A..Y.2011-12 11 ATTRIBUTABLE TO THE BUSINESS AND IS NOT ELIGIBLE FO R DEDUCTION U/S 80P. WE HAVE ALSO CONSULTED SECTION 80P OF THE ACT, WHERE NOTHING IS MENTIONED ABOUT THE BUILDING LOAN TO THE STAFF ,CLAIMED U/S 80P OF THE ACT. THEREFORE IN VIEW OF THE ABOVE CITED FACTS, WE CONFIRM THE ORDER OF CIT. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE ON THIS GROUND IS DISMISSED. 19. THE NEXT GROUND NO. 5 RELATES WHETHER THE RE CEIPT FROM THE MEMBERS IN RESPECT OF PRINTING AND STATIONERY COST QUALIFY FOR DEDUCTI ON U/S 80P OF THE ACT OR NOT. 20. THE LD. AR FOR THE ASSESSEE HAS SUBMITTED TH AT DURING THE YEAR THE ASSESSEE SOCIETY HAS RECEIVED FROM ITS MEMBERS THE COST OF P RINTING AND STATIONERY WHICH WAS CREDITED BY THE ASSESSEE SOCIETY TO THE MISCELLANEO US ACCOUNT. SINCE THIS IS TRANSACTION WITH THE MEMBERS OF THE SOCIETY AND HENCE IT SHOULD BE AVAILABLE FOR DEDUCTION U/.S 80P OF THE ACT. 21. ON THE OTHER HAND, THE LD. DR FOR THE REVEN UE HAS STRONGLY DEFENDED THE ORDER OF THE CIT ON THIS ISSUE AND HE HAS RELIED ON THE ASSE SSMENT ORDER. THE LD. DR FURTHER MENTIONED THAT THE AMOUNT RECEIVED FROM THE MEMBERS ON ACCOUNT OF PRINTING AND STATIONERY COST, IS NOT AN INCOME OF THE ASSESSEE COOPERATIVE SOCIETY. THEREFORE IT DOES NOT QUALIFY FOR DEDUCTION U/S 80P OF THE ACT. FURTH ER, SECTION 80P DOES NOT TALK ABOUT SUCH TYPE OF DEDUCTION AND THERE IS NO SATISFACTOR Y COST WHICH IS BEING RECOVERED FROM ITS MEMBERS CANNOT BE ATTRIBUTABLE TO THE ASSESSEE SOCIETY. HENCE THE DEDUCTION U/S 80P OF THE ACT SHOULD NOT BE ALLOWED. 22. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIALS AVAILABLE ON RECORD. WE NOTICED THAT THERE IS MERIT IN THE SUBMISSIONS OF T HE LD. DR FOR THE REVENUE AS HE HAS RIGHTLY POINTED OUT THAT THE COST RECOVERED FROM TH E MEMBERS AND THERE IS NO SATISFYING EXPENDITURE AND IT CANNOT BE THE INCOME IN THE HAND S OF THE ASSESSEE COOPERATIVE SOCIETY. SECTION 80P OF THE ACT DOES NOT TALK ABOUT SUCH TYPE OF INCOME WHICH CAN BE ITA NO .621/KOL/2016 S.E.S.E. C.,E.CO.RAILWAY EMPLOYEES CO-OP.CREDIT SOCIETY LTD. A..Y.2011-12 12 ATTRIBUTABLE TO THE BUSINESS OF THE ASSESSEE, COOPE RATIVE SOCIETY. HENCE WE DO NOT HESITATE TO CONFIRM THE ORDER OF CIT. 23. IN THE RESULT, THE APPEAL FILED BY THE ASSE SSEE ON THIS GROUND, IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 28.09.2016. SD/- SD/- [S.S.VISWANETHRA RAVI] [DR.ARJUN LAL SAINI] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 28.09.2016. R.G.(.P.S.) COPY OF THE ORDER FORWARDED TO: 1 . S.E., S.E.C., E.CO.,RAILWAY EMPLOYEES CO-OPERATIVE CREDIT SOCIETY LTD., 93, CIRCULAR GARDEN REACH ROAD, KOLKATA-700043. 2 PR.C.I.T.-10, KOLKATA. 3 . CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY, BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES