ITO v. Kerala State Coop. Bank Ltd.

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The Tax Publishers2013 TaxPub(DT) 0092 (Coch-Trib) : (2012) 139 ITD 0601 : (2013) 151 TTJ 0537 : (2013) 082 DTR 0081 INCOME TAX ACT, 1961 Deduction under section 80P --Deduction under section 80P--Banking business Rental income on letting out of commercial asset--assessing officer disallowed the deduction claimed under section 80P by assessee-banking co-operative society, in respect of rental income on letting out of commercial asset. *Held:* Was justified as letting of property was not connected with banking activity or providing credit facility nor the same was specified in sections 80P(2)(a)(i) and 80P(2)(c). It was independent activity and, therefore, assessed as 'income from house property'. Income Tax Act, 1961, Section 80P In The ITAT. Cochin Bench N. R. S. Ganesan, J.m. & B. R. Baskaran, A.m. ITO v. Kerala State Co-op. Bank Ltd. IT Appeal No. 546 (Coch.) of 2010 A.Y. 2006-07 12 October, 2012 Appellant by : Veni Raj Respondent by : Devarajan ORDER *N. R. S. Ganesan, J.M.* This appeal of the revenuer is directed against the order of the Commissioner of Income Tax(A)-I, Trivandrum dated 14-07-2010 for the assessment year 2006-07. 2. The only issue arises for consideration is deduction under section 80P(2)(a)(i) of the Act in respect of rental income received by the taxpayer. 3. Ms. Veni Raj, the learned Departmental Representative submitted that the taxpayer has received rental income of Rs. 27,12,152 and claimed the same as deduction under section 80P(2)(a)(i). Referring to the provisions of section under section 80P(2)(a)(i) the learned Departmental Representative pointed out that the income of the taxpayer from banking activity or such other activity which is attributable to the banking activity alone is eligible for deduction under section 80P(2)(a)(i) of the Act. Letting out of property, according to the learned Departmental Representative, is not the business of the taxpayer. Moreover, letting out of the property is not in any way attributable to banking business. Therefore, rental income received by the taxpayer cannot be treated as business income for the purpose of granting deduction under section 80P(2)(a)(i). The learned Departmental Representative placed her reliance on the judgment of the jurisdictional High Court in the case of Kottayam Co-operative Land Mortgage Bank Ltd. v. CIT (1988) 172 ITR 443 (Ker.) : 1988 TaxPub(DT) 666 (Ker-HC) and also the judgment of the Apex Court in the case of Totgars Co-operative Sale Society Ltd. v. CIT (2010) 322 ITR 283 (SC) : 2010 TaxPub(DT) 1466 (SC). SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2013 TaxPub(DT) 0092 (Coch-Trib) : (2012) 139 ITD 0601 : (2013) 151 TTJ 0537 : (2013) 082 DTR 0081

INCOME TAX ACT, 1961 Deduction under section 80P

--Deduction under section 80P--Banking business Rental income on letting out of commercial asset--assessing officer disallowed the deduction claimed under section 80P by assessee-banking co-operative society, in respect of rental income on letting out of commercial asset. Held: Was justified as letting of property was not connected with banking activity or providing credit facility nor the same was specified in sections 80P(2)(a)(i) and 80P(2)(c). It was independent activity and, therefore, assessed as 'income from house property'.

Income Tax Act, 1961, Section 80P

In The ITAT. Cochin Bench

N. R. S. Ganesan, J.m. & B. R. Baskaran, A.m.

ITO v. Kerala State Co-op. Bank Ltd.

IT Appeal No. 546 (Coch.) of 2010

A.Y. 2006-07

12 October, 2012

Appellant by : Veni Raj

Respondent by : Devarajan

ORDER

N. R. S. Ganesan, J.M.

This appeal of the revenuer is directed against the order of the Commissioner of Income Tax(A)-I, Trivandrum dated 14-07-2010 for the assessment year 2006-07.

2. The only issue arises for consideration is deduction under section 80P(2)(a)(i) of the Act in respect of rental income received by the taxpayer.

3. Ms. Veni Raj, the learned Departmental Representative submitted that the taxpayer has received rental income of Rs. 27,12,152 and claimed the same as deduction under section 80P(2)(a)(i). Referring to the provisions of section under section 80P(2)(a)(i) the learned Departmental Representative pointed out that the income of the taxpayer from banking activity or such other activity which is attributable to the banking activity alone is eligible for deduction under section 80P(2)(a)(i) of the Act. Letting out of property, according to the learned Departmental Representative, is not the business of the taxpayer. Moreover, letting out of the property is not in any way attributable to banking business. Therefore, rental income received by the taxpayer cannot be treated as business income for the purpose of granting deduction under section 80P(2)(a)(i). The learned Departmental Representative placed her reliance on the judgment of the jurisdictional High Court in the case of Kottayam Co-operative Land Mortgage Bank Ltd. v. CIT (1988) 172 ITR 443 (Ker.) : 1988 TaxPub(DT) 666 (Ker-HC) and also the judgment of the Apex Court in the case of Totgars Co-operative Sale Society Ltd. v. CIT (2010) 322 ITR 283 (SC) : 2010 TaxPub(DT) 1466 (SC).