ITO v. BEML Employees Coop. Society Ltd.

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The Tax Publishers2016 TaxPub(DT) 4592 (Bang-Trib) ITO v. BEML Employees Co-op. Society Ltd. INCOME TAX ACT, 1961 --Deduction under section 80P(2)(a)(i)--Co-operative societyInterest income deposited with banks for short duration--Interest on such deposits--Where a credit co-operative society deposited its interest income lying idle, with banks for short duration, consequent interest income on such deposits was attributable to society's business and was eligible for deduction under section 80P(2)(a)(i).--Assessee was a co-operative society providing credit facilities to its members. It was not carrying out any other business. The interest income derived from members was deposited in the banks for short duration. The question arose for consideration was whether interest earned on such short-term deposits was attributable to assessee's business and if same was eligible for deduction under section 80P(2)(a)(i). *Held:* Interest income derived from providing credit facilities to members or the capital, if not immediately required to be lent to the members, could not be kept idle. Such amount as deposited in the bank so as to earn interest, the said interest income was attributable to the profits and gains of the business of providing credit facilities to members only and was eligible for deduction under section 80P(2)(a)(i). Income Tax Act, 1961 Section 80P(2)(a)(i) *Relied:*Totgar's Co-operative Sale Society Ltd. v. ITO (2010) 322 ITR 283 (SC). *REFERRED :* FAVOUR : In assessee's favour A.Y. : IN THE ITAT, BANGALORE BENCH ABRAHAM P. GEORGE, A.M. ITO v. BEML Employees Co-op Society Ltd. ITA No. 435/Bang/2016 26 August, 2016 Assessee by: G. Venkatesh, Advocate Revenue by: Bipin C. N, JCIT ORDER *Abraham P. George, A.M.* In this appeal filed by Revenue, its grievance is that Commissioner (Appeals) allowed the assessee deduction claimed by it under section 80P(2)(a)(i) of the Income Tax Act, 1961 (the Act in short), taking a view that assessee was a cooperative society carrying on banking business. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2016 TaxPub(DT) 4592 (Bang-Trib)

ITO v. BEML Employees Co-op. Society Ltd.

INCOME TAX ACT, 1961

--Deduction under section 80P(2)(a)(i)--Co-operative societyInterest income deposited with banks for short duration--Interest on such deposits--Where a credit co-operative society deposited its interest income lying idle, with banks for short duration, consequent interest income on such deposits was attributable to society's business and was eligible for deduction under section 80P(2)(a)(i).--Assessee was a co-operative society providing credit facilities to its members. It was not carrying out any other business. The interest income derived from members was deposited in the banks for short duration. The question arose for consideration was whether interest earned on such short-term deposits was attributable to assessee's business and if same was eligible for deduction under section 80P(2)(a)(i). Held: Interest income derived from providing credit facilities to members or the capital, if not immediately required to be lent to the members, could not be kept idle. Such amount as deposited in the bank so as to earn interest, the said interest income was attributable to the profits and gains of the business of providing credit facilities to members only and was eligible for deduction under section 80P(2)(a)(i).

Income Tax Act, 1961 Section 80P(2)(a)(i)

Relied:Totgar's Co-operative Sale Society Ltd. v. ITO (2010) 322 ITR 283 (SC).

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

IN THE ITAT, BANGALORE BENCH

ABRAHAM P. GEORGE, A.M.

ITO v. BEML Employees Co-op Society Ltd.

ITA No. 435/Bang/2016

26 August, 2016

Assessee by: G. Venkatesh, Advocate

Revenue by: Bipin C. N, JCIT

ORDER

Abraham P. George, A.M.

In this appeal filed by Revenue, its grievance is that Commissioner (Appeals) allowed the assessee deduction claimed by it under section 80P(2)(a)(i) of the Income Tax Act, 1961 (the Act in short), taking a view that assessee was a cooperative society carrying on banking business.