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1 - 10 of 23 (0.42 seconds)Section 56 in The Banking Regulation Act, 1949 [Entire Act]
State Bank Of India (Sbi) Employees ... vs Commissioner Of Income Tax, Ahmedabad 1 on 11 November, 2016
Further the Ld. CIT(A)
has referred to the decision of Hon'ble Gujarat High Court in case of SBI Vs. CIT
(2016) 389 ITR 578, Hon'ble Karnataka High Court in case of PCIT Vs. Totagars
Co-operative Sale Society [2017] 395 TTR 611 and some other decisions. It may
be noted that in the decision of Hon'ble Supreme Court, Hon'ble Gujarat High
Court and Hon'ble Karnataka High Court it is stated that the word 'whole of the
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ITA No. 10/JPR/2024
Reserve Bank Coop. Society Ltd.v. ITO
amount of profit & gains from business' used in section 80P(2)(a) emphasize that
the income in respect of which deduction is sought must constitute the
operational income and not the other income which accrues to the society. In this
connection it may be noted that it is not a case that the surplus funds has been
invested in FDR. In fact in course of carrying out its activity of providing credit
facility to its members, it receives the funds from its members who have the
capacity to lend and out of that fund the amount is advanced to other members
who need the fund. Where the funds received is more than the amount
advanced, the balance funds is invested in FDR so that the interest received
from the advance given/ FDRs made can be utilized to service the interest cost of
the funds provided by the members. Thus, the interest on FDR constitutes
operational income and therefore such income is business income and not
income from other sources eligible for deduction u/s 80P(2)(a)(i)."
M/S The Totgars Co-Operative Sale ... vs The Income Tax Officer on 30 September, 2008
10. The Hon'ble Supreme Court has observed that interest on such
FDR's investments, cannot fall within the meaning of the expression profits
and gains of business and that such interest income cannot be said to be
attributable to the activities of the society, namely, carrying on the business
of providing credit facilities to its members or marketing of agricultural
produce of its members. The court has held that when the assessee
society provides credit facilities to its members, it earns interest income.
The interest which accrues on funds not immediately required by the
assessee for its business purposes and which has been invested in
specified securities as "investment" are ineligible for deduction under
section 80P(2)(a)(i) of the Act. Thus, in the light of the principles enunciated
by the Supreme Court in Totgar's Co-operative Sale Society (supra), in
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ITA No. 10/JPR/2024
Reserve Bank Coop. Society Ltd.v. ITO
case of a society engaged in providing credit facilities to its members,
income from investments in FDRs made in banks does not fall within any of
the categories mentioned in section 80P(2)(a) of the Act. However, section
8OP(2)(d) of the Act specifically exempts interest earned from funds
invested in co-operative societies. Therefore, to the extent of the interest
earned from investments made by it with any co-operative society, a co-
operative society is entitled to deduction of the whole of such income under
section 8OP(2)(d) of the Act. However, interest earned from investments
made in any bank, not being a cooperative society, is not deductible under
section 8OP(2)(d) of the Act. From the Impugned order, it can be seen that
similar view has been taken by various High Courts that interest income of
from FDRs maintained with co-operative banks is not income from
business but is to be treated as 'income from other sources and is,
therefore, not eligible for deduction u/s 80P(2)(a)(i) and 8OP(2)(d) of the
Act.
Kerala State Co-Operative ... vs The Assessing Officer, Trivandrum on 14 September, 2023
Thus, the interest received by the appellant
amounting to Rs. 2,31,59,253/- from Baroda Rajasthan Gramin Bank Ltd, a
Regional Rural Bank and not a co-operative bank would not be allowable
deduction u/s 80P(2)(d) of the Act as this entity is not a cooperative society
as provided u/s 80P(2)(d) of the Act, in the light of the latest judgement of
the Apex Court in the case of "Kerala State Co-Operative Agricultural &
Rural Development Bank Ltd. v. Assessing Officer", (Supra).