Itta/338/2010 Of Commissioner Of Income Tax-Ii v. M/S. A.p. Mahesh Co-Op Urban Bank Ltd

HIGH WEDNESDAY [,THE NINTH DAY ] " iiii lrousAND AND rwENrY FlvE PRESENT THE HONOURABLE [J.USTICE ][P'SAM ] ANDTHE HoNouRABLE [sRl ]'rusilEilranslNc [RAo ][NANDIKoNDA]INCOMETAX TRIBUN PEAL [N]O: 338 lncome [Tax Tribunal ][Appeal ][Under ][Sectron 260A ][of ][the ][lncome ][Tax ][Act'1961]in.trn [No'71S/Hvd/2007 ][for ][the]aoainst the [order ][dated;:ffioo;;r;."0 ]Aisessment [Year ][2004-20"0; ][;;th; ][fiie ][of ][tne ][lncome ][Tax ][Appellate ][Tribunal']ftyOeraOaa [Bench'B', ][HYderabad'] Between: Commissioner [of ][lncome ][Tax-ll" ][Hyderabad] ...APPELLANT AND M/s. A.P. [Mahesh Co-op Urban ][Bank ][Ltd'' ][5-3-989' Sherza Estate' Nizam Shahi]Road, [HYderabad] ...RESPONDENT Counsel [for the ][Appellant: ][SMT'B'SAPNA ][REDDY (SC ] [TAX)] Counsel [for the ][Respondent: ] The Court [delivered the ][following: ] HONOURABLE SRIJUSTICE P.SAM KOSHY H.N,BLE sRr JUsrrcE *,tffi*" RAo NANDTK.NDA INCOME TAX TRIBUNAL APPEAL NO.338 OF 2O1O IUDGMENT: (per Hon,ble Sri lustice p.Sam Koshy) The present appeal has been filed under Section 260_A of Irrcome Tax AcL 7967 (for short, the ,.Act,) assailfurg the orderpassed by Income Tax Appellate Tribunal, Hyderabad Bench_B,passed by Income Tax Appellate Tribunal, Hyderabad Bench_B,Hyderabad (for shorr [,,Tribunal,,) ]in ITA No.Z75/Hyd/07, dated37.12.2001 for the Assessment year 2004_05.2004_05. 2. The Tribunal Tribunal dismissed the appeal preferred by the Revenue,Revenue,confirming the order dated 0g.03.2007 passed by the Commissionerof Income Tax (Appeals), Hyderabad. The Tribunal Tribunal dismissed the appeal preferred by the Revenue,Revenue,preferred by the Revenue,Revenue, 3. The question of law raised was, whether of law raised was, whether law raised was, whether raised was, whether on the facts andthe facts andfacts andandcircumstances, the assessee is entitled to claim deduction underSection 80p(2)(a)(i) of the Income Tax Act, 1961, mrespect of incomederived from the investments made out of non_statutory andvoluntary reserves. The question of law raised was, whether of law raised was, whether law raised was, whether raised was, whether on the facts andthe facts andfacts andand PSK,J [&]ITTA No [j3&of20l0] 4. Today, [when ][the ][matter ][is ][taken ][up ][for ][hearing' ][Iearned]counsel appearing [on ][either ][side ][fairly ][conced'ed ][to ][the ][fact ][that ][the]issue involved [in ][the ]Present [case ][already ][stands decided ][by ][the]Division [Bench ][of ][this ][High ][Court ][in ][the ][case ][of ][Commissioner ][of]Income-taxv.AndhraPradeshStateCo-operativeBankLtd.,rwherein [in paragraph-11, it ][has been ][held ][as ][under:] "11. Section 80P [of ][the ][Act ][grants deduction ][in ][respect ][of]various categories [of ][income ][of ][a ][co-operative society' ][If]any co-operative [society ][carries on the ][busir-ress ][of ][banking']theinterestincomereceivedbyaco-operativesocietyonitsinvestment/ [deposits ][is ][aLtributable ][to ][banking ][business']The provision [does ][not make ][any ][distinction ][in ][so ][Iar ][as ][the]interest earned [by ][deposit ][in ][a ][bank and ][interest ][earned ][on]the compulsive [deposit ][which ][is ][made ][as ][required ][under]the relevant [statute. ][It ][is ][no ][doubt ][true ][that ][a ][co-operative]society [may ][be required ][to ][earmark some ][portion ][of ][its]for [exclusive ][deposit ][in ][Government ][prescribed]capital Securitiesorbanks.Aco-operativesocietymayearnprofitsby way [of ][interest ][by parking their ][funds ][in ][high-yielding]deposits [or ][may ][earn income ][by ][circulating ][its ][capital]among [its ][members ][in ][the course ][of ][their banking ][business']All the income [from ][banking ][business ][which ][is referable ][to]Section 80P(2)(a)(i) [o{ the ][Act would quaiify ][for ][deduction]under the [Act."] t (zorl) g:o trn srs ..-1.- PSK,J & N?,{R,JITTA No.3j8 of20t0ITTA No.3j8 of20t0 3 t (zorl) g:o trn srs ..-1.- PSK,J & N?,{R,JITTA No.3j8 of20t0ITTA No.3j8 of20t0 3 5. Given the said decision passed by this Court in the case ofCommissioner of Income-Tax (supra), we find that the assessee isalso entitled to claim exemprion under Section gOp(2)(a)(i) of the Act.The question of Iaw stands decided against the Revenue and infavour of the assessee. 6Accordingly, the Appeal stands dismissed. There shall be noorder as to costsorder as to costs Pending miscellaneous applications, if any, shall stand closed. SD/- A.V.S. PRASADEUTY REGISTRAR,\,Rt!ISECTION OFFICER //TRUE COPY// To, The lncome Tax Appellate Tribunal, Hyderabad Bench ,8., Hyderabad. tr"t t"? to SMT B SAPNA REDDY (sc FoR tNCoME rAX) Advocate 2 One CC to SRt. y RAINAKAR Advocate tOpUCltOpUCl 3 4Two CD Copies TPK/gh fir HIGH COURT DATED:09 t}tt2O2S JUDGMENTITTA.No.338 of 2O1O ITTA IS DISMISSED -a'- [ll i,,]t t'\10 sEP 2025+-f,'l) t.-S I.AT C['rr:L)]