COMMISSIONER OF INCOME TAX BAREILLY Vs. PILIBHIT ZILA

JUDGEMENT

(1.) HEARD Sri Dhananjai Awasthi, for the appellant.

(2.) THIS Income Tax Appeal under Section 260 -A of the Income Tax Act, 1961 (in short the Act) arises out the judgment dated 21.07.2008 passed by the Income Tax Appellate Tribunal, Lucknow Bench 'B', Lucknow in ITA No. 502/LUC/2008, relating to the assessment year 2005 -06.

(3.) THE respondent assessee is a Cooperative Society, engaged in banking business. The assessee filed its return on 27.10.2005, declaring 'nil' income. It computed net profit at Rs.1,16,24,896/ -, and claimed deduction of total income under Section 80 P (2) (a) (i) of the Act. The AO found that the assessee has earned income on investment including interest & discount; commission, exchange & brokerage and other receipts - totaling Rs.8,63,80,488/ -. On its long term investment, as on 31.03.2003, in Government securities; share in co -operative institutions; FDRs in U.P. Cooperative Bank and FDRs in Punjab National Bank aggregating to Rs.22,34,10,316/ -, it earned interest income of Rs.1,71,72,035. The assessee's income was worked out by multiplying net profit and FDRs interest divided by gross receipts at Rs.20,01,240/ -.