Sri. Biluri Gurubasav Pattin Sahakari Sangh, Bagalkot V. ITO, Bagalkot

CO 4/BANG/2012

• Counselvise Citation: [2012] 122 COUNSELVISE.COM (IT) 7323 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 12 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 07-06-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-06-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 24-02-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NARESH SAKA
• Assessee Lawyers: ASHOK A KULKARNI
• Keywords: Business income
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BANGALORE BANGALORE BANGALORE BENCH BENCH BENCH BENCH C CC C BEFORE BEFORE BEFORE BEFORE SHRI SHRI SHRI SHRI N. N. N. N. BARAT BARAT BARAT BARATH HH HVAJA SANKAR, VICE VAJA SANKAR, VICE VAJA SANKAR, VICE VAJA SANKAR, VICE- -- -PRESIDENT PRESIDENT PRESIDENT PRESIDENT A AA AND NDND ND SHRI SHRI SHRI SHRI N.V.VASUDEVAN N.V.VASUDEVAN N.V.VASUDEVAN N.V.VASUDEVAN, JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER , JUDICIAL MEMBER ITA NO.168/PNJ/2010 (ASSESSMENT YEAR: 2007-08) INCOME-TAX OFFICER, WARD-1, BAGALKOT. APPELLANT VS. SHRI BILURU GURUBASAV PATTIN SAHAKARI SANGH NIYAMIT, BAGALKOT. RESPONDENT PAN: PAN: PAN: PAN: AABAS 7016 A AND AND AND AND CROSS OBJN.NO.4/BANG/2012 (IN ITA NO.168/PNJ/2010) (ASSESSMENT YEAR: 2007-08) SHRI BILURU GURUBASAV PATTIN SAHAKARI SANGH NIYAMIT, BAGALKOT. CROSS-OBJECTOR VS. INCOME-TAX OFFICER, WARD-1, BAGALKOT. RESPONDENT REVENUE BY: SHRI NARESH SAKA, JCIT. ASSESSEE BY : SHRI ASHOK A.KULKARNI. DATE OF HEARING: 07-06-2012 DATE OF PRONOUNCEMENT: 07 - 06 - 2012 O R D E R O R D E R O R D E R O R D E R PER PER PER PER N. BARATHVAJA SANKAR, VP N. BARATHVAJA SANKAR, VP N. BARATHVAJA SANKAR, VP N. BARATHVAJA SANKAR, VP: :: : THE APPEAL NO.168/PNJ/2010 IS BY THE REVENUE AND T HE CROSS OBJN.NO.4/BANG/2012 IS BY THE ASSESSEE-SHRI B ILURU ITA NO.168/PNJ/2010 PAGE 2 OF 4 GURUBASAV PATTIN SAHAKARI SANGH NIYAMIT, BAGALKOT, FOR THE ASSESSMENT YEAR 2007-08 AGAINST THE APPELLATE ORDER DATED 25-5-2010 OF THE CIT(A), BELGAUM. 2. THE REVENUES EFFECTIVE GROUNDS READ AS UNDER: 2. THE CIT(A) ERRED IN HOLDING THAT INTEREST EARNED BY THE SOCIETY ON INVESTMENTS MADE IN PRIVATE COMPANIES WAS BUSINESS INCOME. 3. THE CIT(A) ERRED IN CONCLUDING THAT INCOME FROM INVESTMENT OF FUNDS IS BUSINESS INCOME WHEN THE SOCIETY IS NOT IN THE BUSINESS OF BANKING BUT PROVIDING CREDIT FACILITY TO ITS MEMBERS. 4. THE CIT(A) ERRED IN CONCLUDING THAT THE INTERES T INCOME IS ELIGIBLE FOR DEDUCTION U/S.80P WHEN THE INTEREST IS IN THE NATURE OF INCOME FROM OTHER SOURCES. 3. THE ASSESSEES EFFECTIVE GROUND IN THE CROSS-OB JECTION READS AS UNDER: 2. ASSUMING WITHOUT ADMITTING THAT THE DISPUTED AMOUNT OF INTEREST IS NOT ENTITLED TO EXEMPTION U/S 80P(2)(A)(I), IN THE ALTERNATIVE AND WITHOUT PREJUD ICE SUCH INCOME IS EXEMPT IN THE HANDS OF THE ASSESSEE ON GROUNDS OF MUTUALITY AS INTEREST HAS BEEN RECEIV ED FROM THE INSTITUTIONS WHICH ARE MEMBERS OF THE SOCIETY AND THERE IS IN RESPECT OF THE SAID SUM TOT AL IDENTITY BETWEEN CONTRIBUTORS AND PARTICIPANTS. 4. AT THE TIME OF HEARING, THOUGH IT IS REVENUES APPEAL, LEARNED COUNSEL FOR THE ASSESSEE PLACED ON RECORD C OPY OF THE ORDER U/S 263 OF THE INCOME-TAX ACT, 1961 [HEREINAF TER REFERRED TO AS 'THE ACT'] DATED 7-2-2012 AND PLEADED THAT BY TH AT ORDER, THE CIT SET ASIDE THE ORDER PASSED U/S 143(3) WITH A DI RECTION TO THE AO TO DECIDE THE ISSUE ON MERITS AFTER GIVING OPPOR TUNITY OF HEARING TO THE ASSESSEE. HE PLEADED THAT THUS THE BASIC ORDER U/S 143(3) HAS BEEN SET ASIDE BY THE CIT AND RESTORED T O THE AO. IN VIEW OF THE SAME, THE ORDER PASSED BY THE CIT(A) ON THE ORDER U/S ITA NO.168/PNJ/2010 PAGE 3 OF 4 143(3) HAS NO LEGS TO STAND SINCE THE ISSUE HAS BEE N RESTORED TO THE AO BY THE CIT. IN OTHER WORDS, HE PLEADED THAT THE REVENUES APPEAL AND THE ASSESSEES CROSS-OBJECTION, HAVE BEC OME INFRUCTUOUS IN VIEW OF 263 ORDER OF THE CIT. 5. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESEN TATIVE AND CONSIDERED THE FACTS AND MATERIALS ON RECORD. WE FIND THAT THE ORDER U/S 143(3) WAS PASSED ON 29-12-2009 AND THERE AFTER THE ORDER U/S 263 WAS PASSED ON 7-2-2012 RESTORING THE MATTER BACK TO THE FILE OF THE AO WITH CERTAIN DIRECTIONS. IN THE MEANWHILE, THE APPEAL AGAINST THE ORDER U/S 143(3) WAS DISPOSED OF BY THE CIT(A) ON 25-5-2010 WHO WAS, PERHAPS, NOT AWARE OF THE 263 ORDER. IN THIS VIEW OF THE MATTER, WE FIND THAT THERE IS FORC E IN THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE. THUS, THE APPEAL AND THE CROSS OBJECTION HAVE BECOME INFRUCTU OUS IN VIEW OF THE 263 ORDER PASSED IN THE CASE OF THE ASSESSEE FO R THE SAME ASSESSMENT YEAR RESTORING THE MATTER BACK TO THE FI LE OF THE AO. THUS, WE DISMISS THE APPEAL OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE. IN THE RESULT, THE APPEAL OF THE REVENUE AND THE C ROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH JUNE, 2012 . SD/- SD/- (N. (N. (N. (N.V. V.V. V.VASUDEVAN VASUDEVAN VASUDEVAN VASUDEVAN) )) ) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER (N.BARATHVAJA SANKAR) (N.BARATHVAJA SANKAR) (N.BARATHVAJA SANKAR) (N.BARATHVAJA SANKAR) VICE VICE VICE VICE- -- -PRESIDENT PRESIDENT PRESIDENT PRESIDENT EKS ITA NO.168/PNJ/2010 PAGE 4 OF 4 COPY TO : COPY TO : COPY TO : COPY TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A) CONCERNED 4. CIT 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE