The Dhanera Nagrik Sahkari Mandli Ltd., Banaskantha V. The ACIT.,B.K.Circle, Palanpur

CO 41/AHD/2013

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 1651 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 8 month(s) 28 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 08-12-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 02-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 11-03-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: N C AMIN

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ./ ITA NO. 2863/AHD/2012 & CO NO.40/AHD/2013 / ASSESSMENT YEAR: 2007-08 ACIT, B.K. CIRCLE PALANPUR .. APPELLANT VS THE DHANERA NAGRIK SAHKARI MADLI LTD. MARKET YARD, DHANERA .. RESPONDENT PAN : AAABT 2382 G & CROSS-OBJECTOR ./ ITA NO. 2864/AHD/2012 & CO NO.41/AHD/2013 / ASSESSMENT YEAR: 2009-10 ACIT, B.K. CIRCLE PALANPUR .. APPELLANT VS THE DHANERA NAGRIK SAHKARI MADLI LTD. MARKET YARD, DHANERA .. RESPONDENT PAN : AAABT 2382 G & CROSS-OBJECTOR REVENUE BY MS. SANYOGITA NAGPAL, SR DR ASSESSEE(S) BY SHRI N.C. AMIN , AR / DATE OF HEARING 02/12/2015 /DATE OF PRONOUNCEMENT 08/12/2015 / O R D E R PER SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER: THESE APPEALS FILED BY THE REVENUE AND THE CORRESPO NDING CROSS-OBJECTIONS THEREOF FILED BY THE ASSESSEE ARE DIRECTED ITA NOS 2863 & 2864/AHD/2012 & CO 40 & 41/AHD/2013 ACIT VS. THE DHANERA NAGRIK SAHAKARI MANDLI LTD AYS 2007-08 & 2009-10 - 2 - AGAINST THE RESPECTIVE ORDERS OF THE COMMISSIONER O F INCOME- TAX (APPEALS)-XX, AHMEDABAD, BOTH DATED 08.10.2012 FOR ASSESSMENT YEARS 2007-08 AND 2009-10. 2. AT THE OUTSET, LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT HE IS NOT PRESSING CROSS-OB JECTIONS; HENCE, BOTH THE CROSS-OBJECTIONS FILED BY THE ASSES SEE ARE DISMISSED BEING NOT PRESSED. ITA NO. 2863/AHD/2012 : AY- 2007-08 3. THE SOLE ISSUE RAISED BY THE REVENUE IN ITS APPE AL FOR ASSESSMENT YEAR 2007-08 READS AS UNDER:- THE LD. COMMISSIONER OF INCOME-TAX (APPEALS)-XX, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETING THE DISALLOWANCE OF RS.13,00,793/- MADE U/S 80P(2)(A)(I ) OF THE ACT. 4. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A CO- OPERATIVE SOCIETY REGISTERED UNDER THE CO-OPERATIVE SOCIETIES ACT AND IS ENGAGED IN THE FINANCING BUSINESS. DURI NG THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS FILED ITS RET URN OF INCOME ON 30.10.2007 DECLARING TOTAL INCOME AT RS. NI L, AFTER CLAIMING DEDUCTION U/S80P. THE ASSESSING OFFICER DI SALLOWED RS.13,00,793/- CLAIMED BY THE ASSESSEE U/S 80P(2)(A )(I) OF THE ACT ON THE GROUND THAT THE ASSESSEE WAS NEITHER A P RIMARY ITA NOS 2863 & 2864/AHD/2012 & CO 40 & 41/AHD/2013 ACIT VS. THE DHANERA NAGRIK SAHAKARI MANDLI LTD AYS 2007-08 & 2009-10 - 3 - AGRICULTURE CO-OPERATIVE SOCIETY NOR A PRIMARY CO-O PERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. 5. IN APPEAL, RELIEF HAS BEEN GRANTED BY THE CIT(A) AND THE SAME HAS BEEN OPPOSED BY THE REVENUE INTER ALIA SUBMITTING THAT THE CIT(A) HAS ERRED DELETING THE DISALLOWANCE OF RS.13,00,793/- MADE BY THE ASSESSING OFFICER U/S 80 P(2)(A)(I) AND PLEADED THAT THE ORDER OF THE CIT(A) BE SET ASI DE AND THAT OF THE ASSESSING OFFICER BE RESTORED. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE CIT(A) AND SUBMITTED THAT THE VIEW TAKEN BY THE CIT(A) BE APPROVED IN VIEW OF THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF JAFRI MOMIN VIKAS CO. OP. CREDIT SOCIEITY LTD. V S. CIT, REPORTED IN 362 ITR 331 (GUJ.). 6. WE FIND THAT THE ASSESSEE HAS FILED ITS RETURN O F INCOME ON 30.10.2007 DECLARING TOTAL INCOME AT RS. NIL, AFTER CLAIMING DEDUCTION U/ 80P. AS STATED ABOVE, THE ASSESSING O FFICER DISALLOWED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE WAS NEITHER A PRIMARY AGRICULTURE CO-OPERA TIVE SOCIETY NOR A PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK AND THEREFORE, NOT ELIGIBLE FOR CL AIMING DEDUCTION U/S 80P(2)(A)(I) OF THE ACT. THE STAND O F THE ASSESSEE ITA NOS 2863 & 2864/AHD/2012 & CO 40 & 41/AHD/2013 ACIT VS. THE DHANERA NAGRIK SAHAKARI MANDLI LTD AYS 2007-08 & 2009-10 - 4 - HAS BEEN THAT THE ASSESSEE-SOCIETY IS REGISTERED UN DER THE CO- OPERATIVE ACT, 1912 AND HAS BEEN PROVIDING CREDIT F ACILITIES TO ITS MEMBERS WHO ARE MOSTLY FROM RURAL AREAS I.E. DH ANERA TALUKA. IN THIS VIEW, THE ASSESSEE-SOCIETY HAS BEE N CARRING ON THE BUSINESS OF GIVING CREDIT FACILITIES TO ITS MEM BERS WHICH INDIRECTLY RESULTED IN RURAL AND AGRICULTURAL DEVEL OPMENT WHICH IS EQUIVALENT TO THE BUSINESS CARRIED ON BY A RURAL DEVELOPMENT BANK WITH ONLY DIFFERENCE IN NAME. IN SUBSTANCE AS SESSEE IS CARRYING ON THE BUSINESS OF A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. IN LIGHT OF ABOVE SUBMISSION OF LD. AUTHORIZED REPRESENTATIVE, THE CIT(A) WAS JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO VERIFY WHETHER ANY INTERES T WAS RECEIVED BY THE ASSESSEE ON SHORT TERM DEPOSITS AND GOVERNMENT SECURITIES AND THEREAFTER HE SHOULD ASSE SS SUCH INTEREST UNDER THE HEAD INCOME FROM OTHER SOURCES . THIS VIEW OF THE CIT(A) WAS FORTIFIED BY THE DECISION OF HON BLE SUPREME COURT IN THE CASE OF TOTGARS CO-OPERATIVE SALE SOCI ETY LTD VS. ITO, REPORTED IN (2010) 322 ITR 283. 7. SIMILAR ISSUE HAS BEEN DECIDED BY HONBLE GUJARA T HIGH COURT IN THE CASE OF CIT VS. JAFARI MOMIN VIKAS CO- OP. CREDIT ITA NOS 2863 & 2864/AHD/2012 & CO 40 & 41/AHD/2013 ACIT VS. THE DHANERA NAGRIK SAHAKARI MANDLI LTD AYS 2007-08 & 2009-10 - 5 - SOCIETY LTD., WHERE ASSESSEE IS NOT A CO-OPERATIVE BANK BUT A CO-OPERATIVE SOCIETY. IN THE AFORESAID DECISION, T HE HONBLE HIGH COURT UNDER THE SIMILAR FACTS, IT WAS HELD THA T THE ASSESSEE WAS ENTITLED TO DEDUCTION U/S.80P OF THE I NCOME-TAX ACT, 1961. THE OPERATING PARAGRAPH OF THE HIGH CO URTS ORDER IN THE CASE OF CIT VS. JAFARI MOMIN VIKAS CO-OP. CR EDIT SOCIETY LTD. (SUPRA) READS AS UNDER:- FROM THE ABOVE CLARIFICATION, IT CAN BE GATHERED T HAT SUB- SECTION (4) OF SECTION 80P WILL NOT APPLY TO AN ASS ESSEE WHICH IS NOT A CO-OPERATIVE BANK. IN THE CASE CLARI FIED BY THE CENTRAL BOARD OF DIRECT TAXES, THE DELHI CO-OP, URBAN THRIFT AND CREDIT SOCIETY LTD. WAS UNDER CONSIDERAT ION. THE CIRCULAR CLARIFIED THAT THE SAID ENTITY NOT BEI NG A CO- OPERATIVE BANK, SECTION 80P(4) OF THE ACT WOULD NOT APPLY TO IT. IN VIEW OF SUCH CLARIFICATION, WE CANNOT ENT ERTAIN THE REVENUE'S CONTENTION THAT SECTION 80P(4) WOULD EXCL UDE NOT ONLY THE CO-OPERATIVE BANKS OTHER THAN THOSE FU LFILLING THE DESCRIPTION CONTAINED THEREIN BUT ALSO CREDIT S OCIETIES, WHICH ARE NOT CO-OPERATIVE BANKS IN THE PRESENT CAS E, THE RESPONDENT-ASSESSEE IS ADMITTEDLY NOT A CREDIT COOP ERATIVE BANK BUT A CREDIT CO-OPERATIVE SOCIETY. THE EXCLUSI ON CLAUSE OF SUB-SECTION(4) OF SECTION 80P, THEREFORE, WOULD NOT APPLY, IN THE RESULT, THE TAX APPEALS ARE DISMI SSED. NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE ON BEHALF OF REVENUE. THEREFORE, FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING AND THE VARIOUS JUDICIAL PRONOUNCEMENTS AS REFERRED ABOVE, WE ARE NOT INCLIN ED TO INTERFERE IN THE FINDINGS OF CIT(A) WHO HAS RIGHTLY GIVEN PARTIAL RELIEF TO THE ASSESSEE WITH A DIRECTION TO THE ASSESSING ITA NOS 2863 & 2864/AHD/2012 & CO 40 & 41/AHD/2013 ACIT VS. THE DHANERA NAGRIK SAHAKARI MANDLI LTD AYS 2007-08 & 2009-10 - 6 - OFFICER TO VERIFY WHETHER ANY INTEREST WAS RECEIVED BY THE ASSESSEE ON SHORT-TERM DEPOSITS AND GOVERNMENT SECU RITIES AND THEREAFTER ASSESS SUCH INTEREST UNDER THE HEAD INCOME FROM OTHER SOURCES AS LAID DOWN BY THE HONBLE SUP REME COURT IN THE CASE OF TOTGARS CO-OPERATIVE SALE SOCI ETY LTD (SUPRA). ACCORDINGLY, THIS APPEAL OF THE REVENUE I S DISMISSED. ITA NO. 2864/AHD/2012 : AY- 2009-10 8. SIMILAR ISSUE AROSE IN AY 2009-10. FACTS BEING SIMILAR, SO FOLLOWING SAME REASONING, WE ARE NOT INCLINED TO INTERFERE IN THE FINDINGS OF CIT(A) IN THIS YEAR AS WELL WHER EIN CIT(A) HAS GRANTED THE SIMILAR RELIEF ON SAME LINE. WE UP HOLD THE ORDER OF CIT(A) IN THIS YEAR AS WELL. 9. IN THE RESULT, BOTH APPEALS OF THE REVENUE AS WE LL AS CROSS-OBJECTIONS OF THE ASSESSEE ARE DISMISSED ORDER PRONOUNCED IN THE COURT ON 8TH OF DECEMBER, 2 015 AT AHMEDABAD. SD/- SD/- ( RAJESH KUMAR ) ACCOUNTANT MEMBER ( SHAILENDRA KUMAR YADAV ) JUDICIAL MEMBER AHMEDABAD; DATED 08/12/2015 *BT ITA NOS 2863 & 2864/AHD/2012 & CO 40 & 41/AHD/2013 ACIT VS. THE DHANERA NAGRIK SAHAKARI MANDLI LTD AYS 2007-08 & 2009-10 - 7 - / COPY OF THE ORDER FORWARDED TO : 1. '# / THE APPELLANT 2. $%'# / THE RESPONDENT. 3. && ' / CONCERNED CIT 4. ' ( ) / THE CIT(A), 5. ()* $++ , , / DR, ITAT, AHMEDABAD 6. *, / GUARD FILE. / BY ORDER, //TRUE COPY// / (DY./ASSTT.REGISTRAR) ! , / ITAT, AHMEDABAD