Appeal details
Counselvise Citation
[2014] 122 COUNSELVISE.COM (IT) 9427 (ITAT-KOLKATA)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 8 month(s) 8 day(s)
Appellant
Respondent
Appeal Type
Cross Objection
Pronouncement Date
13-02-2014
Appeal Filed By
Assessee
Bench Allotted
A
Next Hearing Date
09-10-2013
Assessment Year
2005-2006
Appeal Filed On
04-06-2012
Judgement Text
, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND . . . . ' '' ''# '#'# '#, $% ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI ABRAHAM P. GEORGE, AM] & & & & / I.T.A NO. 388/KOL/2010 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2005-06 DEPUTY COMMISSIONER OF INCOME-TAX, VS. HARINGHATA FARM EMPLOYEES CO-OPERATIVE CIRCLE-NADIA. CREDIT SOCIETY LTD. (PAN:AADFH1 274J) (,- /APPELLANT ) (./,-/ RESPONDENT ) & C.O. 53/KOL/2012 IN & & & & / I.T.A NO. 388/KOL/2010 '( )* '( )* '( )* '( )*/ // / ASSESSMENT YEAR: 2005-06 HARINGHATA FARM EMPLOYEES CO-OPERATIVE VS. DEPUTY COMMISSIONER OF INCOME-TAX, CREDIT SOCIETY LTD. CIRCLE-NADIA. (CROSS OBJECTOR) (RESPONDENT) DATE OF HEARING: 13.02.2014 DATE OF PRONOUNCEMENT: 13.02.2014 FOR THE APPELLANT: SHRI P. K. CHAKRABORTY, JCIT, SR . DR FOR THE RESPONDENT: S/SHRI A. K. CHAKRABORTY & D. K. BHATTACHARYA, ADVOCATES $0 / ORDER PER SHRI MAHAVIR SINGH, JM: THIS APPEAL BY REVENUE AND CROSS OBJECTION BY ASSES SEE ARE ARISING OUT OF ORDER OF CIT(A)-XXXVI, KOLKATA IN APPEAL NO. 570/CIT(A)-XXXV I/AADFH1274J.NADIA/08-09 DATED 30.11.2009. ASSESSMENT WAS FRAMED BY DCIT, C IRCLE-NADIA, U/S. 147/143(3)/144 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS TH E ACT) FOR ASSESSMENT YEAR 2005-06 VIDE HIS ORDER DATED 30.12.2008. 2. THE SOLE ISSUE IN THIS APPEAL OF REVENUE IS AGAI NST THE ORDER OF CIT(A) DELETING THE DISALLOWANCE OF DEDUCTION U/S. 80P(2)(A)(I) OF THE ACT BEING INTEREST INCOME FROM MEMBERS OF THE CO-OPERATIVE SOCIETY. FOR THIS, REVENUE HAS R AISED FOLLOWING TWO GOUNDS: 1. THAT THE CIT(A) ERRED IN LAW AS WELL AS ON FACT S IN HOLDING THAT THE INCOME OF RS.17,69,301/- WAS INCOME FROM INTEREST AND NOT INC OME FROM TRADING AND HENCE WRONGLY ALLOWED DEDUCTION U/S. 80P(2)(A)(I) OF THE INCOME TAX ACT ON THE SAID AMOUNT. 2. THAT THE CIT(A) ERRED IN VIOLATING PROVISION OF RULE 46A OF THE I. T. RULES, 1962 IN ACCEPTING THE ASSESSEES EXPLANATION AND DECIDING T HAT AN AMOUNT OF RS.17,69,301/- IS ALLOWABLE U/S. 80P(2)(A)(I) OF THE INCOME TAX ACT O UT OF INCOME FROM GENERAL SECTION OF 2 ITA NO.388/K/2010 & CO 53/K/2012 HARINGHATA FARM EMPLOYEES COOP CREDIT SOCIETY LTD. , AY:2005-06 RS.20,89,201/- INCOME FROM TEXTILE SECTION OF RS.82 ,933/- AND INCOME FROM LPG SECTION OF RS.34,550/-. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. BRIEFLY STATED FACTS OF THE CASE ARE THAT THE ASSES SEE IS A COOPERATIVE SOCIETY I.E. FARM EMPLOYEES COOPERATIVE CREDIT SOCIETY. THE ASSESSE E FILED ITS RETURN OF INCOME FOR THE RELEVANT ASSESSMENT YEAR 2005-06 DECLARING TOTAL INCOME AT R S.93,983/- AND THE SAME WAS PROCESSED U/S. 143(1) OF THE ACT ON 29.03.2006. SUBSEQUENTLY , THE AO NOTICED FROM THE RECORDS THAT THE COOPERATIVE SOCIETY IS ENGAGED IN THE BUSINESS OF T RADING OF LPG, TEXTILES AND MONEY LENDING. ACCORDING TO AO, THE ASSESSEE IS NOT ELIGIBLE FOR D EDUCTION U/S. 80P(2)(A)(I) OF THE ACT AS CLAIMED BY ASSESSEE ON INTEREST INCOME AND OTHER IN COMES I.E. TEXTILE, LPG AND MONEY LENDING. ACCORDINGLY, NOTICE U/S. 148 OF THE ACT WAS ISSUED AND SUBSEQUENTLY, ASSESSMENT PROCEEDINGS WERE INITIATED. THERE WAS NO RESPONSE FROM THE ASS ESSEE COOPERATIVE SOCIETY AND THE AO MADE THE ASSESSMENT TREATING THE INCOME OF RS.20,89,201/ - AS NOT ALLOWABLE U/S. 80P(2)(A)(I) OF THE ACT BY OBSERVING AS UNDER: THE ASSESSEE SOCIETY ALWAYS AVOIDED TO RESPONSE TO THIS DEPARTMENT. NO POSITIVE RESPONSE MADE TO THE NOTICES ISSUED BY THE UNDERSIG NED. THE HAS FAILED TO EXPLAIN THE INCOME OF RS.20,89,201/- UNDER GENERAL SECTION WHIC H ALSO INCLUDED OTHER ACTIVITIES APART FROM MONEY LENDING BUSINESS & THE CLAIM FOR D EDUCTIONU/S. 80P OF THE I. T. ACT. IT IS UPON THE INCUMBENT TO EXPLAIN AND PROOF THE ACCO UNTS FURNISHED ALONG WITH THE RETURN OF INCOME WHICH THE ASSESSEE SOCIETY FAILED TO DO S O. UNDER THE CIRCUMSTANCES, THE AMOUNT OF RS.20,89,201/- IS CHARGED TO TAX WITHOUT ANY DEDUCTION UNDER SECTION 80P OF THE I. T. ACT. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO ALLOWED THE DEDUCTION ON ACCOUNT OF INTEREST INCOME EARNED FROM LOAN GIVEN TO MEMBERS O R CREDIT GIVEN TO MEMBERS BY HOLDING THE SAME AS INCOME FROM ITS BANKING BUSINESS. RELYING ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF MEHSANA DISTRICT CENTRAL CO-OPT. BAN K LTD. VS. ITO (2001) 251 ITR 522 (SC), THE CIT(A) RESTRICTED THE DISALLOWANCE OF DEDUCTION AT RS.4,21,535 BEING (I) COMMISSION AT RS.3,19,900/-, (II) INCOME FROM TEXTILE SECTION AT RS.82,933/- AND (III) INCOME FROM LPG SECTION AT RS.34,550/-. AGGRIEVED AGAINST THE ALLOWANCE OF DEDUCTION ON INT EREST INCOME, REVENUE CAME IN APPEAL AND AGAINST CONFIRMATION OF ADDITION OF RS.4,21,535/-, DETAILS AS NOTED ABOVE, ASSESSEE CAME IN CROSS OBJECTIONS. 4. AT THE OUTSET, IT IS SEEN THAT THE CROSS OBJECTI ON FILED BY ASSESSEE IS DELAYED BY 810 DAYS AND THE SIMPLE REASON GIVEN BY ASSESSEE IN ITS COND ONATION PETITION VIDE PARA 2 AND 3 READS AS UNDER: 3 ITA NO.388/K/2010 & CO 53/K/2012 HARINGHATA FARM EMPLOYEES COOP CREDIT SOCIETY LTD. , AY:2005-06 2. THAT THE NOTICE ISSUED WITH DEPARTMENTAL APPEAL TOGETHER WITH FORM 36 AND THE GROUND DATED 15/2/2010 IN DUE COURSE HAS BEEN SERVE D UPON THE RESPONDENT ASSESSEE. 3. THAT THE REASON FOR DELAY IN FILING THE CROSS O BJECTION AS WELL AS THE REGULAR CROSS APPEAL IS DUE TO THE FACT THAT SRI PRADIP KUMAR BOS E, ADVOCATE WHO IS THE REGULAR TAX ADVISOR MISUNDERSTOOD THE CASE TO THE EFFECT THAT T HE CROSS APPEAL AND/OR CROSS OBJECTION WILL NOT BE BENIFITED TO THE ASSESSEE RES PONDENT AS PER FACTS AND CIRCUMSTANCES OF THE CASE AND DUE TO THIS MISUNDERS TANDING OF THE LEGAL POSITION OF THE SAID LD. ADVOCATE, THE CROSS APPEAL AND/OR CROSS OB JECTION HAS NOT BEEN FILED. THE RESPONDENT ASSESSEE RECENTLY MET AND TOOK ADVICE OF A SENIOR COUNSEL MR. A. K. CHAKRABORTY, ADVOCATE WHO ADVISED TO FILE CROSS OBJ ECTION AS THERE ARE SOME SUBSTANTIAL POINT OF FACTS AND LAW IN THIS CASE AND ACCORDINGLY, THE PRESENT CROSS OBJECTION IS BEING FILED HEREWITH. 5. AT THE TIME OF HEARING WHEN A QUERY WAS PUT TO E XPLAIN THE DELAY AND GIVE REASONABLE CAUSE, THE ASSESSEES JUNIOR COUNSEL SHRI PRADIP KR . BASU WAS PRESENT AND HE FAIRLY CONCEDED THAT THE ASSESSEE HAS GIVEN CLEAR INSTRUCTION NOT T O PROSECUTE WITH THE CROSS OBJECTION AS THE DELAY IS NOT DUE TO REASONABLE CAUSE. AS THE LD. C OUNSEL FOR THE ASSESSEE HAS CONCEDED, WE REFUSE TO CONDONE THE DELAY AND THE CROSS OBJECTION IS NOT ADMITTED. 6. COMING TO THE APPEAL OF THE REVENUE. THE ASSESS EE IS A COOPERATIVE SOCIETY ENGAGED MAINLY IN PROVIDING CREDIT FACILITIES TO ITS MEMBER S AND ASSESSEE HAS EARNED INTEREST INCOME FROM PROVIDING CREDIT FACILITIES TO ITS MEMBERS AT RS.17,69,301/-. NO DOUBT SOCIETY IS INDULGING IN OTHER ACTIVITIES AND HAS EARNED COMMISSION INCOM E, LPG INCOME AND INCOME FROM TEXTILE SECTION, WHICH HAS ALREADY CONFIRMED BY CIT(A). AS REGARDS THE DEDUCTION U/S. 80P2(A)(I) OF THE ACT, THE ASSESSEE IS ELIGIBLE ON THE INCOME DER IVED FROM ITS MAIN BUSINESS I.E. THE BUSINESS OF PROVIDING CREDIT FACILITY TO ITS MEMBERS AND, TH EREFORE, THE DEDUCTION IS AVAILABLE UNDER THIS SECTION IN RESPECT TO THIS INCOME. THIS ISSUE HAS LONG BEEN SETTLED BY THE HONBLE SUPREME COURT IN THE CASE OF MEHSANA DISTRICT CENTRAL CO-OP T. BANK LTD. (SUPRA). AS THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE, WE CONFIRM THE O RDER OF CIT(A) AND THIS ISSUE OF REVENUES APPEAL IS DISMISSED. 7. IN THE RESULT, BOTH THE APPEAL OF REVENUE AND CR OSS OBJECTION OF ASSESSEE ARE DISMISSED. 8. ORDER IS PRONOUNCED IN THE OPEN COURT ON 13.02.2 014 SD/- SD/- . . . . ' '' ''# '#'# '# , $% , (ABRAHAM P. GEORGE) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 13TH FEBRUARY, 2014 12 '3' 4 JD.(SR.P.S.) 4 ITA NO.388/K/2010 & CO 53/K/2012 HARINGHATA FARM EMPLOYEES COOP CREDIT SOCIETY LTD. , AY:2005-06 $0 5 . 6$ )7- COPY OF THE ORDER FORWARDED TO: 1 . ,- / APPELLANT- DCIT, CIRCLE-NADIA. 2 ./,- / RESPONDENT HARINGHATA FARM EMPLOYEES COOPERATIV E CREDIT SOCIETY LTD., P.O. MOHANPUR, DIST. NADIA (WB) 3 . 0' ( )/ THE CIT(A), KOLKATA 4. 5. 0' / CIT KOLKATA <= .' / DR, KOLKATA BENCHES, KOLKATA / ./ TRUE COPY, $0'>/ BY ORDER, ' /ASSTT. REGISTRAR .
