The Kakinada Co-Operative Building Society, Kakinada V. The Addl.CIT, Kakinada

CO 8/VIZ/2017

• Counselvise Citation: [2019] 114 COUNSELVISE.COM (IT) 2254 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 2 year(s) 9 month(s) 28 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 20-11-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2010-2011
• Appeal Filed On: 23-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B RAMA KRISHNA
• Assessee Lawyers: C V S MURTHY
• Keywords: Bad and doubtful debts; Revised return; Set aside
• Section: 143(3); 133A; 80P; 201; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI V. DURGA RAO , HONBLE JUDICIAL MEMBER & SHRI D.S. SUNDER SINGH , HONBLE ACCOUNTANT MEMBER ITA NO S . 308 TO 310 / VIZ /201 6 (ASST. YEAR : 20 1 0 - 11 TO 2012 - 13 ) A CIT, CIRCLE - 1, KAKINADA . VS. THE KAKINADA CO - OPERATIVE BUILDING SOCIETY LTD., 13 - 4 - 13, RAMAYYA STREET, SURYARAOPET, KAKINADA. PAN NO. A AAAT 7000 L (APPELLANT) (RESPONDENT) C.O.NOS.08 TO 10/VIZ/2017 (ARISING OUT OF ITA NO S . 308 TO 310 / VIZ /201 6) (ASST. YEAR : 2010 - 11 TO 2012 - 13 ) THE KAKINADA CO - OPERATIVE BUILDING SOCIETY LTD., 13 - 4 - 13, RAMAYYA STREET, SURYARAOPET, KAKINADA. VS. DCIT, CIRCLE - 1, KAKINADA . PAN NO. A AAAT 7000 L (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI C.V.S. MURTHY , FC A. DEPARTMENT BY : SHRI B.RAMA KRISHNA, SR. DR DATE OF HEARING : 14 / 1 1 /201 9 . DATE OF PRONOUNCEMENT : 20 / 1 1 /201 9 . O R D E R PER V. DURGA RAO , JUDICIAL MEMBER TH E S E APPEAL S BY THE REVENUE AND THE CROSS OBJECTIONS BY THE ASSESSEE ARE DIRECTED AGAINST THE COMMON ORDER OF 2 ITA NO S . 308 - 309/VIZ/2016 C.O.NOS.08 - 10/VIZ/2017 ( THE KAKINADA CO - OP. BUILDING SOCIETY LTD. ) COMMISSIONER OF INCOME TAX (APPEALS) - 2 , VISAKHAPATNAM , DATED 1 0 / 03 /201 6 FOR THE ASSESSMENT YEAR S 20 1 0 - 11 TO 2012 - 13 . SINCE THE FACTS AND ISSUES ARE COMMON, CLUBBED AND HEARD TOGETHER AND DISPOSED OF BY WAY OF THIS CONSOLIDATED ORDER. 2. FOR THE SAKE OF CONVENIENCE, FACTS ARE TAKEN FROM A.Y. 2010 - 11 IN ITA NO. 308/VIZ/2016 . THE ASSESSEE IS ENGAGED IN THE BUSINESS OF ACCEPTING DEPOSITS, HOUSING FINANCE, REAL ESTATE IN GROUP HOUSING UNDER THE NAME AND STYLE OF M/S. KAKINADA CO - OPERATIVE BUI L DING SOCIETY LTD. , FILED ITS RETURN OF INCOME BY ADMITTING TAXABLE INCOME AT NIL AFTER CLAIMING 80P DEDUCTION OF RS. 35,87,345/ - . THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY UNDER CASS , A FTER FOL LO WING DUE PROCEDURE ASSESSMENT WAS COMPLETED BY DENYING 80P CLAIM ON THE GROUND THAT MISCELLANEOUS INCOME SHOWN BY THE ASSESSEE ON ACCOUNT OF INTEREST INCOME RECEIVED ON SURPLUS FUNDS PLACED AS FIXED DEPOSITS WITH OTHER BANKS , THE INTEREST ACC R U ED ON THE RESERVE FUND AND BAD DEBTS RESERVE ACCOUNT KEPT WITH THE DCCB AND THE INTEREST RECEIVE D ON LOANS ADVANCED TO STAFF, PRESIDENT OF THE SOCIETY ETC. ARE NOT ELIGIBLE FOR DEDUCTION U/SEC. 80P. THEREAFTER, A SURVEY U/SEC. 133A WAS CONDUCTED ON 28/01/2016. CONSEQUENT TO SURVEY , THE ASSESSEE WITHDREW THE CLAIM OF DEDUCTION U/SEC. 80P BY FILING REVISED RETURN. THEREFORE, THE ASSESSING OFFICER HAS 3 ITA NO S . 308 - 309/VIZ/2016 C.O.NOS.08 - 10/VIZ/2017 ( THE KAKINADA CO - OP. BUILDING SOCIETY LTD. ) COMPLETED THE ASSESSMENT U/SEC. 143(3) R.W.S. 147 BY ORDER DATED 30/06/2016. 3 . BEFORE PASSING THE REASSESSMENT ORDER, T HE ASSESSEE WENT ON APPEAL BEFORE THE LD. CIT(A) , WHO ALLOWED THE CLAIM OF SECTION 80P(2) TO THE ASSESSEE FOR THE ASSESSMENT YEARS UNDER CONSIDERATION. 4 . ON BEING AGGRIEVED, THE DEPARTMENT HAS RAISED THE FOLLOWING GROUNDS WHICH ARE COMMON IN ALL THE APPEALS: - 1. THE CIT(A) ERRED IN NOT APPRECIATING THAT THE QUESTION OF A DEDUCTION U/SEC. 80P(2)(A)(I) DOES NOT ARISE SINCE AFTER THE AMENDMENT MADE BY FINANCE ACT 2006 - 07 . 2. THE CIT(A) ERRED IN NOT APPRECIATING THAT THE AMENDMEN T TO SECTION 2 CLAUSE 24 WAS BROUGHT IN BY THE FINANCE ACT 2006 - 07 WHEREIN THE PROFITS ARISING FROM CREDIT LE N DI N G BY CO - OPERATIVE SOCIETIES WAS MADE A PART OF INCOME APART FROM OTHER RECEIPTS AND THE QUESTION OF DEDUCTION U/SEC. 80P(2)(A ) (I) DOES NOT ARISE IN THIS CASE. 3. THE ASSESSEE I.E. CO - OPERATIVE SOCIETY WITHDRAWN ITS CLAIM OF DEDUCTION U/SEC. 80P FOR THE ASSESSMENT YEARS 2009 - 10, 2010 - 11, 2011 - 12 AND 2012 - 13 . HENCE, THE ORDER OF THE CIT(A) IS ERRONEOUS AND NOT ACCEPTABLE. 4. ANY OTHER GROUND THAT MAY BE URGED AT THE TIME OF APPEAL HEARING BEFORE THE HON'BLE ITAT. 5. W HEN THESE APPEALS ARE TAKEN UP FOR HEARING, LD.DR HAS SUBMITTED THAT THERE IS A SURVEY CONDUCTED IN THE CASE OF THE ASSESSEE. SUBSEQUENT TO THE SURVEY , THE ASSESSEE HAS FILED A REVISED RETURN WHEREIN HE WITHDREW THE CLAIM OF SEC TION 80P . THE ASSESSING OFFICER BY CONSIDERING THE REVISED RE TURN REOPENED THE ASSESSMENT AND COMPLETED THE SAME WITHOUT CONSIDERING 80P 4 ITA NO S . 308 - 309/VIZ/2016 C.O.NOS.08 - 10/VIZ/2017 ( THE KAKINADA CO - OP. BUILDING SOCIETY LTD. ) DEDU C TION BECAUSE THERE IS NO CLAIM MADE BY THE ASSESSEE . HE FURTHER SUBMITTED THAT ALL THE SE APPEALS HAVE BEEN FILED BEFORE PASSING THE REASSESSMENT ORDER S , AND THEREFORE SUBMITTED THAT NOW ALL THE APPEALS HAVE BECOME INFRUCTUOUS AND REQUESTED FOR DISMISSAL OF THE SAME. 6 . LD.AR HAS SUBMITTED THAT ASSESSEE IS ENTITLED FOR 80P DEDUCTION FOR THE REASON THAT IN EARLIER YEARS 80P CLAIM WAS GRANTED . 7 . WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF THE AUTHORITIES BELOW. 8. BY CONSIDERING THE DETAILS FILED BY THE REVENUE, WE FIND THAT ASSESSEE HIMSELF WITHDREW THE CLAIM OF SECTION 80P BY FILING THE REVISED RETURN FOR THE ASS ESSMENT YEARS UNDER CONSIDERATION I.E. A.YS. 2010 - 11, 2011 - 12 & 2012 - 13 AND THE SAME ARE REGULARIZED BY THE ASSESSING OFFICER BY REOPENING THE ASSESSMENT BY ISSUING NOTICE U/SEC. 148, ASSESSMENT S ARE COMPLETED U/SEC. 143(3) R.W.S. 147 DATED 30/06/2016 . THEREFORE, UNDER THESE FACTS AND CIRCUMSTANCES OF THE CASE , WE ARE OF THE OPINION THAT GROUNDS RAISED BY THE DEPARTMENT DESERVE TO BE ALLOWED AND THE ORDER S OF THE LD. CIT(A) HA VE TO BE SET ASIDE . ACCORDINGLY, WE CANCEL THE 5 ITA NO S . 308 - 309/VIZ/2016 C.O.NOS.08 - 10/VIZ/2017 ( THE KAKINADA CO - OP. BUILDING SOCIETY LTD. ) ORDER PASSED BY THE LD. CIT(A) AND ALLOW THE APPEALS OF THE REVENU E . 9. SO FAR AS THE CROSS OBJECTIONS ARE CONCERNED, IT IS ONLY SUPPORTIVE TO THE ORDERS OF THE LD. CIT(A). IN VIEW OUR DECISION IN REVENUES APPEAL (SUPRA) , THE CROSS OBJECTIONS FILED BY THE ASSESSEE DESERVE TO BE DISMIS SED . ACCORDINGLY, DISMISSED. 10 . IN THE RESULT, APPEAL S FILED BY THE REVENUE ARE ALLOWED AND THE CROSS OBJECTION S FILED BY THE ASSESSEE ARE DISMISSED . ORDER PRONOUNCED IN OPEN COURT ON TH IS 2 0 T H DAY OF NOV . , 201 9 . S D / - S D / - (D.S. SUNDER SINGH) (V. DURGA RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 2 0 T H NOVEMBER , 201 9 . VR/ - COPY TO: 1. THE ASSESSEE THE KAKINADA CO - OPERATIVE BUILDING SOCIETY LTD., 13 - 4 - 13, RAMAYYA STREET, SURYARAOPET, KAKINADA. 2. THE REVENUE A CIT, CIRCLE - 1, KAKINADA. 3. THE CIT - 2 , VISAKHAPATNAM. 4. THE CIT(A) - 2 , VISAKHAPATNAM. 5. THE D.R . , VISAKHAPATNAM. 6. GUARD FILE. BY ORDER (VUKKEM RAMBABU) SR. PRIVATE SECRETARY, ITAT, VISAKHAPATNAM.