GUJARAT STATE CO-OP FRUITS & VEGETABLE MARKETING FEDERATION LTD.,SURAT V. .INCOME TAX OFFICER , CIRCLE 2(1)(1), SURAT

ITA 895/SRT/2024

AI Insights

The case involves two appeals by the Gujarat State Co-Op. Fruits & Vegetable Marketing Federation Ltd. against the orders of the National Faceless Appeal Centre, Delhi/Commissioner of Income tax (Appeals), which disallowed deductions under section 80P(2)(d) of the Income Tax Act, 1961 for the assessment years 2018-19 and 2020-21. The primary issue was whether the assessee, a co-operative society, was eligible for deductions on interest and dividend income earned from co-operative banks. The Tribunal considered the submissions, relevant case laws, and precedents, ultimately deciding in favor of the assessee based on the jurisdictional High Court's decision and previous Tribunal decisions.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 472200 (ITAT-SURAT)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Other Referred Cases: PCIT vs. Totagars Co-operative Sale Society, Surat Vankar Sahakari Sangh Ltd. vs. ACIT, Shree Salabatpura Urban Co-Op. Credit Society Ltd. vs. DCIT, Althan Bhatar Co-operative Credit Society Ltd. Vs ACIT, Vishal Co-operative Housing Services Society Limited vs. ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MINAL KAMBLE
• Assessee Lawyers: SUJESH C. SURATWALA
• Keywords: Rule of consistency; Co-operative Credit Society
• Section: 143(3); 72

Judgement Text

" आयकर अपीलीय अिधकरण, सूरत Ɋायपीठ, सूरत IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER आयकर अपील सं./ITA Nos.895 & 896/SRT/2024 (AYs. 2018-19 & 2020-21) (Hybrid hearing) Gujarat State Co-Op. Fruits & Vegetable Marketing Federation Ltd., P.O. Box No.43, Sardar Baag, Bardoli-394 602 [PAN : AAAAG 0983 H] बनाम Vs Income Tax Officer Ward- 2(1)(1), Surat, Majura Gate, Surat-395001 अपीलाथŎ/Appellant ŮȑथŎ /Respondent िनधाŊįरती की ओर से /Assessee by Shri Sujesh C. Suratwala, CA राजˢ की ओर से /Revenue by Shri Minal Kamble– Sr-DR अपील पंजीकरण/Appeal instituted on 22.08.2024 & 21.08.2024 सुनवाई की तारीख/Date of hearing 17.12.2024 उद ्घोषणा की तारीख/Date of pronouncement 17.12.2024 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. These two appeals by assessee are directed against the separate orders of National Faceless Appeal Centre, Delhi/Commissioner of Income tax (Appeals) [for short to as “NFAC/Ld.CIT(A)] both dated 13.08.2024 for assessment years (AYs) 2018-19 and 2020-21, which in turn arose out of separate assessment orders passed by Assessing Officer under section 143(3) r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) 22.04.2021 and 29.08.2022. In both appeals, certain facts are common, the assessee has raised similar grounds of appeal except variation of disallowances under section 80P(2)(d) of the Act. Therefore, with the consent of parties, both the appeals were clubbed heard together and are decided by common order to ITA Nos.895-896/SRT/2024 (A.Ys.18-19 & 20-21) Gujarat State Co-Op. Fruits & Vegetable Marketing Federation Ltd. 2 avoid conflicting decision and brevity. Appeal for assessment year 2018-19 in ITA No.895/SRT/2024 is treated as “lead” case. 2. Rival submission of both the parties have been heard and record perused. The Ld. Authorized Representative (Ld.AR) for the assessee submits that “grounds of appeal” raised by assessee is covered by the decision of Hon’ble jurisdictional High Court as well as by series of decisions of this Tribunal, wherein it has been consistently held that co-operative societies are eligible for deduction of interest and dividend earned from other co-operative society and co-operative banks. It is also held in a series of such decisions that co- operative banks are primarily co-operative societies. During the year under consideration, assessee has earned interest and dividend income from Surat District Co-Operative Bank of Rs.16,46,273/- and dividend income of Rs.750/- from Gujarat State Co-Operative Bank and Rs.75/- from Surat District Co- Operative Bank. Thus, aggregating to Rs.16,47,098/-. The Ld. AR of the assessee submits that such figures are recorded in para-2.2 of assessment order. The Ld. AR of the assessee submits that lower authorities disallowed such deduction on the basis of decision of Hon’ble Karnataka High Court in the case of PCIT vs. Totagars Co-operative Sale Society [2017] 83 taxmann.com 140 (Kar). However, there is contrary and favourable decision of Hon’ble jurisdictional High Court in the case of Surat Vankar Sahakari Sangh Ltd. vs. ACIT ( 2016) 72 taxmann.com169 (Guj) holding that that co-operative is eligible for deduction under section 80P(2)(d) of the Act in respect of gross interest received from co-operative bank without adjusting interest paid to said bank. . The Ld. AR of the assessee submits that he has already placed ITA Nos.895-896/SRT/2024 (A.Ys.18-19 & 20-21) Gujarat State Co-Op. Fruits & Vegetable Marketing Federation Ltd. 3 on record a series of decisions of this Tribunal on similar issue including the decision of this Tribunal in case of Shree Salabatpura Urban Co-Op. Credit Society Ltd. vs. DCIT in ITA No.150/SRT/2023 for assessment year 2018-19, wherein this Tribunal by followed its various earlier decisions including the judgment of Hon’ble jurisdictional High Court in case of Surat Vankar Sahakari Sangh Ltd. vs. ACIT (supra). 3. On the other hand, Ld. Senior Departmental Representative (Ld. Sr-DR) for the Revenue relied upon the orders of lower authorities and the decision of Hon’ble Karnataka High Court in case of PCIT vs. Totagars Co-operative Sale Society [2017] 83 taxmann.com 140 (Kar) ITAT Bangalore Benches in case of M/s Bantwal Public Employees Consumers Co-operative Society vs. ITO in ITA No.903/Bang/2023 dated 18.12.2023 and Murthedarara Seva Sahakari Sangha (N) vs. ITO in ITA No.1474/Bang/2023 dated 29.11.2024. The Ld. Sr-DR for the Revenue submits that as the interest earned from assessee’s business operation and from its activities thus, not eligible for deduction under section 80P(2)(d) of the Act. 4. We have considered the rival submissions of both the parties and have gone through order of lower authorities carefully. We have also deliberated the case law relied upon by both the parties. We find that Ld. AR of the assessee has made a limited prayer about deduction under section 80P(2)(d) of the Act which has been clearly recorded by Assessing Officer in page-2 of assessment order i.e., interest and the dividend earned from co-operative bank. We find that ground of appeal raised by assessee is squarely covered by a series of decisions of this co-ordinate Bench of this Tribunal even after considering the ITA Nos.895-896/SRT/2024 (A.Ys.18-19 & 20-21) Gujarat State Co-Op. Fruits & Vegetable Marketing Federation Ltd. 4 decisions of Hon’ble Karnataka High Court in the case of Totagars Co-operative Sale Society (supra) relied by Ld. Sr-DR for the Revenue. 5. We find that in Althan Bhatar Co-operative Credit Society Ltd. Vs ACIT in ITA No. 143/Srt/2024, this combination on similar contention of the parties passed the following order; 7. We have considered the rival submissions of both the parties and perused the orders of the lower authorities carefully. The dispute relates to deduction claimed under section 80P(2)(d) of the Act with regard to interest earned on fixed deposit with Surat District Co-operative Bank. We find that issue related with the deduction under section 80(P)(2)(d) is squarely covered by the series of decisions of jurisdictional High Court in Surat Vankar Sahakari Sangh Ltd. vs. ACIT ( supra) as well as by decisions of this Tribunal in favour of assessee including in the case of Vishal Co-operative Housing Services Society Limited vs. ITO, in ITA No.886/SRT/2023, dated 22.02.2024 (Surat – Trib.), wherein it was held that Co-operative Banks are primarily the Co-operative Society and the interest earned on deposit with Co-operative banks are eligible for deduction under section 80P(2)(d) of the Act. Similar, view was taken in assesses own case for AY 2014-15 in ITA No.151/SRT/2019, dated 31.03.2022. Having gone through the order of Co-ordinate Bench (supra), we see no reason to take a different view from the view taken by the Co-ordinate Bench (supra). 6. Considering the aforesaid consisting decision, which is followed in a series of decisions by this co-ordinate Bench of this Tribunal and respectfully following the said decisions, we direct the Assessing Officer to delete the deduction under section 80P(2)(d) of the Act. So far as reliance on the decision of Hon’ble Karnataka High Court in case of PCIT vs. Totagars Co-operative Sale Society (supra) is concerned, we find that the decision of Jurisdictional High Court in Surat Vankar Sahkari Sangh (supra) has binding precedent on this bench. 7. In the result, the grounds of appeal raised by the assessee is allowed. ITA Nos.895-896/SRT/2024 (A.Ys.18-19 & 20-21) Gujarat State Co-Op. Fruits & Vegetable Marketing Federation Ltd. 5 ITA No.896/SRT/2024 (AY 20-21) 8. As recorded earlier, that grounds of appeal raised in aforesaid appeal (ITA No.895/SRT/2-24) is similar as of assessment year 2018-19, wherein we have allowed the appeal of assessee by directing the Assessing Officer to delete interest and dividend income. Therefore, following the principle of consistency, appeal of assessee is also allowed. 9. In combined result, both appeal of assessee are allowed. Order pronounced in the open court on 17/12/2024. Sd/- Sd/- (BIJAYANANDA PRUSETH) (PAWAN SINGH) लेखा सद˟/Accountant Member Ɋाियक सद˟/Judicial Member सूरत / Surat Dated: 17/12/2024 Dkp Outsourcing Sr.P.S* आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to :  अपीलाथŎ/ The Appellant  ŮȑथŎ/ The Respondent  आयकर आयुƅ/ CIT  िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, सूरत/ DR, ITAT, SURAT  गाडŊ फाईल/ Guard File By order/आदेश से, // True Copy // सहायक पंजीकार आयकर अपीलीय अिधकरण, सूरत "