Income Tax Officer Ward-1 , Vijayapura V. The Bijapur Co-operative Credit Society Limited , Vijayapur

ITA 03/BANG/2018

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4709 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 01-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI
• Keywords: Tax effect

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-C BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 03 / BANG/201 8 ASSESSMENT YEAR : 20 1 3 - 14 THE INCOME TAX OFFICER, WARD -1, VIJAYAPUR. VS. M/S. THE BIJAPUR CO-OPERATIVE CREDIT SOCIETY LTD., YARNAL BUILDING, S S FRONT ROAD, VIJAYAPUR 586 101. PAN: AAAAT9969J APPELLANT RESPONDENT APPELLANT BY : SMT. PADMA MEENAKSHI, JCIT (DR) RESPONDENT BY : SHRI SANDEEP .C, CA DATE OF HEARING : 0 9 . 0 5 .2018 DATE OF PRONOUNCEMENT : 01 . 0 6 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE REVENUE WHICH IS DIRECT ED AGAINST THE ORDER OF LD. CIT(A), BELAGAVI DATED 31.10.2017 FOR ASSESSMENT YE AR 2013-14. 2. THE GROUNDS RAISED BY THE REVENUE ARE AS UNDER. 1. THE LD.CIT(A) ERRED IN NOT APPLYING THE RATIO OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF CITIZEN CO-OP SOCIETY LTD V. ACIT (2017) 397 ITR 1 (SC) SINCE THE ASSESSEE IS ALSO CATERING TO THE CATEGORY OF MEMBERS CALLED ASSOCIATE MEMBERS WHICH IS NOT AKIN TO REGULAR MEMBER. 2. THE ID CIT(A) IN THE FACTS AND CIRCUMSTANCES OF THE CASE OF HON'BLE APEX COURT OUGHT TO HAVE CALLED FOR REMAND REPORT I N REGARD TO WHETHER THE ASSESSEE IS A CO-OPERATIVE SOCIETY MEAN T FOR ITS MEMBERS ONLY AND WHETHER ANY INCOME WAS EARNED BY WAY OF IN VESTMENT/LOANS ETC TO NON-MEMBERS. 3. THE LD.CIT(A) ERRED IN COMING TO THE CONCLUSION THAT THE ASSESSEE SOCIETY IS A CO-OPERATIVE SOCIETY MEANT ONLY FOR IT S MEMBERS AND ELIGIBLE FOR DEDUCTION UNDER SECTION 80P(2)(A)(I) I GNORING THE RATIO LAID DOWN BY THE HON'BLE APEX COURT IN THE CASE OF CITIZEN CO-OP ITA NO.03/BANG/2018 PAGE 2 OF 3 SOCIETY LTD. 4. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING, THE ORDER OF THE LEARNED CIT(APPEALS) MAY BE SET ASIDE AND THAT THE ORDER OF THE ASSESSING OFFICER BE RESTORED . 3. AT THE VERY OUTSET, IT WAS SUBMITTED BY LD. AR O F ASSESSEE THAT THE TAX EFFECT IN THE PRESENT CASE IS BELOW RS. 10 LAKHS AND THEREFOR E, AS PER THE LATEST INSTRUCTIONS OF CBDT, THIS APPEAL OF REVENUE IS NOT MAINTAINABLE BECAUSE OF LOW TAX EFFECT. IN REPLY, LD. DR OF REVENUE SUBMITTED A WORKING OF THE AO DATED 08.05.2018 IN RESPECT OF TAX EFFECT AND IT WAS SUBM ITTED BY HER THAT AS PER THIS WORKING OF THE AO, IT CAN BE SEEN THAT THE TAX EFFE CT IN THE PRESENT CASE IS OF RS. 14,16,071/- AND THEREFORE, IT SHOULD BE HELD TH AT THIS APPEAL OF REVENUE IS NOT HIT BY THESE CBDT INSTRUCTIONS. IN THE REJOIND ER, IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT AS PER PARA 25 OF THE ASSESSMENT O RDER, THE DETAILS OF INTEREST AND DIVIDEND RECEIVED FROM CO-OPERATIVE BANKS, NATI ONALIZED BANKS AND OTHER FINANCIAL INSTITUTIONS ASSESSED BY AO AS INCOME FRO M OTHER SOURCES IS NOTED AND AS PER THE SAME, RS. 39,82,792/- IS INTEREST FR OM BDCC. THEREAFTER, HE DRAWN MY ATTENTION TO PARA NO. (B) AND (C) ON PAGE NO. 6 OF THE ORDER OF CIT(A) AND IT WAS POINTED OUT THAT AS PER PARA (B), IT WAS HELD BY CIT(A) THAT INTEREST EARNED ON INVESTMENT MADE IN VARIOUS CO-OPERATIVE S OCIETIES IS ALLOWED U/S. 80P(2)(D) OF IT ACT AND REGARDING INTEREST RECEIVED FROM BDCC / SCHEDULED BANK / PRIVATE BANK, IT WAS HELD THAT DEDUCTION IS NOT ALLOWABLE U/S. 80P(2)(D) OF IT AC AND IT IS HELD SO BY FOLLOWING THE JUDGEMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY AS REPORTED IN395 ITR 611 (KARN). HE POINTED OUT THAT IN VIEW OF THIS FACT THAT REGARDING THE MAJOR AMOUNT OF RS. 39 ,82,792/- OUT OF RS. 46,39,506/-, THE ISSUE IS DECIDED BY CIT(A) AGAINST THE ASSESSEE, THE TAX EFFECT CANNOT BE MORE THAN RS. 10 LAKHS. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND I HA VE GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. I FIND THAT AS PER THE ASSESSME NT ORDER, IT IS NOTED BY THE AO THAT OUT OF INCOME FROM BUSINESS AS PER THE COMPUTA TION OF INCOME FILED BY THE ASSESSEE WITH THE RETURN OF INCOME, THE INCOME FROM BUSINESS IS S HOWN AT ITA NO.03/BANG/2018 PAGE 3 OF 3 RS. 47,01,057/- AND OUT OF THAT, THE AO HAS HELD TH AT AN AMOUNT OF RS. 46,39,506/- IS TO BE ASSESSED AS INCOME FROM OTHER SOURCES AS A CONSEQUENCE, ON THIS AMOUNT DEDUCTION U/S 80P IS DISALLOWED. TH E DETAIL OF SUCH AMOUNT OF RS. 46,39,506/- IS GIVEN BY THE AO IN PARA 25 OF TH E ASSESSMENT ORDER AND IT INCLUDES INTEREST FROM BDCC OF RS. 39,82,792/-. RE GARDING INTEREST FROM BDCC, IT IS HELD BY CIT(A) AS PER PARA (C) ON PAGE NO. 6 OF HIS ORDER THAT SUCH INTEREST FROM BDCC IS NOT ELIGIBLE FOR DEDUCTION U/ S. 80P(2)(D) OF IT ACT. HENCE, IT IS SEEN THAT THE ISSUE REGARDING DEDUCTION U/S. 80P OF RS. 39,82,792/- IS DECIDED BY CIT(A) AGAINST THE ASSESSEE AND HENCE, U NDER THESE FACTS, IT IS SEEN THAT RELIEF ALLOWED BY CIT(A) DOES NOT HAVE A TAX EFFECT OF MORE THAN RS. 10 LAKHS. THEREFORE, IN VIEW OF THE LATEST INSTRUC TION OF CBDT AS PER WHICH IT WAS PRESCRIBED THAT THE REVENUE SHOULD NOT FILE ANY APPEAL BEFORE THE TRIBUNAL IF THE TAX EFFECT IS LESS THAN RS. 10 LAKHS, THE PR ESENT APPEAL OF REVENUE IS NOT MAINTAINABLE AND HENCE, THIS APPEAL IS NOT ADMITTED BECAUSE OF LOW TAX EFFECT AND ACCORDINGLY DISMISSED. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 01 ST JUNE, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.