The Patran Primary Co-op Agricultural Development Bank Ltd., Patran V. ACIT, Circle, Sangrur

ITA 1017/CHANDI/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4378 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 01-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: DIPINDER SINGH
• Keywords: Set aside
• Section: 143(1); 80P

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES, SMC, CHANDIGARH BEFORE SHRI N.K. SAINI, VICE PRESIDENT ITA NO.1017/CHD/2018 ASSESSMENT YEAR: 2014-15 THE PATRAN PRIMARY CO-OP VS. THE ACIT, AGRICULTURAL DEVELOPMENT BANK LTD. CIRCLE, SANGRUR C/O M/S AMARJIT ASSOCIATES, PUNJAB # 7-S, SANT NAGAR, PATIALA PUNJAB PAN NO. AAAAT3912H (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. DIPINDER SINGH, ADVOCATE REVENUE BY : SH. MANJIT SINGH, SR. DR DATE OF HEARING : 14/03/2019 DATE OF PRONOUNCEMENT : 14/03/2019 ORDER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DT. 15/06/2018 OF LD. CIT(A)-, PATIALA. 2. IN THE PRESENT APPEAL ASSESSEE HAS RAISED THE FO LLOWING GROUNDS: 1) THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE ADDITION OF RS. 90,000/- BY DISALLOWING THE CLAIM OF EXEMPTION OF SECTION 80 OF THE INCOME TAX ACT, 1961 , ON MISC. INCOME RECEIVED BY THE APPELLANT, WHICH ARE NOT APPLICABLE AND AS S UCH THE ADDITION IS ILLEGAL, ARBITRARY AND UNJUSTIFIED. 2) THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) H AS ERRED IN LAW AS WELL AS ON FACTS IN UPHOLDING THE DISALLOWANCE OF DEDUCTION EQUAL TO THE ASSESSED INCOME U/S 80 P (2) (A) (I) OF THE ACT. 3) THAT THE APPELLANT CRAVES LEAVE TO ADD, DELETE OR A MEND ANY GROUND OF THE APPEAL BEFORE THE APPEAL IS FINALLY DISPOSED OF. 3. FACTS OF THE CASE IN BRIEF FARE THAT THE ASSESSE E FILED ITS RETURN OF INCOME ON 15/09/2014 DECLARING NIL INCOME WHICH WAS PROCES SED UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED T O AS ACT), LATER ON THE CASE WAS SELECTED FOR SCRUTINY. 4. DURING THE COURSE OF ASSESSMENT PROCEEDING THE A SSESSING OFFICER OBSERVED THAT THE ASSESSEE WAS SHOWING FOLLOWING IN COME IN ITS P&L ACCOUNT: SR. NO. HEAD OF INCOME INCOME SHOWN 1 PENAL INTEREST RECEIVED 995433 2 MISC. INCOME 90000 TOTAL 1085433 2 5. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE A FORESAID INCOMES WERE NOT DERIVED FROM DIRECT BUSINESS ACTIVITY OF THE ASSESS EE HENCE IT WAS NOT ENTITLED TO CLAIM DEDUCTION UNDER SECTION 80P OF THE ACT. ACCOR DINGLY THE AFORESAID AMOUNT WAS ADDED TO THE INCOME OF THE ASSESSEE. 6. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND FURNISHED THE WRITTEN SUBMISSION WHICH HAS BEEN INC ORPORATED IN PARA 4.2 OF THE ASSESSMENT ORDER, FOR THE COST OF REPETITION THE SA ME IS NOT REPRODUCED HEREIN. 7. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE DELETED THE ADDITION OF RS. 9,95,433/- AND SUSTAINED THE ADDITI ON OF RS. 90,000/- BY OBSERVING AS UNDER: IN THE INSTANT CASE AS REGARD THE MONEY RECEIVED ON CA (CURRENT) ACCOUNTS, THE FACTS OF THE CASE ARE IDENTICAL WITH THOSE IN THE I N THE CASE OF GUTTIGEDARARA CREDIT COOP SOCIETY LTD VS. ITO (2015) 377 ITR 464 (KARNATAKA H.C). THE APPELLANT WAS ONLY IN THE BUSINESS OF CREDIT SERVICES TO ITS MEMBERS. AS REGARDS THE PENAL INTEREST OF RS. 9,95,433; FROM THE FACTS IT IS CLEA R THAT THE PENAL INTEREST WAS FROM DELAYED PAYMENT OF INTEREST BY MEMBERS AS PART AND PARCEL OF THE MAIN BUSINESS OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS. THE SAME IS ELIGIBLE FOR DEDUCTION U/S 80P(2)(A)(I). AS REGARDS THE MISCELLANEOUS INCOME O F RS. 90,000/- THE APPELLANT, WHILE AVERRING THAT HE HAS THE RIGHT TO PRODUCE ADD ITIONAL EVIDENCE U/S 46A, HAS PRODUCED NOTHING TO ESTABLISH THAT THE MISCELLANEOU S INCOME IS ATTRIBUTABLE TO THE PRIMARY BUSINESS OF THE APPELLANT COOPERATIVE SOCIETY. IN MY CONSIDERED VIEW THE ORDER OF THE LD AO DOES NOT CALL FOR INTERFEREN CE IN DENYING DEDUCTION U/S 80P(2)(A)(I) ON THIS AMOUNT. THE DENIAL OF DEDUCTIO N U/S 80P (2)(A)(I) IS THEREFORE RESTRICTED TO RS. 90,000/-. ON THIS COUNT I DIFFER FROM THE ORDER OF THE LD. CIT(A)-3 LUDHAINA IN THE APPELLANT'S OWN CASE FOR A.Y. 2013- 14 MENTIONED SUPRA. 8. NOW THE ASSESSEE IS IN APPEAL. 9. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ALL THE DETAILS RELATING TO MISCELLANEOUS INCOME OF RS. 90,000/- WERE FURNISHED TO THE ASSESSING OFFICER. IT WAS FURTHER SUBMITTED THAT SAID INCOME WAS DIRECTLY RELATED TO THE BUSINESS ACTIVITY OF THE ASSESSEE. IT WAS EXPLAINED THAT THE SAID INCOME RELATED TO THE ARBITRATION CHARGES AND THE ASSESSEE ALSO INCURRED THE EXPENSE, THEREFORE AT THE MOST THE SAID INCOME COULD HAVE BEEN ADJUSTED AGAIN ST THE EXPENSES INCURRED BY THE ASSESSEE. HE ALSO FURNISHED THE DETAILS OF T HE INCOME (COPY OF WHICH IS PLACED AT PAGE NO. 11 TO 13 OF THE ASSESSEES PAPER BOOK). IT WAS ACCORDINGLY SUBMITTED THAT THE ASSESSEE WAS ENTITLED FOR DEDUCT ION UNDER SECTION 80P OF THE ACT, SINCE THE MISCELLANEOUS INCOME AMOUNTING TO RS . 90,000/- WAS EARNED FROM BUSINESS ACTIVITY FOR WHICH THE ASSESSEE HAD BEEN S ET UP. 10. IN HIS RIVAL SUBMISSIONS THE LD. SR. DR STRONGL Y SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT ASSESS EE HAD NOT PRODUCED ANY DOCUMENT BEFORE THE LD. CIT(A) TO ESTABLISH THAT TH IS MISCELLANEOUS INCOME WAS 3 ATTRIBUTABLE TO THE PRIMARY BUSINESS OF THE ASSESSE E SOCIETY. IT WAS FURTHER SUBMITTED THAT THE DETAILS NOW FURNISHED BY THE ASS ESSEE WERE NOT AVAILABLE TO THE ASSESSING OFFICER OR THE LD. CIT(A), THEREFORE, AT THE MOST THIS ISSUE MAY BE SET ASIDE TO THE LD. CIT(A) FOR VERIFICATION AND ADJUDI CATION. 11. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAR EFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE I T IS NOTICED THAT THE LD. CIT(A) SUSTAINED THE ADDITION OF RS. 90,000/- FOR THE REAS ONS THAT THE ASSESSEE COULD NOT PRODUCED ANYTHING TO ESTABLISH THAT THE MISCELLANEO US INCOME WAS ATTRIBUTABLE TO THE PRIMARY BUSINESS OF THE ASSESSEE SOCIETY. NO W THE ASSESSEE HAD FURNISHED THE DETAILS OF THE MISCELLANEOUS INCOME WHICH WAS C LAIMED TO BE ON ACCOUNT OF ARBITRATION CHARGES. HOWEVER THE SAID DETAIL WAS NO T AVAILABLE TO THE ASSESSING OFFICER OR THE LD. CIT(A), I THEREFORE, DEEM IT APP ROPRIATE TO SET ASIDE THIS ISSUE TO THE FILE OF THE LD. CIT(A) TO BE ADJUDICATED AFRESH IN ACCORDANCE WITH LAW AFTER PROVIDING DUE AND REASONABLE OPPORTUNITY OF BEING H EARD TO THE ASSESSEE. 12. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 14/03/2019.) SD/- (N.K. SAINI) VICE PRESIDENT PLACE: CHANDIGARH DATED : 14/03/2019 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR