ACIT, Aurangabad V. M/s Bajaj Auto Ltd, Employees Co-Op, Credit,Society Ltd, Aurangabad

ITA 1047/PUN/2012

• Counselvise Citation: 104724514 RSA 2012
• Duration Of Justice: 1 year(s) 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 24-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANCHAL SHARMA
• Assessee Lawyers: N O N E

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE BEFORE: SHRI G. S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 1047 / P N/ 20 12 ASSESSMENT YEAR : 2009 - 10 THE ASST. COMMISSIONER OF INCOME TA X, CIRCLE - 1, AURANGABAD VS. M/S. BAJAJ AUTO LTD., EMPLOYEES CO - OP. CREDIT SOCIETY LTD., 1, BAJAJ AUTO PREMISES, WALUJ, TQ. GANGAPUR, AURANGABAD (APPELLANT) (RESPONDENT) PAN NO. AAABB0114E APPELLANT BY: SHRI ANCHAL SHARMA RESPONDENT BY: N O N E DATE OF HEARING : 22 - 07 - 2013 DATE OF PRONOUNCEMENT : 26 - 0 8 - 2013 ORDER PER R.S . PADVEKAR , JM : - THIS APPEAL IS FILED BY THE REVENUE CHALLENGING THE IMPUGNED ORDER OF THE LD. CIT(A), AURANGABAD RAISING THE GRIEVANCE BY TAKING THE FOLLOWING TWO GRO UNDS: 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE CIT(A) IS CORRECT IN HOLDING THAT THE ASSESSEE WAS ELIGIBLE FOR CLAIMING THE DEDUCTION U/S. 80P(2)(A)(I) OF THE ACT WHICH IS AVAILABLE FOR INCOME EARNED FROM BUSINESS AND PROFESSION AND NOT FR OM INCOME F ROM OTHER SOURCE? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) IS CORRECT IN HOLDING THAT THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S. 80P(2)(D) EVEN THOUGH, ASSESSEE HAS NOT CLAIMED THE SAME DEDUCTION IN THE RETURN OF INCOM E? 2. THE BRIEFLY STATED FACTS ARE AS UNDER. THE ASSESSEE IS A CO - OPERATIVE SOCIETY PROVIDING CREDIT FACILITIES TO ITS MEMBERS. THE SHORT ISSUE IN CONTROVERSY IS WHETHER THE ASSESSING OFFICER WAS JUSTIFIED IN DISALLOWING THE AMOUNT OF RS.88,34,000/ - WHI CH WAS IN RESPECT OF INTEREST RECEIVED FROM AURANGABAD DISTRICT CENTRAL CO - OPERATIVE BANK (ADCCB) FOR THE PERIOD 01 - 04 - 2008 TO 31 - 03 - 2009 ON THE DEPOSITS WITH 2 ITA NO.1047/PN/2012, BAJAJ AUTO LTD,. AURANGABAD THE SAID BANK. THE ASSESSING OFFICER APPLIED THE DECISION OF THE HON'BLE SUPREME COURT IN THE CA SE OF TOT A GARS COOPERATIVE VS. ITO 322 IT R 283 (SC). THE ASSESSING OFFICER HELD THAT THE AMOUNT INVESTED BY THE ASSESSEE CREDIT SOCIETY WITH THE AURANGABAD DISTRICT CENTRAL CO - OPERATIVE BANK IS OUT OF THE SURPLUS AND HENCE , THE SAME CANNOT BE TREATED AS I NCOME DERIVED FROM PROVIDING CREDIT FACILITIES TO I T S MEMBERS. IN RESPECT OF THE ALTERNATE CLAIM OF THE ASSESSEE SOCIETY THAT THE ENTIRE INTEREST RECEIVED FROM AURANGABAD DISTRICT CENTRAL CO - OPERATIVE BANK IS DEDUCTABLE U/S. 80P(2)(D), THE SAME WAS ALSO R EJECTED. ONE OF THE REASON FOR REJECTING THE CLAIM OF THE ASSESSEE U/S. 80P(2)(D) GIVEN BY THE ASSESSING OFFICER IS THAT IN VIEW OF SUB - SECTION ( 4 ) OF SEC. 80P , THE DEDUCTION HAS WITHDRAWN WHICH WAS OTHERWISE AVAILABLE AND TO THE CO - OPERATIVE BANK AND HEN CE , THE PROVISION OF SEC. 80P(2)(D) OF THE ACT IS NOT APPLICABLE TO ADCCB, NO DEDUCTION CAN BE ALLOWED U/S. 80P(2)(D). THE ASSESSING OFFICER THEREFORE , MADE THE DISALLOWANCE OF RS. 88.34 LACS WHICH WAS IN RESPECT OF INTEREST ON THE DEPOSIT WITH AURANGABAD DISTRICT CENTRAL CO - OPERATIVE BANK (ADCCB) . 3. THE ASSESSEE CARRIED THE ISSUE BEFORE LD. CIT(A). THE LD. CIT(A) ACCEPTED THE PLEA OF THE ASSESSEE THAT THE DECISION IN THE CASE OF TOT A GARS COOPERATIVE VS. ITO (SUPRA) IS DISTINGUISHABLE ON THE FACTS AS I N THE CASE OF SAID SOCIETY IT WAS NOT A CREDIT CO - OPERATIVE SOCIETY. MOREOVER THE SOCIETY BEFORE THE HON'BLE SUPREME COURT WAS PROVID ING MARKET FACILITIES TO I T S FARMER MEMBERS AND THE ACTIVITY OF THE SOCIETY WAS LIMITED IN RESPECT OF FARMER MEMBERS . THE LD. CIT(A) HELD THAT ACTIVITY OF THE ASSESSEE CREDIT SOCIETY IS AT PAR WITH THE ACTIVITY OF THE BANKING AND HENCE , ASSESSEE ENTITLED FOR DEDUCTION U/S. 80P(2)(I) OF THE ACT. THE LD. CIT(A) FURTHER HELD THAT THE INTEREST RECEIVED FROM THE AURANGABAD DISTR ICT CENTRAL CO - OPERATIVE BANK IS ALSO ALLOWABLE DEDUCTION U/S. 80P(2)(D). NOW THE REVENUE IS IN APPEAL BEFORE US. 3 ITA NO.1047/PN/2012, BAJAJ AUTO LTD,. AURANGABAD 4. WE HAVE HEARD THE LD. DR. NONE WAS PRESENT FOR THE ASSESSEE. WE HAVE ALSO PERUSED THE ORDER OF THE AUTHORITIES BELOW. IN OUR OPINION SO FAR AS THE AMOUNT OF INTEREST RECEIVED ON THE DEPOSIT WITH AURANGABAD DISTRICT CENTRAL CO - OPERATIVE BANK IS CONCERNED THE ASSESSING OFFICER HAS NOT PROPERLY APPRECIATED THE PROVISIONS OF LAW . SEC. 80P(2)(D) READS AS UNDER: 80P(1): WHERE, IN THE CASE O F AN ASSESSEE BEING A CO - OPERATIVE SOCIETY, THE GROSS TOTAL INCOME INCLUDES ANY INCOME REFERRED TO IN SUB - SECTION (2), THERE SHALL BE DEDUCTED, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION, THE SUMS SPECIFIED IN SUB - SECTION (2), IN COMP UTING THE TOTAL INCOME OF THE ASSESSEE. 80P(2): THE SUMS REFERRED TO IN SUB - SECTION (1) SHALL BE THE FOLLOWING, NAMELY: (A) .......... (B) . (C) . 2(D): IN RESPECT OF ANY INCOME BY WAY OF INTEREST OR DIVIDENDS DERIVED BY THE CO - OPERATIVE SOCIETY FROM ITS IN VESTMENTS WITH ANY OTHER CO - OPERATIVE SOCIETY, THE WHOLE OF SUCH INCOME; 5. SUB - SEC . ( 4 ) OF SEC. 80P HAS WITHDRAWN THE DEDUCTION TO THE CO - OPERATIVE BANK OTHER THAN PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO - OPERATIVE AGRICULTURAL AND RURAL DEVEL OPMENT BANK W.E.F. THE A.Y. 2007 - 08. THE SAID PROVISION IS APPLICABLE TO THE AURANGABAD DISTRICT CENTRAL CO - OPERATIVE BANK (ADCCB) IN WHICH T HE ASSESSEE SOCIETY HAS KEPT DEPOSIT . THE WITHDRAWAL OF DEDUCTION BY INSERTION OF SUB - SECTION ( 4 ) OF SEC. 80P DOE S NOT CHANGE STATUS OF AURANGABAD DISTRICT CENTRAL CO - OPERATIVE BANK AS A CO - OPERATIVE SOCIETY WHICH IS CONTEMPLATED IN SEC. 80P( 1 ) OF THE ACT. WE, THEREFORE, HOLD THAT THE INTEREST RECEIVED ON THE DEPOSIT WITH THE AURANGABAD DISTRICT CENTRAL CO - OPERAT IVE BANK BY THE ASSESSEE ON THE DEPOSITS ARE SQUARELY COVERED U/S. 80P(1)(D) AND T HE INTEREST RECEIVED ON DEPOSIT KEPT WITH THE AURANGABAD DISTRICT CENTRAL CO - OPERATIVE BANK IS AN ALLOWABLE DEDUCTION. SO FAR AS THE FINDING OF THE LD. CIT(A) THAT THE PROVI SIONS OF SEC. 80P(2)(A)(I) , I N OUR OPINION THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF 4 ITA NO.1047/PN/2012, BAJAJ AUTO LTD,. AURANGABAD TOT A GARS COOPERATIVE VS. ITO (SUPRA) IS AGAINST THE ASSESSEE AS INTEREST RECEIVED ON DEPOSITS WITH AURANGABAD DISTRICT CENTRAL CO - OPERATIVE BANK CANNOT BE S AID TO BE THE INCOME DERIVED FROM PROVIDING CREDIT FACILITIES TO ITS MEMBERS. WE, ACCORDINGLY, ANSWER THE GROUND TAKEN BY THE REVENUE. BUT, FINALLY WE HAVE CONFIRMED ORDER OF LD. CIT(A) GIVING RELIEF TO THE ASSESSEE U/S. 80P(2)(D). 6. IN THE RESULT, THE REVENUES APPEAL IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 26 - 0 8 - 20 1 3 SD/ - SD/ - ( G.S. PANNU ) ( R.S. PADVEKAR ) ACCOUNTANT MEMBER JUDICIAL MEMBER RK /PS PUNE , DATED : 26 TH AUGUST, 20 1 3 COPY TO 1 DE PARTMENT 2 ASSESSEE 3 THE CIT(A), AURANGABAD 4 THE CIT, AURANGABAD 5 THE DR, ITAT, B PUNE . 6 GUARD FILE. //TRUE COPY// BY ORDER PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE