Gujarat Laxmi Majur Kamgar Sahakari Mandli Ltd., Gandhinagar V. The Income tax Officer,Ward-2, Gandhinagar

ITA 1065/AHD/2008

• Counselvise Citation: [2009] 114 COUNSELVISE.COM (IT) 9210 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 16-07-2009
• Assessment Year: 2002-2003
• Appeal Filed On: 24-03-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEETA SHAH
• Assessee Lawyers: MANOJ LETINWALA
• Keywords: Business income; Revised return; Set aside
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C AHMEDABAD BEFORE SHRI P.K.BANSAL, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER ITA NO.1065/AHD/2008 ASSESSMENT YEAR: 2002-03 DATE OF HEARING:16.7.09 DRAFTED:17.7.09 GUJARAT LAXMI MAJUR KAMGAR SAHAKARI MANDLI LTD., PLOT NO.196, SECTOR:24, INDIRANAGAR, GANDHINAGAR PAN NO.AAAAG1218P V/S . INCOME TAX OFFICER, WARD-2, GANDHINAGAR (APPELLANT) .. (RESPONDENT) ITA NO.1192/AHD/2008 ASSESSMENT YEAR: 2004-05 GUJARAT LAXMI MAJUR KAMGAR SAHAKARI MANDLI LTD., PLOT NO.196, SECTOR:24, INDIRANAGAR, GANDHINAGAR PAN NO.AAAAG1218P V/S . INCOME TAX OFFICER, WARD-2, GANDHINAGAR (APPELLANT) .. (RESPONDENT) ITA NO.3575/AHD/2008 ASSESSMENT YEAR: 2005-06 GUJARAT LAXMI MAJUR KAMGAR SAHAKARI MANDLI LTD., PLOT NO.196, SECTOR:24, INDIRANAGAR, GANDHINAGAR PAN NO.AAAAG1218P V/S . INCOME TAX OFFICER, WARD-2, GANDHINAGAR (APPELLANT) .. (RESPONDENT) ITA NO.1065, 1192, 3575/AHD/2008 A.YS. 02-03,04-05 & 05-06 GLMKSM LTD. V. ITO WD-2 GNR PAGE 2 ASSESSEE BY :- SHRI MANOJ LETINWALA REVENUE BY:- SMT. NEETA SHAH, SR. DR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THESE THREE APPEALS BY THE ASSESSEE ARE ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS), GANDHINAGAR. THE ASSESSMENTS WERE FRAMED BY THE INCOME-TAX OFFICER, WARD-2, GANDHINAG AR U/S. 143(3) R.W.S. 144 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT) VIDE HIS DIFFERENT ORDERS DATED 21-03-2005, 09-11-2006 & 19-12-2007 FOR THE A SSESSMENT YEARS 2002-03, 2004-05 AND 2005-06. 2. THE ONLY COMMON ISSUE IN THESE APPEALS OF THE AS SESSEE IS AS REGARDS TO THE ASSESSMENT OF INTEREST INCOME, WHETHER THE SAME IS BUSINESS INCOME OR INCOME FROM OTHER SOURCES THEREBY DISALLOWING THE DEDUCTIO N U/S.80P(2)(A)(VI) OF THE ACT. 3. AT THE OUTSET THE LD. SR. DR, SMT. NEETA SHAH AR GUED THAT THIS APPEAL IS NOT MAINTAINABLE IN VIEW OF THE FACT THAT THE ASSESSEE HAS NOT MADE CLAIM BEFORE THE ASSESSING OFFICER BY FILING REVISED RETURN AND THE CIT(A) HAS RIGHTLY DISMISSED THE APPEAL OF THE ASSESSEE AND UPHELD THE ACTION OF THE ASSESSING OFFICER IN NOT ENTERTAINING THE CLAIM OF THE ASSESSEE ON THIS LEGA L ISSUE. SHE REFERRED TO RELEVANT PARAS-3 TO 8 OF CIT(A)S ORDER, WHICH READ AS UNDER:- 3. THE ASSESSEE WAS ALSO CLAIMING DEDUCTION U/S.80 P(2)(A)(VI) OF RS.74,443/- . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, VID E LETTER DATED 02-03-2005, THE APPELLANT CONTENDED THAT THE INTEREST EARNED ON SSNL DEPOSIT BE TREATED AS ITS BUSINESS INCOME ONLY AS THE DEPOSITS WERE MA DE FOR THE PURPOSE OF ACQUIRING BUSINESS CONTRACTS. THE ASSESSING OFFICER REJECTED THE APPELLANTS CLAIM SAYING THAT THE ASSESSEE HAS NEVER MADE ANY A DDITIONAL CLAIM FOR FURTHER REFUND ON THIS GROUND BY FILING A REVISED R ETURN WITHIN THE PRESCRIBED TIME LIMIT AND ONLY WHEN THE MATTER WAS TAKEN UP FO R SCRUTINY THIS ISSUE HAS BEEN RAISED. HENCE, HE DID NOT ENTERTAIN THE APPELL ANTS CLAIM. ITA NO.1065, 1192, 3575/AHD/2008 A.YS. 02-03,04-05 & 05-06 GLMKSM LTD. V. ITO WD-2 GNR PAGE 3 4. THE CIT(A) VIE HIS AFORESAID DECISION DATED 28-0 9-2005, IN A DETAILED ORDER HELD THAT THE RECEIPTS BY WAY OF INTEREST ARE NOT A TTRIBUTABLE TO THE COLLECTIVE DISPOSAL OF LABOUR OF MEMBERS OF THE SOCIETY AND HE NCE NOT ELIGIBLE FOR DEDUCTION U/S.80P(2)(A)(VI) OF THE ACT. 5. WHEN THE MATTER CAME UP BEFORE THE ITAT, AFTER H EARING BOTH SIDES, THE BENCH DECIDED THAT THE CIT(A) HAS NOT GIVEN ANY FIN DING ON AN IMPORTANT ASPECT OF THE CASE, NAMELY, THE ASSESSING OFFICERS ACTION OF REJECTING THE CLAIM ON THE GROUND OF ASSESSEE NOT FILING A REVISE D RETURN U/S.139(5). THEREFORE, THE MATTER WAS SET ASIDE AND RESTORED TO CIT(A). 6. BEFORE ME WHILE A MAJOR PART OF THE ARGUMENTS WA S REPETITION REGARDING THE ISSUE THAT THE INTEREST ON SSNL DEPOSITS IS BUSINES S INCOME OR NOT, ON THE ISSUE OF REVISED RETURN, IT WAS STATED THAT THE ASS ESSEE HAD TAKEN STAND FROM THE VERY BEGINNING IN THE ASSESSMENT PROCEEDINGS TH AT INTEREST INCOME IS BUSINESS INCOME. BY MISTAKE THE CLAIM FOR EXEMPTION U/S.80P(2)(A)(VI) HAD NOT BEEN MADE AT THE TIME OF FILING OF INCOME TAX R ETURN BUT THE SAME WAS MADE BY FURNISHING REVISED STATEMENT OF TOTAL INCOM E. IT WAS STATED THAT REVISED RETURN WAS NOT FILED BECAUSE:- I) ALL FACTS REMAIN THE SAME. II) ALL FIGURES REMAIN THE SAME III) IT IS A MISTAKE APPARENT FROM RECORD. 7. IN VIEW OF SPECIFIC DIRECTIONS OF THE ITAT TO DE CIDE ONLY ON THE ISSUE OF REVISED RETURN AND MY PREDECESSOR HAVING ALREADY DE CIDED THE ISSUE, THE ARGUMENTS WITH RESPECT TO INTEREST INCOME BEING BUS INESS INCOME IN THE CONTEXT, WAS A REDUNDANT EXERCISE AND IS NOT BEING TAKEN UP AFRESH. THE EARLIER ORDER OF CIT(A) DATED 28-09-2005 STANDS ON THIS ISSUE. 8. AS FAR AS THE ISSUE OF REVISED RETURN IS CONCERN ED, THE MATTER STANDS SETTLED IN VIEW OF RECENT JUDGMENT BY SUPREME COURT IN THE CASE OF GOETZE (I) LTD. V. CIT 284 ITR 323. THE APEX COURT HAS VERY CLEARLY L AID DOWN THAT THERE IS NO OTHER WAY TO ALTER THE CLAIM BEFORE THE ASSESSING O FFICER EXCEPT TO FILE A REVISED RETURN. THE DECISION IS SQUARELY APPLICABLE TO THE FATS OF THE CASE. IN FACT, NOT ONLY THE ASSESSEE DID NOT FILE A REVISED RETURN, EVEN THE CLAIM MADE BY IT VIDE ITS LETTER DATED 02-03-2005 IS BEYOND TH E TIME LIMIT OF ONE YEAR FROM THE END OF THE ASSESSMENT YEAR STIPULATE IN SECTION 139(5). THEREFORE, UNDER NO CIRCUMSTANCES THE CLAIM OF THE ASSESSEE COULD BE TREATED AS BEING A VALID CLAIM ON THE SAME FOOTING AS THE REVISED CLAIM. THE REFORE, THE ACTION OF THE ASSESSING OFFICER ON NOT ENTERTAINING THE ASSESSEE S CLAIM ON THIS LEGAL ISSUE IS UPHELD. 4. IN VIEW OF THE ABOVE, THE LD. DR STATED THAT THE SE APPEALS ARE NOT MAINTAINABLE. ON THE OTHER HAND, LD. COUNSEL FOR T HE ASSESSEE STATED THAT EVEN THE LOWER AUTHORITIES HAVE ACCEPTED THE INTEREST EARNED IS BUSINESS INCOME. THE LD. COUNSEL FOR THE ASSESSEE STATED THE FACTS THAT THE ASSESSEE IS THE CO-OPERATIVE SOCIETY HAVING MEMBERS OF LABOUR COMMUNITY AND IS E NGAGED IN DRAINAGE & PIPE ITA NO.1065, 1192, 3575/AHD/2008 A.YS. 02-03,04-05 & 05-06 GLMKSM LTD. V. ITO WD-2 GNR PAGE 4 LINE WORK UNDER GOVERNMENT DEPARTMENT. THE ASSESSEE HAD PUT DEPOSIT OR GIVEN FIXED DEPOSIT OF BANK WITH THE GOVERNMENT DEPARTMEN T AS TENDER DEPOSIT, EARNEST MONEY DEPOSIT, SECURITY DEPOSIT ETC. AND ON SUCH D EPOSIT IT EARNED INTEREST INCOME. THE ASSESSING OFFICER HAD CONSIDERED INTEREST INCOM E AS INCOME FROM OTHER SOURCES AND NOT INCOME FROM BUSINESS AND TAXED IT ACCORDING AND IN VIEW OF WHICH THE ASSESSEES INCOME IS ASSESSED RS.1,97,480/-. THE A SSESSEE HAD TAKEN DEPOSIT OF BANK IN NORMAL COURSE OF HIS BUSINESS AND GIVEN FD TO GOVERNMENT DEPARTMENT TO COMPLY WITH THE TERMS OF SANCTION OF WORK EXECUTED BY THE MANDLI. THE INTEREST INCOME IS THE BUSINESS INCOME OF THE MANDLI THE IN TEREST INCOME IS NOT FOR THE INVESTMENT OF SURPLUS FUND BUT IT IS FOR THE BUSINE SS INCOME OF THE MANDLI AND ON WHICH DEDUCTION U/S.80P(2)(A)(VI) SHALL BE GIVEN SO THAT THE MANDLI TAXABLE INCOME WILL BECOME NIL. AS FAR AS THE ISSUE OF REVISED RE TURN, THE LD. COUNSEL STATED THAT THE DECISION OF HON'BLE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD. (SUPRA) IS NOT APPLICABLE TO THE TRIBUNAL. IT WAS ALSO CLAIMED TH AT THE ASSESSEE HAS MADE CLAIM BEFORE THE ASSESSING OFFICER AND EVEN BEFORE CIT(A) . IN VIEW OF THESE ARGUMENTS THE LD. COUNSEL URGED THE BENCH TO ALLOW THE CLAIM OF T HE ASSESSEE. 5. AFTER HEARING THE RIVAL CONTENTIONS, FIRST OF AL L, WE HAVE GONE THROUGH THE JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF GOETZE (INDIA) LTD. (SUPRA), WHEREIN IT IS HELD AS UNDER:- THE DECISION IN QUESTION IS THAT THE POWER OF THE TRIBUNAL UNDER SECTION 254 OF THE INCOME-TAX ACT, 1961, IS TO ENTERTAIN FOR TH E FIRST TIME A POINT OF LAW PROVIDED THE FACT ON THE BASIS OF WHICH THE ISSUE O F LAW CAN BE RAISED BEFORE THE TRIBUNAL. THE DECISION DOES NOT IN AN WAY RELAT E TO THE POWER OF THE ASSESSING OFFICER TO ENTERTAIN A CLAIM FOR DEDUCTIO N OTHERWISE THAN BY FILING A REVISED RETURN. IN THE CIRCUMSTANCES OF THE CASE, W E DISMISS THE CIVIL APPEAL. HOWEVER, WE MAKE IT CLEAR THAT THE ISSUE IN THIS CA SE IS LIMITED TO THE POWER OF THE ASSESSING AUTHORITY AND DOES NO IMPINGE ON THE POWER OF THE INCOME-TAX APPELLATE TRIBUNAL UNDER SECTION 254 OF THE INCOME- TAX ACT, 1961. THERE SHALL BE NO ORDER AS TO COSTS. IN VIEW OF THE ABOVE, THE HON'BLE APEX COURT HAS VE RY CATEGORICALLY MADE IT CLEAR THAT THE ISSUE BEFORE HON'BLE APEX COURT WAS LIMITED TO THE POWER OF THE ASSESSING AUTHORITY AND DOES NO IMPINGE ON THE POWER OF THE I NCOME-TAX APPELLATE TRIBUNAL UNDER SECTION 254 OF THE ACT. THE FACTS IN THE PRES ENT CASE ARE THAT THE ASSESSEE IS THE CO-OPERATIVE SOCIETY HAVING MEMBERS OF LABOUR C OMMUNITY AND IS ENGAGED IN ITA NO.1065, 1192, 3575/AHD/2008 A.YS. 02-03,04-05 & 05-06 GLMKSM LTD. V. ITO WD-2 GNR PAGE 5 DRAINAGE & PIPE LINE WORK UNDER GOVERNMENT DEPARTME NT. THE ASSESSEE HAD PUT DEPOSIT OR GIVEN FIXED DEPOSIT OF BANK WITH THE GOV ERNMENT DEPARTMENT AS TENDER DEPOSIT, EARNEST MONEY DEPOSIT, SECURITY DEPOSIT E TC. AND ON SUCH DEPOSIT IT EARNED INTEREST INCOME. THE ASSESSING OFFICER HAD C ONSIDERED INTEREST INCOME AS INCOME FROM OTHER SOURCES AND NOT INCOME FROM BUSIN ESS AND TAXED IT ACCORDINGLY. THE ASSESSEE HAD TAKEN DEPOSIT OF BANK IN NORMAL CO URSE OF HIS BUSINESS AND GIVEN FD TO GOVERNMENT DEPARTMENT TO COMPLY WITH THE TERM S OF SANCTION OF WORK EXECUTED BY THE MANDLI. WE ARE OF THE VIEW THAT THE INTEREST INCOME OF THE ASSESSEE IS BUSINESS INCOME OF THE MANDLI AND THE INTEREST I S NOT FOR THE INVESTMENT OF SURPLUS FUND BUT IT IS FOR THE BUSINESS INCOME OF THE MANDL I. ON THIS INCOME THE ASSESSEE IS ENTITLED FOR DEDUCTION U/S.80P(2)(A)(VI) AND ACCORD INGLY WE DIRECT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE. 6. IN THE RESULT, THESE APPEALS OF THE ASSESSEE ARE AL LOWED. ORDER PRONOUNCED IN OPEN COURT ON 04/09/2009 SD/- SD/- (P.K.BANSAL) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD, DATED : 04/09/2009 *DKP COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT(APPEALS)-GNR 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD