The Tarapur Nagrik Co.-Op. Society Ltd., Vadodara V. The DCIT, Circle-1(3), Vadodara

ITA 1088/AHD/2019

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 7124 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 5 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-12-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 26-06-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271(1)(c); 64; 72

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD (through web-based video conferencing platform) BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT ITA Nos. 1087 & 1088/Ahd/2019 Assessment Year :2013-14 & 2014-15 The Tarapur Nagrik Co-op Credit Society Ltd., Nr. Urban Bank, Railway Station Road, Tarapur-388180 PAN : AAAAT 9416 C Vs. DCIT, Circle-1(3), Vadodara अपीलाथ牸 अपीलाथ牸अपीलाथ牸 अपीलाथ牸/ (Appellant) 灹瀄 य 灹瀄 य灹瀄 य 灹瀄 यथ牸 थ牸थ牸 थ牸/ (Respondent) Assessee by : None Revenue by : Shri Urjit Shah, Sr. DR सुनवाई क琉 तारीख सुनवाई क琉 तारीखसुनवाई क琉 तारीख सुनवाई क琉 तारीख/Date of Hearing : 08/11/2021 घोषणा क琉 तारीख /Date of Pronouncement: 02/12/2021 आदेश आदेशआदेश आदेश/O R D E R The present two appeals are directed at the instance of the assessee against separate orders of learned Commissioner of Income-Tax (Appeals)- 5,Vadodara [“CIT(A)” in short] dated 11.04.2019 passed for Assessment Years2013-14 & 2014-15. 2. In response to the notice of hearing, no one has come present on behalf of the assessee. However, with the assistance of learned Departmental Representative, I have gone through the record carefully and proceed to decide these appeals ex-parte qua the assessee. 3. In Assessment Year 2013-14, the grievance of the assessee is that the learned CIT(A) has erred in confirming the addition of Rs.6,06,180/-; whereas in Assessment Year 2014-15, the grievance of the assessee is that learned CIT(A) has erred in confirming the addition of Rs.2,92,515/-. The facts in both the years are common; therefore, for the facility of reference, I take the facts from Assessment Year 2013-14. SMC-ITA Nos. 1087 & 1988/Ahd/2019 The TarapurNagrikCoOp Credit Soc Ltd Vs. DCIT For AY: 2013-14 & 2014-15 2 4. The brief facts of the case are that the assessee is a Credit Co-operative Society engaged in the business of providing credit facility to its Members. It has filed its return of income on 28.09.2013 declaring total income at Rs.8,290/- in Assessment Year 2013-14. In Assessment Year 2014-15, it has declared Nil income in the return filed on 26.11.2014. The case of the assessee was selected for scrutiny assessment in both the years. The learned Assessing Officer has recorded the finding that the assessee has earned interest income from nationalized bank, i.e., other than its Members or other Co-operative Societies. Therefore, he worked out a sum of Rs.6,06,180/- in Assessment Year 2013-14 and Rs.2,92,515/- in Assessment Year 2014-15 which is required to be excluded from the deduction admissible under Section 80P(2)(a)(i) of the Act. The working made by him in paragraph No.5.1.9 in AY 2013-14 and paragraph No.3.1.9 in AY 2014-15 read as under:- AY 2013-14 “5.1.9 Accordingly out of an amount of Rs. 15,09,905/-, claimed as deduction u/s.80P(2)(a)(i), amount not qualifying for deduction needs to be worked out. On gross receipts of Rs. 1,09,06,710/-, total income is worked out of Rs.15,18,195 /-. As such on gross interest receipt from non credit cooperative banks of Rs. 43,78,709/-, profit which would not quality for deduction u/s 80P(2)(a)(i) would work out to be Rs. 6,06,180/- (43,78,709 x 15,09,905 / 1,09,06,710). Same is therefore not considered for deduction and balance of Rs.9,03,725/- is allowed as deduction u/s.8oP(2)(a)(i) of the Act. However, since the income to the tune of Rs.6,06,180/- is treated as income under the head income from other sources, deduction of Rs.50,000/- as per the provisions of section 80P(2)(c)(ii) is being allowed. Penalty proceedings u/s. 271(1)(c) of the Act is also initiated for furnishing inaccurate particulars of income.” AY 2014-15 “3.1.9 Accordingly out of an amount of Rs. 15,72,825-, claimed as deduction u/s.80P(2)(a)(i), amount not qualifying for deduction needs to be worked out. On gross receipts of Rs. 1,16,86,839/-, total income is worked out of NIL. As such on gross interest receipt from non credit cooperative banks of Rs.21,73,523/-, profit which would not quality for deduction u/s 80P(2)(a)(i) would work out to be Rs.2,92,515/- (21,73,523 x 15,72,825 / 1,16,86,839). SMC-ITA Nos. 1087 & 1988/Ahd/2019 The TarapurNagrikCoOp Credit Soc Ltd Vs. DCIT For AY: 2013-14 & 2014-15 3 Same is therefore not considered for deduction and balance of Rs.12,80,310/- is allowed as deduction u/s.8oP(2)(a)(i) of the Act. However, since the income to the tune of Rs.2,92,515/- is treated as income under the head income from other sources, deduction of Rs.50,000/- as per the provisions of section 80P(2)(c)(ii) is being allowed. Penalty proceedings u/s. 271(1)(c) of the Act is also initiated for furnishing inaccurate particulars of income.” 5. Appeal to the learned CIT(A) did not bring any relief to the assessee. 6. I have gone through the record carefully. A perusal of the impugned order would reveal that the learned Assessing Officer has nowhere called out the exact figure of interest income earned from nationalized bank. It is pertinent to note that any interest income earned from its Members or any investments made with the co-operative societies will qualify for the grant of deduction under Section 80P(2) and 80P(2)(d) of the Act. The Assessing Officer has worked out exclusion of income from the eligible amount under some formula without disclosing what is exact interest amount earned from nationalized bank, what are the expenditure and how he has worked out the disallowance!? I have extracted supra the findings of the learned Assessing Officer for both the assessment years. It is totally not discernable. Apart from this finding, the Assessing Officer further nowhere recorded the basic facts. In Assessment Year 2013-14, in paragraph No.3.1, he simply observed that assessee has gross receipt of Rs.1,09,06,710/-; while the interest earned on deposits with other banks other than Co-Operative Society or Banks is shown at Rs.43,78,709/-. It is pertinent to observe that if investment has been made with the Co-operative Bank, then it will qualify for deduction under Section 80P(2)(d) of the Act. Therefore, I allow both these appeal statistically and remit the issue to the file of the Assessing Officer for re-adjudication. The learned Assessing Officer shall examine the issue afresh in the light of judgment of Hon’ble Gujarat High Court in the case of State Bank of India vs. CIT, reported in [2016] 72 taxmann.com 64 and keeping in mind the provisions of Section 80P(2)(d) of the Act. It is also to be kept in mind that a co-operative bank first SMC-ITA Nos. 1087 & 1988/Ahd/2019 The TarapurNagrikCoOp Credit Soc Ltd Vs. DCIT For AY: 2013-14 & 2014-15 4 happens to be a society; therefore, interest income earned from investment with co-operative bank would qualify for grant of deduction under Section 80P(2)(d) of the Act. 7. With the above observations, the issues in both the appeals are remitted back to the file of the Assessing Officer. It is needless to say that the observations made by me while disposing of these appeals will not impair or injure the case of the Assessing Officer or will not cause any prejudice to the defence/explanation of the assessee. The observation made by me in the above paragraphs is for guidance purpose only. The learned Assessing Officer shall re-adjudicate the issue afresh in accordance with law. 8. In the result, both the appeals filed by the assessee are allowed for statistical purposes. Order pronounced in the Court on 2 nd December, 2021 at Ahmedabad. Sd/- (RAJPAL YADAV) VICE PRESIDENT Ahmedabad; Dated 02/12/2021 *Bt आदेश क琉 灹ितिलिप अ灡ेिषत आदेश क琉 灹ितिलिप अ灡ेिषतआदेश क琉 灹ितिलिप अ灡ेिषत आदेश क琉 灹ितिलिप अ灡ेिषत/Copy of the Order forwarded to : 1. अपीलाथ牸 / The Appellant 2. 灹瀄यथ牸 / The Respondent. 3. संबंिधत आयकर आयु猴 / Concerned CIT 4. आयकर आयु猴(अपील) / The CIT(A) 5. िवभागीय 灹ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड榁 फाईल / Guard file. आ आआ आदेशानुसार देशानुसारदेशानुसार देशानुसार/BY ORDER, TRUE COPY उप उपउप उप/सहायक पंजीकार सहायक पंजीकारसहायक पंजीकार सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, अहमदाबाद अहमदाबादअहमदाबाद अहमदाबाद / ITAT, Ahmedabad