Income Tax Officer, Sitapur V. Co-Operative Cane Development, Sitapur

ITA 109/LKW/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1073 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 1 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2018
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 07-03-2018
• Assessment Year: 2013-2014
• Appeal Filed On: 03-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI. T.S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NO. 108/LKW/2017 ASSESSMENT YEAR: 2013 - 14 INCOME TAX OFFICER SITAPUR V. SAHKARI GANNA V IKAS SAMITI LTD. BISWAN SITAPUR T AN /PAN : AADTS9570L (APP ELL ANT) (RESPONDENT) ITA NO. 10 9 /LKW/2017 ASSESSMENT YEAR: 2013 - 14 INCOME TAX OFFICER SITAPUR V. CO - OPERATIVE CANE DEVELOPMENT, MAHOLI SITAPUR T AN /PAN : AAATC4152F (APP ELL ANT) (RESPONDENT ) APPELLANT BY: SMT. ALKA SINGH, D.R. RESPONDENT BY: SHRI SHUBHAM RASTOGI, C.A. DATE OF HEARING: 07 0 3 201 8 DATE OF PRONOUNCEMENT: 13 0 3 201 8 O R D E R PER P ARTHA SARATHI CHAUDHURY, J.M : THESE APPEALS PREFERRED BY THE REVENUE EMANATE FROM THE RES PECTIVE ORDERS OF THE LD. CIT(A), BAREILLY DATED 3/11/2016. 2 . THE GRIEVANCE OF T HE REVENUE IN BOTH THE APPEALS ARE THAT THE LD. CIT(A) HAS ALLOWED DEDUCTION UNDER SECTION 80P OF THE ACT TO THE EXTENT OF DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOUNT O F ITA NO.108 & 109/LKW/2017 PAGE 2 OF 4 DISALLOWANCE OF CONTRIBUTION TO PF OF TEMPORARY EMPLOYEES OF THE SOCIETY AND SECONDLY IN ALLOWING DEDUCTION UNDER SECTION 80P OF THE ACT ON ACCOUNT OF DISALLOWANCE OF INTEREST FROM DEPOSITS IN S.B. ACCOUNTS AND FDRS. 3 . BOTH THESE CASES WERE HEARD TOGETHER AND THE FACTS BEING SIMILAR AND THE ISSUES COMMON, THEY ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER. 4 . FOR THE SAKE OF CONVENIENCE, WE TAKE ITA NO.108/LKO/2017 AS A LEAD CASE AND THE FACTS APPEARING THEREIN ARE THAT THE ASSESSEE IS A CO - OPERATIVE SOCI ETY REGISTERED UNDER THE U.P. SAHKARI SAMITI ADHINIYAM, 1965 BY THE REGISTRAR, GANNA SAHKARI SAMITYAN. THE MAIN OBJECT OF THE SOCIETY IS TO MARKET THE CANE PRODUCE OF MEMBERS OF THE SOCIETY AND ALSO TO PROVIDE CREDIT FACILITIES TO THE MEMBERS FOR PURCHASE OF EQUIPMENTS, SEEDS, FERTILIZERS ETC. THE ASSESSEE SOCIETY HA S FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2013 - 14 SHOWING NIL I NCOME BY CLAIMING DEDUCTION U/S 80P(2)(A) OF ACT. THEREAFTER, IN THE COURSE OF ASSESSMENT PROCEEDING, THE ASSESSING OFFICER DISALLOWED THE DEDUCTION TO THE EXTENT OF RS.49,29,581/ - ON ACCOUNT OF DISALLOWANCE OF CONTRIBUTION OF PF OF TEMPORARY EMPLOYEES AND THE ASSESSING OFFICER HAS ALSO DISALLOWED DEDUCTION TO THE EXTENT OF RS.51,74,047/ - BEING INTEREST FROM DEPOSITS I N SAVING BANK ACCOUNTS AND FDRS WITH PUBLIC SECTOR BANKS. 5 . AT THE TIME OF HEARING BEFORE THE LD. CIT(A), ASSESSEE HA D FILED COPY OF ITAT ORDER IN ITA NO.536/LKW/2015 FOR ASSESSMENT YEAR 2011 - 12 IN THE CASE OF I.T.O., WARD 3(4), LAKHIMPUR KHERI VS. CO - OPERATIVE CA NE DEVELOPMENT UNION, BHEERA, LAKHIMPUR KHERI . THE LD. CIT(A) HAS GIVEN RELIEF TO THE ASSESSEE ON BOTH GROUNDS BY RELYING ON ITAT ORDER IN ITA NO.536/LKW/2015. THE OBSERVATION OF THE LD. CIT(A) IS THAT ITA NO.108 & 109/LKW/2017 PAGE 3 OF 4 DEDUCTION UNDER SECTION 80P OF THE ACT IS ALLOWABLE TO THE EXTENT OF INCREASED INCOME AFTER MAKING ADDITION. THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80P TO THE EXTENT OF INCREASED INCOME EVEN AFTER MAKING ADDITION. DEDUCTION UNDER SECTION 80P IS ALLOWED TO THE EXTENT OF DISALLOWANCE MADE BY T HE ASSESSING OFFICER. 6 . WE HAVE PERUSED THE CASE RECORDS, ANALYSED THE FACTS AND CIRCUMSTANCES OF THE CASE. SO FAR AS THE CONTRIBUTION TO THE PF ACCOUNT OF SEASONAL EMPLOYEES IS CONCERNED, WE FIND THAT AS PER THE FACTS AND CIRCUMSTANCES AND THE DECISION O F THE CO - ORDINATE BENCH OF ITAT, EVEN IF THERE IS AN INCREASE IN ADDITION , STILL DEDUCTION UNDER SECTION 80P OF THE ACT IS APPLICABLE AND, THEREFORE, RELIEF GRANTED BY THE LD. CIT(A) ON THIS ISSUE IS UPHELD. 7 . WITH REGARD TO INTEREST FREE DEPOSITS IN SAVING BANK ACCOUNT AND FDRS, THERE IS A DECISION OF THE HON'BLE APEX COURT IN THE CASE OF TOTGARS CO - OPERATIVE SALE SOCIETY LTD. V S . INCOME - TAX OFFICER , 322 ITR 283 (SC) WHEREIN IT WAS HELD THAT INTEREST IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80P. THIS IS SUE IS, THEREFORE, RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER TO DECIDE ON THE FACTS OF THE PRESENT CASE TAKING INTO ACCOUNT THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF TOTGARS CO - OPERATIVE SALE SOCIETY LTD. V S . INCOME - TAX OFFICER (SUPRA ) AND DECIDE THE ISSUE AFRESH AFTER PROVIDING AN OPPORTUNITY OF HEARING TO THE ASSESSEE. 8 . SIMILARLY, IN ITA NO.109/LKW/2017 ALSO RELIEF GIVEN ON ACCOUNT OF CONTRIBUTION OF PF FOR SEASONAL EMPLOYEES IS SUSTAINED WHEREAS THE ISSUE OF ALLO W ABILITY OF DEDUCTION OF INTEREST ON DEPOSITS, IS RESTORED BACK TO THE FILE OF THE ASSESSING OFFICER TO BE DECIDED AS INDICATED HEREINABOVE IN OUR DECISION IN ITA NO.108/LKW/2017. ITA NO.108 & 109/LKW/2017 PAGE 4 OF 4 9 . ACCORDINGLY, IN BOTH THE YEARS THE RELIEF GIVEN BY THE LD. CIT(A) ON ACCOUNT OF CONTRIBUTION TO P F OF SEASON AL EMPLOYEES IS SU S TAINED WHEREAS THE RELIEF GRANTED BY THE LD. CIT(A) ON THE ISSUE OF INTEREST ON DEPOSITS IN SAVING BANK ACCOUNTS AND FDRS, THE ORDER OF THE LD. CIT(A) IS SET ASIDE AND THE MATTER IS RESTORED TO THE FILE OF THE ASSESSING OFFICE R. 10 . IN THE RESULT, BOTH THE APPEALS OF THE REVENUE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 13 / 0 3 / 201 8 . SD/ - SD/ - [ T.S. KAPOOR ] [PARTHA SARATHI CHAUDHURY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13 TH MARCH , 201 8 JJ: 0703 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR