M/s Bhuvaneshwari Souharda Sahakari Niyamitha , Gangavathi V. Income TAx Officer Ward-1, Koppala

ITA 1094/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5962 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 01-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 04-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABDUL HAKEEM M
• Assessee Lawyers: R E BALASUBRAMANYAM
• Keywords: Opportunity of being heard; Set aside
• Section: 80P

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-C BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 1094 / BANG/201 8 ASSESSMENT YEAR : 20 1 2 - 13 M/S. BHUVANESHWARI PATTINA SOUHARDA SAHAKARI NIYAMITHA, KOPPAL ROAD, GANGAVATHI 583 227, KOPPTAL DIST. PAN: AAAJB0697E VS. THE INCOME TAX OFFICER, WARD 1, KOPPALA. APPELLANT RESPONDENT APPELLANT BY : SHRI R.E. BALASUBRAMANYAM, CA RESPONDENT BY : SHRI ABDUL HAKEEM .M, JCIT (DR) DATE OF HEARING : 2 6 . 0 4 .2018 DATE OF PRONOUNCEMENT : 04 . 0 5 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE ORDER OF LD. CIT(A), GULBARGA, DATED 29.01.2018 FOR ASSESSMENT Y EAR 2012-13. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE IMPUGNED ORDER IS OPPOSED TO FACTS AND LAW I N SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE APPELLANT. 2. THE LD.CIT (A) ERRED IN DENYING THE DEDUCTION UN DER SECTION 80P (2) OF THE INCOME TAX ACT IN RESPECT OF INTERES T INCOME RECEIVED FROM VARIOUS BANKS AND IN DOING SO A) THE LD.CIT(A) FAILED TO APPRECIATE THAT THE INTERES T INCOME FROM OTHER BANKS ARE ATTRIBUTABLE TO PROFITS AND GA INS OF THE BUSINESS OF EXTENDING CREDIT FACILITIES TO APPELLAN T'S MEMBERS. B) THE LD. CIT(A) FAILED TO APPRECIATE THAT THE BUSINE SS OF THE APPELLANT CONSISTS ENTIRELY OF EXTENDING CREDIT FAC ILITIES ONLY TO ITS MEMBERS AND THE INTEREST INCOME FROM VARIOUS BA NKS AROSE ONLY ON ACCOUNT OF KEEPING THE SURPLUS FUNDS FOR TH E TIME BEING IN ANTICIPATION OF LENDING THE SAME TO THE MEMBERS AS THERE WERE NO READY BORROWERS FOR THE SAID AMOUNT. ITA NO.1094/BANG/2018 PAGE 2 OF 3 3. THE LD.CIT(A) FAILED TO APPRECIATE THE FACT THAT THE APPELLANT HAS ONLY ORDINARY MEMBERS AND NO NOMINAL MEMBERS AN D DURING THE NORMAL COURSE OF ITS BUSINESS HAS ONLY D EALT WITH ITS OWN MEMBERS AND NOT WITH ANY NOMINAL MEMBERS AS PER THE DECISION OF THE HONOURABLE SUPREME COURT IN THE CIT IZEN CO- OPERATIVE SOCIETY LIMITED. 4. WITHOUT PREJUDICE TO GROUND NO.2 AND AS AN ALTER NATE PLEA THE APPELLANT FURTHER SUBMITS THAT IN RESPECT OF THE IN COME EARNED FROM THE CO-OPERATIVE BANKS IT IS ENTITLED FOR DEDU CTION U/S 80P (2) (D) OF THE ACT INASMUCH AS THE CO-OPERATIVE BANKS ARE ALSO CO-OPERATIVE SOCIETIES AS PER SECTION 2(B1) OF KARNATAKA CO-OPERATIVE SOCIETIES ACT, 1959. 5.THE LD.CIT(A) ERRED IN NOT GIVING FULL BENEFIT IN RESPECT OF E- STAMPING COMMISSION, PIGMY ACCOUNT CLOSING CHARGES, PAY ORDER & DD COMMISSION, MISCELLANEOUS CHARGES, CHEQU E CLEARING COMMISSION AND OTHER INCOME INASMUCH AS TH ESE INCOMES WERE EARNED BY THE APPELLANT IN THE NORMAL COURSE OF LENDING TO ITS OWN MEMBERS AND ARE ATTRIBUTABLE TO THE SAID BUSINESS. 6. WITHOUT PREJUDICE TO ABOVE GROUNDS EVEN IF THE A PPELLANT IS HELD TO BE NOT ELIGIBLE FOR THE DEDUCTION UNDER SEC TION 80P(2) IT IS SUBMITTED THAT THE LD.AO OUGHT TO HAVE RESTRI CTED THE DISALLOWANCE UNDER SECTION 80P(2) AT THE MOST TO TH E NET PROFIT. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE ADDUCE D IN TIME TO TIME, IT IS REQUESTED THAT THE HON'BLE ITAT TO CANC EL THE ADDITION MADE BY THE ASSESSING OFFICER AND ALLOW DEDUCTION U NDER SECTION 80P (2) OF THE ACT. 3. THE LD. AR OF ASSESSEE SUBMITTED A COPY OF TRIBU NAL ORDER IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2014-15 AND POINTED OUT TH AT IN THAT YEAR, THE TRIBUNAL HAS RESTORED BACK THE MATTER TO THE FILE O F CIT(A) FOR FRESH DECISION AND IN THIS REGARD, MY ATTENTION WAS DRAWN TO PARA 4 OF THIS TRIBUNAL ORDER. HE SUBMITTED THAT ON SIMILAR LINE, IN THE PRESENT YEAR ALSO, THE ISSUE MAY BE RESTORED BACK TO THE FILE OF CIT(A) FOR FRESH DECIS ION WITH SIMILAR DIRECTIONS. THE LD. DR OF REVENUE SUPPORTED THE ORDER OF CIT(A). 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST OF ALL, I REPRODUCE PARA 4 OF TRIBUNAL ORDER IN ASSESSEES OWN CASE FOR ASSESSMEN T YEAR 2014-15. THE SAME IS AS UNDER. ITA NO.1094/BANG/2018 PAGE 3 OF 3 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND THAT AFTER DISCUSSING SO MANY JUDGMENTS, THE CIT(A) HAS ULTIMA TELY FOLLOWED THE LATER JUDGMENT OF HONBLE APEX COURT RENDERED IN TH E CASE OF THE CITIZEN CO-OPERATIVE SOCIETY LTD. VS. ACIT(SUPRA). BUT THERE IS NO DISCUSSION OR COMPARISON OF THE FACTS OF THE PRESEN T CASE AND FACTS OF THAT CASE AND THEREFORE, I FEEL IT PROPER IN THE IN TEREST OF JUSTICE TO RESTORE THE MATTER BACK TO THE FILE OF CIT(A) FOR F RESH DECISION AFTER DISCUSSING AND COMPARING THE FACTS OF THE PRESENT C ASE WITH THE FACTS OF THAT CASE. HENCE I SET ASIDE THE ORDER OF CIT ( A) AND RESTORE THE MATTER BACK TO HIS FILE FOR A FRESH DECISION IN THE LIGHT OF ABOVE DISCUSSION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. 5. SINCE THE LD. DR OF REVENUE COULD NOT POINT OUT ANY DIFFERENCE IN FACTS IN PRESENT YEAR, I FIND NO REASON TO TAKE A CONTRARY V IEW IN THE PRESENT YEAR AND HENCE, RESPECTFULLY FOLLOWING THE EARLIER TRIBUNAL ORDER, I SET ASIDE THE ORDER OF CIT(A) IN THE PRESENT YEAR ALSO AND RESTORE THE MAT TER BACK TO HIS FILE WITH SAME DIRECTIONS AS WERE GIVEN BY TRIBUNAL IN ASSESSMENT YEAR 2014-15 AS PER PARA 4 OF TRIBUNAL ORDER REPRODUCED ABOVE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 04 TH MAY, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.