The Shramjivi Vividhlakshidhiran & Grahak Sahakari Mandli Ltd., Anand V. The Income Tax Officer, Ward-5, Anand

ITA 1265/AHD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7857 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 1 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 24-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N DIVATIA

Judgement Text

, LH LHLH LH IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD LOZJH LOZJH LOZJH LOZJH OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN] YS[KK LNL; ,OA ] YS[KK LNL; ,OA ] YS[KK LNL; ,OA ] YS[KK LNL; ,OA EK/KQFERK JKW; EK/KQFERK JKW; EK/KQFERK JKW; EK/KQFERK JKW;] U;KF;D LNL; ] U;KF;D LNL; ] U;KF;D LNL; ] U;KF;D LNL; DS LE{KA DS LE{KA DS LE{KA DS LE{KA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SMT MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO.1265/AHD/2017 ( / ASSESSMENT YEAR : 2013-14) THE SHRAMJIVI VIVIDHLAKSHIDHIRAN & GRAHAK SAHAKARI MANDLI LTD., B/H C. P. COMMERCE COLLEGE, NR. BHAGAT SINGH, AT & POST : ANAND 388 001 / VS. ITO, WARD 5, INCOME TAX OFFICER ANAND. ./ ./ PAN/GIR NO. : AAAAT 2324 D ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI S. N. DIVATIA, A.R. / RESPONDENT BY : SHRI PRASOON KABRA, SR. D.R. / DATE OF HEARING 05/07/2018 !'# / DATE OF PRONOUNCEMENT 13/07/2018 $% / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE APPELLATE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-4, VADODARA [CIT(A) IN SHORT] VIDE APPEAL NO.CAB/4- 560/2015-16 DATED 28.02.2017 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S.143(3) OF THE INCOME TAX ACT, 1961 (HERE-IN -AFTER REFERRED TO AS 'THE ACT') DATED 24.02.2016 RELEVANT TO ASSESSMENT YEAR (AY) 2013-14. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS UNDER:- 1. THAT THE LEARNED CIT(A)-4, VADODARA HAS ERRED BOTH IN LAW AND ON THE FACTS THE CASE IN DISALLOWING COMMISSION EAR NED FROM ITA NO.1265/AHD/2017 THE SHRAMJIVI VIVIDHLAKSHI DHIRAN & GRAHAK SAHAKARI MANDLI LTD. VS. ITO ASST.YEAR 2013-14 - 2 - MGVCL OF RS.1,65,127/- HOLDING IT, AS NOT ALLOWABLE U/S. 80P(2)(A)(I) OF THE INCOME-TAX ACT 1961. 2. THAT THE LEARNED CIT(A)-4, VADODARA, HAS FURTHE R ERRED THAT INTEREST EARNED ON DEPOSITS WITH NATIONALISED BANKS OF RS.29,55,324/- AND INTEREST INCOME OF RS.57,100/- R ECEIVED FROM MGVCL IS NOT ALLOWABLE BY WAY OF DEDUCTION U/S 80P( 2)(A)(I) OF THE INCOME-TAX ACT 1961. 3. CONSIDERING THE PECULIAR FACTS AND CIRCUMST ANCES OF THE CASE OF THE APPELLANT THE DEDUCTION OF RS.1,65,127/-, RS 29,55,324/- AND INTEREST INCOME OF RS.57,100/- FROM MGVCL CLAIM ED BY WAY OF DEDUCTION BE ALLOWED U/S. 80P OF THE INCOME-TAX ACT 1961. 4. YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER OR TO AMEND ANY OF THE GROUND/S TILL THE APPEAL IS FINALLY HEARD AND DECID ED. 3. THE INTERCONNECTED ISSUE INVOLVED IN THE GROUNDS OF APPEAL RELATES TO WHETHER INTEREST INCOME EARNED ON FIXED DEPOSITS WITH THE NATIONALIZED BANK, MGVCL AND COMMISSION INCOME FROM MGVCL WOULD QUALIFY FOR DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE INCOME TAX ACT. 4. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSE SSEE FAIRLY CONCEDED THAT ISSUE IN DISPUTE IS SQUARELY COVERED AGAINST T HE ASSESSEE BY THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF STATE BANK OF INDIA VS. CIT, 389 ITR 578 WHEREIN HON'BLE COURT HELD THAT INTEREST EARNED FROM THE INVESTMENT MADE IN ANY BAN K IS NOT DEDUCTIBLE UNDER SECTION 80P(2)(A)(I) OF THE ACT. IN THIS VIEW OF THE MATTER, WE DISMISS THE APPEAL OF THE ASSESSEE. HOWEVER, THE LEARNED AR FOR THE ASSESSEE SUBMITTED THAT NET AMOUNT OF INTEREST INCOME AND COMMISSION INCOME SHOULD BE CON SIDERED FOR ITA NO.1265/AHD/2017 THE SHRAMJIVI VIVIDHLAKSHI DHIRAN & GRAHAK SAHAKARI MANDLI LTD. VS. ITO ASST.YEAR 2013-14 - 3 - DISALLOWING THE DEDUCTION U/S 80P(2)(A)(I) OF THE A CT. THE LEARNED AR FOR THE ASSESSEE IN SUPPORT OF HIS CONTENTION RELIED ON THE ORDER OF THIS TRIBUNAL IN THE CASE OF SHREEJI CO-OPERATIVE CREDI T SOCIETY LTD VS. ITO PERTAINING TO THE ASSESSMENT YEAR 2013-14 IN ITA NO .2751/AHD/2016 VIDE ORDER DATED 15-02-2018. ON THE OTHER HAND, LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AT THE OUTSET, WE FIND THAT TH E IDENTICAL ISSUE HAS BEEN DECIDED BY THIS HONBLE TRIBUNAL IN THE CASE O F SHREEJI CO-OPERATIVE CREDIT SOCIETY LTD. (SUPRA) WHEREIN, IT WAS HELD AS UNDER: 3. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE FAIRY CONCEDED THAT ISSUE IN DISPUTE IS SQUARELY COVERED AGAINST THE AS SESSEE BY DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F STATE BANK OF INDIA VS. CIT, 389 ITR 578 WHEREIN HONBLE COURT HELD THA T INTEREST EARNED FROM INVESTMENT MADE IN ANY BANK IS NOT DEDUCTIBLE UNDER SECTION 80P(2)(D). IN THIS VIEW OF THE MATTER, WE DISMISS T HE APPEAL OF THE ASSESSEE. HOWEVER, ANY EXPENDITURE INCURRED BY THE ASSESSEE FOR EARNING SUCH INCOME COULD BE ALLOWED TO IT. IN OTHE R WORDS, THE LD. AO HAS TO DETERMINE THE NET INTEREST EARNED BY THE ASS ESSEE ON SUCH INVESTMENT WITH BANK, AND ONLY THEREAFTER THAT INCO ME HAS TO BE EXCLUDED FROM THE ADMISSIBILITY OF DEDUCTION UNDER SECTION 80P(2) OF THE ACT. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. THE FACTS OF THE CASE ON HAND ARE IDENTICAL AS DISC USSED IN THE ABOVE CASE. THEREFORE, RESPECTFULLY FOLLOWING THE SAME, WE DIRE CT THE AO TO EXCLUDE THE AMOUNT OF NET INTEREST INCOME AND COMMISSION IN COME FROM THE DEDUCTION CLAIMED U/S 80P(2)(A)(I) OF THE ACT. THUS THE AO WILL ALLOW THE ITA NO.1265/AHD/2017 THE SHRAMJIVI VIVIDHLAKSHI DHIRAN & GRAHAK SAHAKARI MANDLI LTD. VS. ITO ASST.YEAR 2013-14 - 4 - EXPENSES INCURRED BY THE ASSESSEE IN THE EARNING OF SUCH INTEREST INCOME AND COMMISSION INCOME NOT ELIGIBLE FOR DEDUCTION UN DER SECTION 80P(2)(A)(I) OF THE ACT. HENCE, GROUNDS OF APPEAL F ILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON 13/07/2018 SD/- SD/- E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LN L; L; L; L; (MADHUMITA ROY) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 13/07/2018 PRITI YADAV, SR.PS !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & '( ) / CONCERNED CIT 4. ) () / THE CIT(A)-4, VADODARA. 5. ,-. //'( , '(# , 12$&$ / DR, ITAT, AHMEDABAD 6. .34 5 / GUARD FILE. % & / BY ORDER, , / //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD