M/s Primary Co.operativate Agri.rural Development Bank Ltd, Bangalore V. Income Tax Officer, Ward-4(4), Bangalore

ITA 1319/BANG/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 89866 (ITAT-BANGALORE)
• Duration Of Justice: 5 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 27-10-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR P K SRIHARI
• Section: 143(3); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRI BUNAL BANGALORE BENCH B, BANGALORE BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI VIJAY PAL RAO, JUDICIAL MEMBER ITA NO.1319(B)/2014 (ASSESSMENT YEAR : 2010-11) M/S PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK LTD, NO.64/10, KANAKAPURA MAIN ROAD, BANASHANKARI BANGALORE-560 078 APPELLANT PAN NO.AAAAP1547L VS THE INCOME-TAX OFFICER WARD-4(4), BANGALORE RESPONDENT ASSESSEE BY : SHRI NARENDRA SHARMA, ADVOCATE REVENUE BY : DR. P.K.SRIHARI, ADDL.CIT DATE OF HEARING : 08-04-2015 DATE OF PRONOUNCEMENT : 17-04-2015 O R D E R PER SHRI VIJAY PAL RAO, JM: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 21-07- 2014 OF THE CIT(A), BANGALORE FOR ASSESSMENT YEAR: 2010-11. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS; 1. THE ORDER OF THE AUTHORITIES BELOW IN SO FAR A S THEY ARE AGAINST THE ASSESSEE ARE OPPOSED TO LAW, EQUIT Y, WEIGHT OF EVIDENCE, FACTS AND CIRCUMSTANCES OF THE ASSESSE ES CASE. ITA NO.1319(BANG)2014 2 2. THE AUTHORITIES BELOW ARE NOT JUSTIFIED IN HOLD ING THAT THE ASSESSEE DOES NOT COME WITHIN THE PURVIEW OF TH E DEDUCTION ENVISAGED IN SECTION 80P(2)(A)(I) OF THE ACT, UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE ASSESSEE S CASE. 3. WITHOUT PREJUDICE TO THE ABOVE, THE AUTHORITIES BLOW ARE NOT JUSTIFIED IN SUSTAINING THE ADDITION OF RS. 14,50,000/- UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE ASS ESSEES CASE. 4. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER W ITH THE HONBLE CCIT/DG THE ASSESSEE DENIES ITSELF LIABLE TO BE CHARGED TO INTEREST U/S 234A & 234B OF THE ACT, WHI CH UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE ASS ESSEES CASE AND THE LEVY DESERVES TO BE CANCELLED. 2. THE ASSESSEE IS A BANK REGISTERED AS A COP-OPE RATIVE SOCIETY UNDER THE KARNATAKA CO-OPERATIVE SOCIETIES ACT. I N ITS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT YEAR, ASSESSEE DECLARED NIL INCOME AFTER CLAIMING DEDUCTION U/S 80P(2)(A)(I) OF THE IT ACT, 1961. IN THE ASSESSMENT COMPLETED U/S 143(3) OF THE ACT VIDE ORDER DATED 25-03-2013 T HE AO HAS DISALLOWED DEDUCTION U/S 80P(2)(A)(I) IN RESPECT OF RENTAL INC OME OF RS.50 LAKHS FROM LETTING OUT THE PROPERTY OWNED BY ASSESSEE AND CONS EQUENTLY, MADE ADDITION OF RS.14,50,000/-TO THE TOTAL INCOME OF TH E ASSESSEE. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE CIT(A) AND CONTENDED THAT THE RENTAL INCOME EARNED BY THE ASSESSEE IS EL IGIBLE FOR DEDUCTION U/S 80P(2)(A)(I) OF THE ACT, HOWEVER, THE CIT(A) HAS NO T ACCEPTED THE CONTENTION ITA NO.1319(BANG)2014 3 OF THE ASSESSEE AND CONFIRMED THE ACTION OF THE AO BY RELYING UPON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE O F M/S TOTGARS CO- OPERATIVE SALES SOCIETY LTD VS ITO 322 ITR 283 (S C). 3. BEFORE US LEARNED AR HAS REITERATED THE CONTENT ION AS RAISED BEFORE THE AUTHORITIES BELOW AND SUBMITTED THAT RENTAL INC OME RECEIVED BY THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80P(2)(A)(I) OF THE ACT. IN SUPPORT OF HIS CONTENTION HE HAS RELIED UPON THE JUDGMENT OF H ONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF GUDATHUR THIMMAPPA & SONS VS CIT, MYSORE 70 ITR 70. ALTERNATIVELY, LEARNED AR PLEADED THAT IN A NY CASE, THE RENTAL INCOME HAS TO BE ASSESSED AS INCOME FROM HOUSE PROP ERTY AND ELIGIBLE DEDUCTION SHOULD BE ALLOWED U/S 24 OF THE IT ACT. 4. ON THE OTHER HAND, LEARNED DR HAS RELIED ON THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THE ISSUE IS C OVERED AGAINST THE ASSESSEE BY THE DECISION OF THE HONBLE SUPREME COU RT IN THE CASE OF M/S TOTGARS CO-OPERATIVE SALE SOCIETY LTD VS ITO (ITA NO.1622 OF 2010 DATED 08-02-2010) RELIED UPON BY THE LEARNED CIT(A). 5. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS MATERIAL AVAILABLE ON RECORD, WE NOTE THAT THE ISSUE IS NOW SETTLED BY THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF M/S T OTGARS CO-OPERATIVE SALE SOCIETY VS ITO(SUPRA) AND THEREFORE, WE DO NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDERS OF THE AUTHORITIES BELOW I N DENYING THE DEDUCTION U/S ITA NO.1319(BANG)2014 4 80P(2)(A)(I) OF THE ACT, IN RESPECT OF THE RENTAL I NCOME RECEIVED BY THE ASSESSEE. HOWEVER, WE FIND SUBSTANCE AND MERITS IN THE ALTERNATIVE PLEA TAKEN BY THE ASSESSEE THAT THE RENTAL INCOME SHOULD HAVE BEEN ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND EL IGIBLE DEDUCTIONS U/S 24 OF THE IT ACT ARE TO BE ALLOWED. ACCORDINGLY, WE DIRECT THE AO TO ASSESS THE RENTAL INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND ELIGIBLE DEDUCTION BE ALLOWED. 6. THE NEXT GROUND RAISED BY THE ASSESSEE WITH REG ARD TO LEVY OF INTEREST U/S 234A & 234B OF THE IT ACT, 1961. SINC E THE LEVY OF INTEREST U/S 234A & 234B OF THE IT ACT ARE CONSEQUENTIAL AND MANDATORY IN NATURE THEREFORE, NO SPECIFIC ADJUDICATION IS REQUIRED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON CONCLUSION OF THE HEARING ON 17 TH APRIL, 2015. SD/- SD/ - (PRAMOD KUMAR) (VIJAY PAL R AO) ACCOUNTANT MEMBER JUDICIAL MEMBER D A T E D : 17-04-2015 PLACE: BANGALORE AM* ITA NO.1319(BANG)2014 5 COPY TO : 1 APPELLANT 2 RESPONDENT 3 CIT(A)-II BANGALORE 4 CIT 5 DR, ITAT, BANGALORE. 6 GUARD FILE BY ORDER AR, ITAT, BANGALORE