Income Tax officer Ward-2(1), Hubballi V. M/s Agricultural College Employees Co-operative Crredit Society Ltd , Dharwad

ITA 1332/BANG/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7069 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 12-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P V PRADEEP KUMAR ACIT
• Assessee Lawyers: RAJEEV R KULKARNI
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH C BEFORE SHRI JASON P BOAZ , ACCOUNTANT MEMBER AND SHRI LALIT KUMAR, JUDICIAL MEMBER I.T . A. NO. 1332 /BANG/20 17 (ASSESSMENT YEAR : 20 14 - 15 ) INCOME TAX OFFICER, WARD 2(1), HUBBALLI . . APPELLANT. VS. M/S. AGRICULTUR A L COLLEGE EMPLOYEES CO - OPERATIVE CREDIT SOCIETY LTD., UAS COMPOUND, DHARWAD . .. RESPONDENT. A PPELLANT BY : DR. P.V. PRADEEP KUMAR, ACIT (D.R) R E SPONDENT BY : SHRI RAJEEV R KULKARNI, CA DATE OF H EARING : 13.12.2017. DATE OF P RONOUNCEMENT : 14 .12 .201 7 . O R D E R PER SHRI JASON P BOAZ, A .M . : THIS APPEAL BY REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), HUBLI DT. 27.03.2017 FOR THE ASSESSMENT YEAR 20 14 - 15. 2. BRIEFLY STATED, THE FACTS RELEVANT FOR DISPOSAL OF TH IS APPEAL ARE AS UNDER : - 2 IT A NO. 1332 /BANG/201 7 2.1 THE ASSESSEE IS A CO - OPERATIVE CREDIT SOCIETY ENGAGED IN PROVIDING CREDIT FACILITIES TO I TS MEMBERS, FILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2014 - 15 ON 19.9.2014 DECLARING NI L INCOME AFTER CLAIMING DEDUCTION OF RS.32,78,608 UNDER SECTION 80P(2)(A)(I) OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT') . THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS CONCLUDED UNDER SECTION 143(3) OF THE ACT VIDE ORDER DT.21.6.2016; WHE REIN THE ASSESSEE'S INCOME WAS DETERMINED AT RS.32,78,608 IN VIEW OF THE ASSESSING OFFICER DENYING THE ASSESSEE'S CLAIM FOR DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT. WHILE DOING SO , THE ASSESSING OFFICER OBSERVED THAT THOUGH THE ISSUE OF DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT, AS IN THE CASE ON HAND, WAS HELD IN FAVOUR OF THE ASSESSEE AND AGAINST REVENUE BY THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. BILURU GURUBASAVA SAHAKARI PATTINA SANGHA NIYAMITHA IN ITA NO .5006/2013 DT.5.2.2014, HE WAS MAKING THE SAID DISALLOWANCE OF THE ASSESSEE'S CLAIM FOR DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT, SINCE THE DEPARTMENT HAS FILED APPEAL BEFORE THE HON'BLE APEX COURT ON THIS ISSUE WHICH IS PENDING DISPOSAL. 2.2 AGGRIEVED BY THE ORDER OF ASSESSMENT DT.21.6.2016 FOR ASSESSMENT YEAR 2014 - 15, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (APPEALS), HUBLI. THE LEARNED CIT (APPEALS) VIDE THE IMPUGNED ORDER DT.27.3.2017 ALLOWED THE ASSESSEE'S CLAIM FOR DEDUCTION F OR DEDUCTION CLAIMED UNDER SECTION 80P(2)(A)(I) OF THE ACT AND CONSEQUENTLY THE ASSESSEE'S APPEAL, FOLLOWING THE DECISIONS OF THE HON'BLE KARNATAKA HIGH 3 IT A NO. 1332 /BANG/201 7 COURT IN SRI BILURU GURUBASAVA SAHAKARI PATTINA SANGHA NIYAMITHA (SUPRA), THE DECISION OF THE HON'BLE KARNATAKA HIGH COURT IN SHRI CHANDRAPRABHU URBAN CO - OPERATIVE CREDIT SOCIETY LTD. IN ITA NO.100043 & 100045 OF 204 DT.21.9.2015 AND OF THE CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF CIT VS. YESHWANTHPUR CREDIT CO - OPERATIVE SOCIETY LTD. (ITA NO.737/B ANG/2011). 3.1 THE REVENUE, BEING AGGRIEVED BY THE ORDER OF THE CIT (APPEALS), HAS FILED THIS APPEAL BEFORE THE TRIBUNAL WHEREIN IT HAS RAISED THE FOLLOWING GROUNDS : - WHETHER, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEA RNED CIT (APPEALS), HUBBALLI WAS JUSTIFIED IN LAW IN HOLDING THAT THE ASSESSEE - SOCIETY IS ENTITLED TO DEDUCTION U/S. 80P(2)(A)(I) OF THE INCOME TAX ACT EVEN WHEN THE ASSESSEE - SOCIETY IS MAINLY INVOLVED IN EXTENDING CREDIT FACILITIES TO ITS MEMBERS WHICH IS IN THE NATURE OF A BANK TRANSACTION, TREATED ON PAR WITH THE NEW CLAUSE INTRODUCED IN THE DEFINITION OF INCOME IN SECTION 2(24)(VIIA) OF THE ACT AND COMES UNDER THE PURVIEW OF SECTION 80P(4) W.E.F. 1.4.2007. 3.2 THE LEARNED DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE ASSESSING OFFICER. 3.3 PER CONTRA, THE LEARNED AUTHORISED REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE IMPUGNED ORDER OF THE LEARNED CIT (APPEALS) IS TO BE UPHELD AS HE RIGHTLY FOLLOWED THE BINDING DECISION OF THE HON' BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. BILURU GURUBASAVA SAHAKARI PATTINA SANGHA NIYAMITHA IN ITA NO.5006/2013 DT.5.2.2014 WHILE ALLOWING THE ASSESSEE'S CLAIM FOR DEDUCTION U/S. 80P(2)(A)(I) OF THE ACT. 4 IT A NO. 1332 /BANG/201 7 3.4.1 WE HAVE HEARD THE RIVAL CONTENT IONS, PERUSED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD; INCLUDING THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS THE DECISIONS OF THE HON'BLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. BILURU GURUBASAVA SAHAKARI PATTINA SANGHA NIYAMITHA (SUPRA). IN VIEW OF THE FACT THAT THE LEARNED CIT (APPEALS) HAS DECIDED THE ISSUE OF ASSESSEE'S CLAIM FOR DEDUCTION U/S. 80P(2)(A)(I) OF THE ACT IN FAVOUR OF THE ASSESSEE FOLLOWING THE ABOVE MENTIONED JUDGMENT OF THE HON'BLE KARNATAKA HIGH COURT (SUPRA), WE FIND NO INFIRMITY IN HIS ORDER. 3.4.2 IN THE CASE OF SHRI BILURU GURUBASAVA PATTINA SAHAKARI SANGHA NIYAMITHA (SUPRA), THE HON'BLE KARNATAKA HIGH COURT WHILE INTERPRETING THE PROVISIONS OF SECTION 80P(4) OF THE ACT HAS HELD AS UNDER : 5 IT A NO. 1332 /BANG/201 7 3.4.2 T HE HON'BLE KARNATAKA HIGH COURT FOLLOWED ITS OWN DECISION IN THE AFOREMENTIONED CASE OF SHRI BILURU GURUBASAVA PATTINA SAHAKARI SANGHA NIYAMITHA (SUPRA), ON THE SAME ISSUE IN ITS SUBSEQUENT DECISIONS IN THE CASE OF BHAVASAR KSH A TRIYA CO - OP. CREDIT SOCIETY LTD., IN ITA NO.100206/2015 DT.6.1.2016 AND YESHWANTPUR CREDIT CO - OPERATIVE SOCIETY LTD. IN ITA NO.237/2012 DT.27.6.2014. RESPECTFULLY FOLLOWING THE AFORESAID DECISIONS OF THE HON'BLE KARNATAKA HIGH COURT (SUPRA), WE 6 IT A NO. 1332 /BANG/201 7 UPHOLD THE ORDER OF THE LEARNED CIT ( APPEALS) IN DIRECTING THE ASSESSING OFFICER TO ALLOW THE ASSESSEE DEDUCTION CLAIMED U/S. 80P(2)(A)(I) OF THE ACT. CONSEQUENTLY, THE GROUNDS RAISED BY REVENUE ARE DISMISSED. 4. IN THE RESULT, REVENUE S APPEAL FOR ASSESSMENT YEAR 2014 - 15 IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 14TH DAY OF DEC., 201 7 . SD/ - ( LALIT KUMAR ) JUDICIAL MEMBER SD/ - ( JASON P BOAZ ) ACCOUNTAN T MEMBER BANGALORE, DT. 14 .12.2017. *REDDY GP COPY TO : 1 APPELLANT 4 CIT(A) 2 RESPONDENT 5 DR. ITAT, BANGALORE 3 CIT 6 GUARD FILE SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL BANGALORE.