Income-tax Officer, V. Dhanlaxmi Gramin Bigersheti Sah. Pat. Maryadit, Nashik

ITA 1415/PUN/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7731 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 25-06-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 30-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA
• Keywords: Business income

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . , , BEFORE SHRI D.KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1415/PUN/2016 / ASSESSMENT YEAR : 2012-13 ITO, WARD-1(5), NASHIK . /APPELLANT VS. DHANLAXMI GRAMIN BIGERSHETI SAHAKARI PATSANSTHA MARYADIT, SAHAKARI BHAVAN, NAYAGAON, TAL. SINNAR, DIST. NASHIK 422103 PAN : AAAAD1314P . / RESPONDENT ASSESSEE BY : SHRI ABHAY AVCHAT REVENUE BY : SHRI MUKESH JHA / DATE OF HEARING : 25.06.2018 / DATE OF PRONOUNCEMENT: 27.06.2018 / ORDER PER D. KARUNAKARA RAO, AM : THIS IS THE APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A)-1, NASHIK, DATED 01-04-2016 FOR THE ASSESSMENT YEAR 2012-13. 2. GROUNDS RAISED BY THE REVENUE ARE AS UNDER : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT(A)-1, NASHIK HAS ERRED IN DELETING THE ADDIT ION OF RS.65,46,167/-. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LD.CIT(A)-1, NASHIK HAD DELETED THE ADDITION MADE B Y THE ASSESSING OFFICER WITHOUT APPRECIATING THE FACT THAT THE ASSESSEE IS A CREDIT CO-OPERATIVE SOCIETY HAVING MAIN AND SOLE AIM TO PROVIDE CREDIT FACILITY TO ITS MEMBERS WHICH IS NOT COVERED UNDER BANKING ACTIVITIES/BANKING REGULATION ACT, 1949. 3. THE APPELLANT PRAYS TO ADDUCE SUCH FURTHER EVIDE NCE TO SUBSTANTIATE HIS CASE. ITA NO.1415/PUN/2016 DHANLAXMI GRAMIN BIGERSHETI SAHAKARI PATSANSTHA MAR YADIT 2 4. THE APPELLANT PRAYS LEAVE TO ADD, ALTER, CLARIFY , AMEND AND OR WITHDRAW ANY GROUNDS OF APPEAL AS AND WHEN THE OCCASION DEMA NDS. 3. BRIEFLY STATED RELEVANT FACTS INCLUDE THAT THE ASSESSE E IS A CO-OPERATIVE CREDIT SOCIETY ENGAGED IN THE BUSINESS OF BANKING. ASSESS EE SOCIETY ACCEPTS DEPOSITS FROM MEMBERS AND LENDS THE SAME. IN THE PROCE SS, IT EARNS INTEREST INCOME FROM MEMBERS. ASSESSEE EARNS INCOME ON INVESTME NT TOO. ASSESSEE FILED RETURN OF INCOME ON 17-08-2012 DECLARING TOTAL INCOME AT NIL INCOME. ASSESSEES CASE WAS SELECTED FOR SCRUTINY UNDER CASS. ASSESSEE DISCLOSED THE GROSS RECEIPTS AT RS.7,52,04,191/- WHICH INCLUDES INTERE ST ON LOAN GIVEN TO MEMBERS, INTEREST ON INVESTMENT MADE WITH BANKS, MUT UAL FUND DIVIDEND, ETC. ASSESSEE, AFTER CLAIMING VARIOUS EXPENSES AT RS.6,96,22,628/-, DETERMINED THE NET PROFIT AT RS.55,81,562/-. ASSESSEE WAS ASKED TO PROVIDE THE DETAILS OF INTEREST EARNED ON T HE FIXED DEPOSITS KEPT WITH VARIOUS BANKS AND ASSESSEE COMPLIED WITH THE SAME. CONTENTS OF PARA NO.7 OF THE ASSESSMENT ORDER ARE RELEVANT. AT THE END OF THE ASSESSMENT PROCEEDINGS U/S.143(3) OF THE ACT, AO DISALLOWED AN AMOUNT OF RS.65,46,167/- TOWARDS INTEREST EARNED FROM NATIONALIZED BANKS TRE ATING THE SAME AS INCOME FROM OTHER SOURCES AND HELD NOT ELIGIBLE FOR DEDUCTION U/S.80P OF THE ACT. 4. AGGRIEVED WITH THE ORDER OF AO, THE ASSESSEE FILED AN A PPEAL BEFORE CIT(A). ASSESSEE FILED ELABORATE SUBMISSIONS IN SUPPORT OF IT S CLAIM. THE CIT(A) DISTINGUISHED THE CASE LAW RELIED ON BY THE AO IN T HE CASE OF TOTAGHARS COOP. SALE SOCIETY LTD. VS. ITO 229 CTR 209. FURTHER, THE CIT(A) RELYING ON THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. NIPHAD NAGARI SAHAKARI PATSANSTHA LTD. IN ITA NO.1336/PN/ 2011, DATED 31-07-2013, HELD THAT THE INTEREST EARNED BY THE ASSES SEE IS IN THE COURSE OF ITS BUSINESS AND THE SAME IS ELIGIBLE FOR DEDUCTION U/S.80P(2)(A)(I) OF THE ACT. ITA NO.1415/PUN/2016 DHANLAXMI GRAMIN BIGERSHETI SAHAKARI PATSANSTHA MAR YADIT 3 5. AGGRIEVED WITH THE ORDER OF CIT(A) DELETING THE ADDITION OF RS.65,46,167/-, THE REVENUE IS IN APPEAL BEFORE US RAISING TH E AFORESAID GROUNDS. 6. LD. DR FOR THE REVENUE RELIED HEAVILY ON THE ORDER OF AO. LD. DR SUBMITTED THAT THE ASSESSEE IS CREDIT COOPERATIVE SOCIET Y AND IS NOT COVERED UNDER BANKING REGULATION ACT, 1949. THEREFORE, THE CIT(A) H AS NOT PROPERLY APPRECIATED THE FACTS. LD. DR PRAYED FOR REVERSING THE ORDER OF CIT(A). 7. PER CONTRA, AT THE OUTSET, LD. COUNSEL FOR THE ASSES SEE SUBMITTED THAT THE ISSUE RAISED BY THE REVENUE NOW STANDS DECIDED AGA INST THE REVENUE BY VIRTUE OF DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE ASS ESSEES OWN CASE FOR THE A.Y. 2009-10. HE ALSO SUBMITTED THAT THE PUNE BENCH OF THE TR IBUNAL HAS BEEN CONSISTENTLY TAKING THE DECISION IN FAVOUR OF THE ASSESSEE ON THIS PARTICULAR ISSUE. 8. WE HEARD BOTH THE SIDES. THE ISSUE RAISED IN THE PRE SENT APPEAL IS AGAINST THE CLAIM OF DEDUCTION U/S. 80P(2)(A)(I) OF THE ACT ON TH E INTEREST INCOME EARNED FROM NATIONALIZED BANKS. IT IS UNDISPUTED FACT THAT THE ASSESSEE IS A CREDIT CO-OPERATIVE SOCIETY AND RECEIVED ADVANCES AND LOANS FROM ITS MEMBERS, ON WHICH INTEREST WAS BEING RECEIVED AND PAID. WE FIND THE PUNE BENCH OF THE TRIBUNAL, ON THE SIMILAR ISSUE, IN ASS ESSEES OWN CASE VIDE ITA NO.949/PN/2013, DATED 23-07-2014 FOR THE A.Y. 2 009-10 HELD THE ISSUE IN FAVOUR OF THE ASSESSEE BY DISMISSING THE APPEAL FILE D BY THE REVENUE. THE FINDING OF THE TRIBUNAL READS AS UNDER : 4. AT THE TIME OF HEARING, IT WAS A COMMON POINT B ETWEEN THE PARTIES THAT A SIMILAR CONTROVERSY HAS BEEN CONSIDERED BY THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. NIPHAD NAGARI SAHAKARI PATSANST HA LTD. VIDE ITA NO.1336/PN/2011 DATED 31.07.2013. ITA NO.1415/PUN/2016 DHANLAXMI GRAMIN BIGERSHETI SAHAKARI PATSANSTHA MAR YADIT 4 5. THE RELEVANT PORTION OF DECISION OF OUR CO-ORDIN ATE BENCH IN THE CASE OF NIPHAD NAGARI SAHAKARI PATSANSTHA LTD. (SUPRA) WHIC H HAS DEALT WITH A SIMILAR ISSUE, READS AS UNDER : 11.3 IN THE INSTANT CASE THERE IS NO DISPUTE TO THE FACT THAT THE SOCIETY IS A CREDIT COOPERATIVE SOCIETY AUTHORISED BY THE REGI STRAR OF COOPERATIVE SOCIETIES FOR ACCEPTING DEPOSITS AND LENDING MONEY TO ITS MEMBERS AS PER LICENSE GRANTED BY THE REGISTRAR OF COOPERATIVE SOCIETIES AND THE MAIN OBJECT OF THE SOCIETY IS TO PROVIDE CREDIT FAC ILITY TO MEMBERS WHO CAN BE ANY PERSON OF THE SOCIETY. WE FIND THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF MAHAVIR NAGARI SAHAKARI PAT SANSTHA LTD. REPORTED IN 74 TTJ 793 (PUNE) HAS HELD THAT THE CRE DIT SOCIETY WHICH IS CARRYING ON THE BUSINESS OF BANKING ACTIVITY AND PR OVIDING CREDIT FACILITY TO ITS MEMBERS IS ELIGIBLE FOR DEDUCTION U/S.80P(2) (A)(I). IN VIEW OF THE ABOVE DISCUSSION AND FOLLOWING THE DECISIONS OF THE AHMEDABAD BENCH OF THE TRIBUNAL AND COCHIN BENCH OF THE TRIBUNAL WH ICH IN TURN HAVE CONSIDERED THE DECISION OF THE HON'BLE SUPREME COUR T IN THE CASE OF TOTAGAR'S COOPERATIVE SALE SOCIETY LTD. (SUPRA) WE FIND NO INFIRMITY IN THE ORDER OF THE LD.CIT(A).ACCORDINGLY, THE SAME IS UPHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 6. IN THE ABSENCE OF ANY DECISION TO THE CONTRARY A ND TO MAINTAINING CONSISTENCY, WE HEREBY AFFIRM THE ORDER OF THE CIT( A) WHICH IS IN CONFORMITY WITH THE DECISION OF THE TRIBUNAL IN THE CASE OF NI PHAD NAGARI SAHAKARI PATSANSTHA LTD.(SUPRA). THUS, ON THIS ASPECT, REVE NUE FAILS. CONSIDERING THE PRECEDENT ON THE SAME ISSUE BY THE CO- ORDINATE BENCH OF THE TRIBUNAL, WE ARE OF THE OPINION THAT THE ASSESSEE IS E NTITLED TO DEDUCTION U/S.80P(2)(A)(I) IN RESPECT OF THE INTEREST INCOME EARNED ON FIX ED DEPOSITS KEPT WITH THE NATIONALIZED BANKS/SCHEDULED BANKS AND THE SAME CONSTITUTE AS BUSINESS INCOME OF THE ASSESSEE. ACCORDINGLY, THE GR OUNDS RAISED BY THE REVENUE ARE DISMISSED AND IN FAVOUR OF THE ASSESSEE. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 27 TH DAY OF JUNE, 2018. SD/- SD/- (VIKAS AWASTHY) (D. KARUNAKARA RAO) /JUDICIAL MEMBER / ACCOUNTANT MEMBER PUNE; DATED : 27 TH JUNE, 2018 ITA NO.1415/PUN/2016 DHANLAXMI GRAMIN BIGERSHETI SAHAKARI PATSANSTHA MAR YADIT 5 / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// SENIOR PRIVA TE SECRETARY , / ITAT, PUNE 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A)-1, NASHIK 4. THE PR.CIT-1, NASHIK 5. , , B BENCH PUNE; 6. / GUARD FILE.