Kaival Credit Co. Op. Society Ltd., Anand V. The Income Tax Officer, Ward-2, Anand

ITA 144/AHD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7936 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 17-01-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR ANUPAMA SINGIA SR D R
• Section: 143(3)

Judgement Text

, SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO. 144/AHD/2017 ( ASSESSMENT YEAR : 2013-14) KAIVAL CREDIT CO.OP. SOCIETY LTD., IN BAZAR, AT. SARSA, ANAND - 388365 / VS. INCOME TAX OFFICER, WARD-2, ANAND ././ PAN/GIR NO. : AABAK1957A ( APPELLANT ) .. ( !' / RESPONDENT ) # / APPELLANT BY : ARTI N. SHAH, A.R. !' $# / RESPONDENT BY : DR. ANUPAMA SINGIA, SR.D.R. % &'($) DATE OF HEARING 29/06/2018 *+, $) / DATE OF PRONOUNCEMENT 03/07/2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE CIT(A)-4, VADODAR A (CIT(A) IN SHORT), DATED 30.09.2016 ARISING IN THE ASSESSMENT ORDER DATED 29.10.2015 PASSED BY THE ASSESSING OFFICER (AO) UND ER S. 143(3) OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING AY 20 13-14. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE REA DS AS UNDER: 1. THE LEARNED COMMISSIONER OF INCOME TAX, (APPEAL S)-4, VADODARA HAS ERRED IN LAW AND ON FACTS OF THE CASE IN NOT ALLOWING ITA NO. 144/AHD/17 [KAIVAL CREDIT CO.OP. SOCIETY LTD. VS. ITO] A.Y. 2013-14 - 2 - INTEREST OF RS.3,00,250/- RECEIVED FROM NATIONALIZE D BANK U/S.80P(2)(A)(I) OF THE I.T.ACT, 1961. 2. WITHOUT PREJUDICE TO ABOVE, WHILE DISALLOWING IN TEREST OF RS.3,00,250/-, THE C.I.T.(APPEALS) HAS NOT DEDUCTED THEREFROM INTEREST PAID TO DEPOSITORS IN RESPECT OF THE SAME , AND ACCORDINGLY, DISALLOWING ONLY NET INTEREST OF RS.1,26,132/- U/S .80P(2)(A)(I) OF THE I.T.ACT, 1961. 3. WHEN THE MATTER WAS CALLED FOR HEARING, THE LEAR NED AR FOR THE ASSESSEE PLEADED FOR ALLOWABILITY OF INTEREST OF RS .3,00,250/- RECEIVED FROM NATIONALIZED BANK UNDER S.80P(2)(A)(I) OF THE ACT. IN THE ALTERNATIVE, SHE CONTENDED THAT THE EXPENDITURE ATT RIBUTABLE TO EARNING OF SUCH INCOME REQUIRES TO BE DEDUCTED FROM THE GRO SS INTEREST EARNED FROM THE NATIONALIZED BANK. 4. THE LEARNED AR ALSO PLEADED THAT THE ASSESSEE IS ENTITLED TO DEDUCTION OF RS.50,000/- AGAINST THE INTEREST INCOM E SO EARNED UNDER S.80P(2)(A)(I) OF THE ACT. 5. THE LEARNED DR RELIED UPON THE ORDER OF THE LOWE R AUTHORITIES. 6. WE DO NOT FIND ANY MERIT IN THE PRINCIPLE PLEA L EAD BY ASSESSEE FOR ALLOWABILITY OF INTEREST DERIVED ON DEPOSITS UN DER S. 80P(2)(A)(I) OF THE ACT OF SURPLUS FUNDS WITH THE NATIONALIZED BANK , IN VIEW OF SEVERAL DECISIONS INCLUDING THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF SBI EMPLOYEES CO-CREDIT & SUPPLY SOCIETY V. CIT(A) (2016) 389 ITR 578. THUS, WE DECLINE TO INTERFERE WITH TH E ACTION OF THE REVENUE ON THIS SCORE. HOWEVER, WE FIND MERIT IN T HE ALTERNATIVE PLEA OF THE ASSESSEE FOR ALLOWABILITY OF EXPENDITURE ATT RIBUTABLE TO THE EARNING OF SUCH INCOME, IF ANY. THIS ASPECT WILL R EQUIRE FACTUAL VERIFICATION AND ACCORDINGLY REMITTED BACK TO THE F ILE OF THE AO FOR DECIDING THE ALLOWABILITY OF EXPENDITURE ATTRIBUTAB LE TO INTEREST EARNED ON DEPOSITS, IF ANY, WITH NATIONALIZED BANKS. ITA NO. 144/AHD/17 [KAIVAL CREDIT CO.OP. SOCIETY LTD. VS. ITO] A.Y. 2013-14 - 3 - 6.1 WE ALSO REMIT THE ISSUE TOWARDS ELIGIBILITY OF STANDARD DEDUCTION CONTEMPLATED UNDER S.80P(2)(C)(II) OF THE ACT IN TH E LIGHT OF THE FACTS OF THE CASE, TO THE FILE OF AO. THE AO SHALL DECID E THE ISSUE IN ACCORDANCE WITH THE LAW AFTER GIVING FAIR OPPORTUNI TY TO THE ASSESSEE. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 03/07/2018 TRUE COPY S. K. SINHA / COPY OF ORDER FORWARDED TO:- ..' / REVENUE 2.' / ASSESSEE 0. ) % 1) / CONCERNED CIT 4. % 1)- / CIT (A) 4.5'67!8)8& 9 9 / DR, ITAT, AHMEDABAD :.7;<= / GUARD FILE. BY ORDER / 9 / 9 THIS ORDER PRONOUNCED IN OPEN COURT ON 03/07/20 18