Income Tax Officer Ward-4(1), Nagpur V. M/s. Girnar Urban Credit Co-Operative Society Ltd., Nagpur

ITA 146/NAG/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1905 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 25-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K DAHARIA
• Assessee Lawyers: VINOD TAJPURIA; ASHISH MUKIM
• Keywords: Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR E-BENCH, NAGPUR (THROUGH VIDEO CONFERENCE AT MUMBAI) . . , . / , . . BEFORE SHRI R.K. GUPTA, JUDICIAL MEMBER /AND SHRI RAJENDRA, ACCOUNTANT MEMBER . / ITA NO.146/NAG/2011 / ASSESSMENT YEAR 2008-09 INCOME TAX OFFICER, WARD 4(1), 3 RD FLOOR, SARAF CHAMBERS, NAGPUR. VS. M/S. GIRNAR URBAN CREDIT CO-OP. SOCIETY LTD., SANTAJI MATH, BHANDARA ROAD, NAGPUR-440 018. PAN: AAAAG 2190 G ( / APPELLANT ) ( / RESPONDENT ) REVENUE BY : SHRI A.K. DAHARIA ASSESSEE BY : SHRI VINOD TAJPURIA & SHRI ASHISH MUKIM ! '#$ / DATE OF HEARING : 22-01-2013 %& ! '#$ / DATE OF PRONOUNCEMENT : 22-01-2013 '( / O R D E R PER RAJENDRA, AM THE FOLLOWING ARE THE GROUNDS OF APPEAL FILED BY TH E ASSESSING OFFICER (AO) AGAINST THE ORDER DT. 22-08-2011 OF THE CIT(A)-II, NAGPUR: 1. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LEARNED CIT(A) ERRED IN ALLOWING DEDUCTION U/S. 80P(2)(A)(I) TO TH E ASSESSEE, THOUGH THE ASSESSEE IS ENGAGED IN BANKING ACTIVITIES. 2. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE LEARNED CIT(A) ERRED IN HOLDING THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S. 80P(2)(A); THOUGH THE ASSESSEE HAS ASSUMED THE CHARACTER OF A BANK. 3. IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, LEARNED CIT(A) ERRED IN NOT CONSIDERING AOS CITATION OF HONBLE M ADRAS HIGH COURT CASE AS REPORTED IN 144 CTR 240 (1998). ITA NO.146/NAG/2011 M/S. GIRNAR URBAN CREDIT CO-OP. SOCIETY LTD 2 4. ANY OTHER GROUND THAT MAY BE RAISED DURING THE COUR SE OF HEARING OF APPEAL. 2. ASSESSEE, A CO-OPERATIVE SOCIETY FILED ITS RETURN OF INCOME ON 18-09-2008 DECLARING TOTAL INCOME AT RS. NIL. INITIALLY, ASSE SSMENT WAS PROCESSED U/S. 143(1) OF THE INCOME TAX ACT, 1961 (ACT). LATER ON, CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS FINALISED BY THE ASSESSING OFFICER ( AO) ON 29-11-2010 U/S. 143(3) OF THE ACT DETERMINING INCOME AT RS. 10.93 LAKHS. 3. DURING THE ASSESSMENT PROCEEDINGS, AO FOUND THAT A SSESSEE HAD CLAIMED A DEDUCTION AMOUNTING TO RS. 9.29 LAKHS U/S. 80P OF T HE ACT. INVOKING THE PROVISIONS OF SECTION 80P(4), WHICH HAS BEEN INTRODUCED W.E.F. 01-04-2007, THE AO HELD THAT THE ASSESSEE WAS A CO-OPERATIVE BANK OTHER THAN PRIMARY AGRICULTURAL CREDIT SOCIETY/PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANKS, THAT THE ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION U/S. 80P(2) (A)(I) OF THE ACT, THAT THE DEFINITION OF CREDIT CO-OPERATIVE SOCIETY WAS AVAILABLE IN THE BANKING REGULATION ACT, THAT THE ASSESSEE WAS A CO-OPERATIVE CREDIT SOCIETY WITHIN T HE MEANING OF SECTION 56(C)(1)(CCII) OF THE BANKING REGULATION ACT. RELY ING UPON THE ORDER OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF STATE BANK OF INDI A STAFF CO-OPERATIVE SOCIETY LTD., (144 CTR 240), AO DENIED THE BENEFIT OF PROVISIONS OF SECTION 80P(2)(A)(I) OF THE ACT. 4. ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPE LLATE AUTHORITY (FAA). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND ASS ESSMENT ORDER, HE HELD THAT ASSESSEE HAD NEVER CLAIMED THE DEDUCTION U/S. 80P I N RESPECT OF PRIMARY AGRICULTURAL CREDIT SOCIETY/PRIMARY CO-OPERATIVE AGRICULTURAL AN D RURAL DEVELOPMENT BANKS, THAT ASSESSEE WAS A CREDIT CO-OPERATIVE SOCIETY, THAT AS PER BY-LAWS OF THE CREDIT CO- OPERATIVE SOCIETY IT WAS CARRYING OUT VARIOUS ACTI VITIES FOR FULFILLMENT OF ALL OR ANY OF ITS OBJECTIVES, THAT THE AO HAD MADE THE DIS-ALLOWA NCE ON THE PRESUMPTION THAT ASSESSEE CO-OPERATIVE SOCIETY WAS ACTUALLY A CO-OPE RATIVE BANK, THAT AS PER PROVISIONS OF SECTION 80P(2)(A)(I) TWO CATEGORIES O F CO-OPERATIVE SOCIETIES WERE CONTEMPLATED IN THE ACT, THAT FIRST CATEGORY CARRIE D ON THE BUSINESS OF BANKING WHERE AS THE OTHER ONE PROVIDED CREDIT FACILITIES TO THE MEMBERS, THAT BOTH KIND OF ENTITIES WERE DISTINGUISHABLE AND SEPARATE. AFTER EXAMINING THE PROVISIONS OF BANKING REGULATION ACT AND CIRCULAR NO. 14 OF 2002 ISSUED B Y THE CBDT, HE HELD THAT ASSESSEE WAS NOT A CO-OPERATIVE BANK, BUT ONLY A RE SOURCE SOCIETY. HE FINALLY HELD THAT, AO HAD FAILED TO APPRECIATE THE DISTINCTION B ETWEEN CREDIT CO-OPERATIVE SOCIETY AND CO-OPERATIVE BANK. 5. BEFORE US, DEPARTMENTAL REPRESENTATIVE (DR) RELIED UPON THE ORDER OF THE AO. AUTHORISED REPRESENTATIVE (AR) SUBMITTED THAT THE A PPELLANT CO-OPERATIVE SOCIETY WAS NOT A BANK, THAT THE SAME ISSUE HAS BEEN DECIDE D BY THE TRIBUNAL IN THE CASE OF THE MEDICAL COLLEGE HOSPITAL EMPLOYEES CREDIT CO-OP . SOCIETY LTD., (ITA NO. 85/NAG/2011) VIDE ORDER DT. 19-12-2012 BY ITAT, NAG PUR BENCH. 6. WE HAVE PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IN THE CASE OF THE MEDICAL COLLEGE HOSPITAL EMPLOYEES CREDIT CO-OP . SOCIETY LTD., (SUPRA) WHERE WE BOTH WERE THE PARTIES TO THE ORDER AND WE HAVE H ELD AS UNDER: AFTER HEARING THE RIVAL SUBMISSIONS, WE ARE OF THE OPINION THAT THE ORDER OF THE FAA DOES NOT SUFFER FROM ANY LEGAL INFIRMITY. AFTER AN ALYSING VARIOUS PROVISIONS OF THE ACTS ITA NO.146/NAG/2011 M/S. GIRNAR URBAN CREDIT CO-OP. SOCIETY LTD 3 AND THE CIRCULARS, HE HAS HELD THAT THE ASSESSEE IS NOT A CO-OPERATIVE BANK. IN OUR CONSIDERED OPINION, ASSESSEE-COOPERATIVE SOCIETY CA NNOT BE DEPRIVED OF THE BENEFITS OF DEDUCTIONS AVAILABLE AS PER THE PROVISIONS OF SEC. 80P(2)(A) OF THE ACT, BY INVOKING THE PROVISIONS OF SEC. 80P(2) OF THE ACT WE AGREE WITH FAA, THAT APPELLANT IS A CREDIT CO- OPERATIVE SOCIETY AND NOT A CO-OPERATIVE BANK AND T HEREFORE IT IS ENTITLED TO CLAIM DEDUCTIONS AVAILABLE UNDER CHAPTER-VIA OF THE ACT [ SECTION 80(P)]. INTEREST AMOUNTING TO RS. 11.17 LAKHS, EARNED FROM RESERVE F UND DEPOSIT, IT HAS TO BE TREATED THE BUSINESS INCOME OF THE ASSESSEE FOR THE AY UNDE R CONSIDERATION. FOLLOWING THE SAME, GROUND NOS. 1 TO 4 RAISED BY T HE AO DECIDED AGAINST AO. AS A RESULT, APPEAL FILED BY THE AO STANDS DISMISS ED. ) *+ , -# / '01 ! * 23 ! ' 45. ORDER PRONOUNCED BY E-BENCH AT MUMBAI ON THIS 22 ND DAY OF JANUARY, 2013 *7 0+' - 789 / 22 # 2013 & '( %&:' ; . SD/- SD/- ( . . / R.K. GUPTA ) ( / RAJENDRA ) '+ / JUDICIAL MEMBER $ '+ / ACCOUNTANT MEMBER *7 MUMBAI, ;' DATE: 22 ND JANUARY, 2013 TNMM COPY TO: 1. APPELLANT 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR, ITAT, NAGPUR 6. GUARD FILE :' ' //TRUE COPY// BY ORDER, ASST. REGISTRAR, ITAT