M/s ING Vysya Bank Employees Co-operative Society Limited , Bangalore V. The Income Tax Officer Ward-5(2)(1), Bangalore

ITA 1480/BANG/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1086 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 07-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SIDDAPP A JI R N
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 1480 /BANG/2018 ASSESSMENT YEAR : 2014 - 15 M/S. ING VYSYA BANK EMPLOYEES CO-OPERATIVE SOCIETY LTD., NO. 89/2, SHELL HOUSE, 2 ND FLOOR, J C ROAD, BANGALORE. PAN: AAATI7022G VS. THE INCOME TAX OFFICER, WARD - 5 [2] [1], BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI SURESH MUTHUKRISHNAN, ADVOCATE RESPONDENT BY : SHRI SIDDAPPAJI R.N, ADDL. CIT (DR) DATE OF HEARING : 06 .0 9 .2018 DATE OF PRONOUNCEMENT : 14 .0 9 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE ORDER OF LD. CIT(A)-10, BANGALORE DATED 06.03.2018 FOR ASSES SMENT YEAR 2014-15. 2. THE GROUNDS RAISED BY THE ASSESSEEARE AS UNDER. 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS THEY ARE AGAINST THE APPELLANT ARE OPPOSED TO LAW, EQUITY, WEIGHT OF EVIDENCE, PROBABILITIES, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT[A] IS NOT JUSTIFIED IN DIRECTING THE A.O. TO ASSESS THE INTEREST INCOME EARNED BY THE APPELLANT ON FIXE D DEPOSITS AMOUNTING TO RS. 20,35,192/- UNDER THE HEAD 'OTHER SOURCES' AND THEREBY MAKE DISALLOWANCE U/S.80P[4] OF THE ACT TO THE SAID EXTENT UNDER THE FACTS AND IN THE CIRCUMSTANCES OF THE APP ELLANT'S CASE. 3. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER WI TH THE HON'BLE CCIT/DG, THE APPELLANT DENIES ITSELF LIABLE TO BE C HARGED TO INTEREST U/S 234-B AND 234-D OF THE ACT, WHICH UNDER THE FAC TS AND IN THE CIRCUMSTANCES OF THE APPELLANT'S CASE DESERVES TO B E CANCELLED. ITA NO. 1480/BANG/2018 PAGE 2 OF 4 4. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGE D AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBLY PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLA NT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO OR DER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE COSTS. 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THE ASSESSEES CLAIM FOR DEDUCTION U/S. 80P (2) IN RESPECT OF INTEREST INCOME SHOULD B E DECIDED IN FAVOUR OF THE ASSESSEE BECAUSE THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED I N THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO AS REPORTED IN 230 TAXMAN 309. AT THIS JUNCTURE, THE BENCH POINTED OU T THAT ON THIS ISSUE, THERE IS ONE MORE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT R ENDERED IN THE CASE OF PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOC IETY AS REPORTED IN 395 ITR 611 (KARN). THE BENCH POINTED OUT THAT IN BOTH THESE JUDGMENTS, THE ULTIMATE CONCLUSION IS DIFFERENT BECAUSE THE FACTS ARE DIFFERENT BUT THERE IS NO CONTRADICTION IN THESE TWO JUDGMENTS. THE BENCH PO INTED OUT THAT IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. V S. ITO (SUPRA), IT WAS FOUND THAT THE AMOUNT DEPOSITED IN BANK WAS OUT OF ASSESSEES OWN FUNDS OF THE ASSESSEE AND NOT OUT OF ITS LIABILITY AND THERE FORE, THIS ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE BUT IN THE CASE OF PCIT AND ANOTHER VS. TOTAGARS CO- OPERATIVE SALE SOCIETY (SUPRA), IT WAS FOUND THAT T HE AMOUNT DEPOSITED IN BANK WAS OUT OF ASSESSEES LIABILITY AND NOT OUT OF ASSE SSEES OWN FUNDS AND THEREFORE, THIS ISSUE WAS DECIDED AGAINST THE ASSES SEE. THE BENCH OBSERVED THAT THERE IS NO FINDING OF ANY OF THE AUTHORITIES BELOW ON THIS FACTUAL ASPECT AND THEREFORE, IT IS PROPER TO RESTORE BACK THE MATTER TO THE FILE OF CIT (A) FOR FRESH DECISION AFTER EXAMINING THE FACTS OF PRESENT CASE IN THE LIGHT OF THESE TWO JUDGMENTS OF HON'BLE KARNATAKA HIGH COURT. THE LD. AR OF ASSESSEE AGREED TO THIS PROPOSITION PUT FORWARD BY THE BENCH. THE LD. DR OF REVENUE SUBMITTED THAT ON THIS ASPECT, HE IS ALSO IN AGREEMENT WITH THE PR OPOSITION PUT FORWARD BY THE BENCH BUT WHEN THE MATTER IS BEING RESTORED BACK TO THE FILE OF CIT(A), HE SHOULD BE DIRECTED TO EXAMINE THE APPLICABILITY OF THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF THE CITIZEN CO-OPERAT IVE SOCIETY LTD. VS. ACIT AS REPORTED IN 397 ITR 1 ALSO BECAUSE AS PER PAGE N O. 6 OF THE ASSESSMENT ORDER, IT IS NOTED BY THE AO THAT ANY PERSON FROM T HE PUBLIC WHO IS DESIROUS OF KEEPING DEPOSITS IN THE INSTITUTION CAN MAKE THE DE POSIT BY BECOMING A NOMINAL ITA NO. 1480/BANG/2018 PAGE 3 OF 4 MEMBER FOR A NOMINAL FEES OF RS. 10 TO RS. 100/-. H E SUBMITTED THAT THEREFORE, IT HAS TO BE SEEN AS TO WHETHER THE FULL AMOUNT OR PART AMOUNT OF INTEREST INCOME FOR WHICH DEDUCTION IS CLAIMED U/S 80P IS EA RNED BY THE ASSESSEE FROM THE NOMINAL MEMBERS OR NOT IN THE PRESENT YEAR AND THEREFORE, THE ISSUE REGARDING THE APPLICABILITY OF THIS JUDGMENT OF HON BLE APEX COURT RENDERED IN THE CASE OF THE CITIZEN CO-OPERATIVE SOCIETY LTD. V S. ACIT (SUPRA) SHOULD ALSO BE EXAMINED BY CIT (A). IN THE REJOINDER, THE LD. AR OF ASSESSEE ALSO AGREED THAT THE CIT (A) MAY BE DIRECTED TO EXAMINE THE FAC TS OF PRESENT CASE IN THE LIGHT OF THIS JUDGMENT OF HONBLE APEX COURT ALSO. 4. IN VIEW OF THE ABOVE DISCUSSION, WE SET ASIDE TH E ORDER OF CIT(A) AND RESTORE THE MATTER BACK TO THE FILE OF CIT(A) FOR FRESH DEC ISION AFTER EXAMINING THE FACTS OF PRESENT CASE FIRST IN THE LIGHT OF JUDGMENT OF H ONBLE APEX COURT RENDERED IN THE CASE OF THE CITIZEN CO-OPERATIVE SOCIETY LTD. V S. ACIT (SUPRA) AND THEN ALSO EXAMINE THE FACTS OF PRESENT CASE IN THE LIGHT OF THESE TWO JUDGMENTS OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE O F TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO (SUPRA) AN D PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY (SUPRA). THEREA FTER THE CIT (A) SHOULD PASS NECESSARY ORDER AS PER LAW AFTER PROVIDING ADE QUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DAT E MENTIONED ON THE CAPTION PAGE. SD/- SD/- (N.V. VASUDEVAN) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 14 TH SEPTEMBER, 2018. /MS/ ITA NO. 1480/BANG/2018 PAGE 4 OF 4 COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.