Distt. Co-operative Bank Ltd., Bijnor V. DCIT, Najibabad

ITA 1487/DEL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3669 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 18-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K JAIN
• Assessee Lawyers: PREMJIT S KASHYAP

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , DELHI A BENCH , NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER, AND SHRI SUDHANSHU SRIVASTAV A , JUDICIAL MEMBER ITA NO. 148 7 /D EL /20 1 6 [ ASSESSMENT YEAR : 20 10 - 11 ] DISTT. COOPERATIVE BANK LTD VS. THE D.C. I.T. CIVIL LINE 2, BIJNOR U.P. NAJIBABAD PAN : A ABFD 2205 R [APPELLANT] [RESPONDENT] DATE OF HEARING : 0 8 . 1 1 . 201 7 DATE OF PRONOUNCEMENT : 09 . 1 1 .201 7 ASSESSEE BY : SHRI PREMJIT S. KASHYAP, FCA REVENUE BY : SHRI S .K. JAIN, SR. DR ORDER PER B.P. JAIN, ACCOUNTANT MEMBER, T H IS APPEAL FILED BY THE ASSESSEE ARISE S FROM THE ORDER OF THE CIT(A) , MORADABAD VIDE ORDER DATED 14 / 12 /201 5 FOR A.Y 20 10 - 11 . 2 . T HE ASSESSEE HAS RAISED THE FOLLOWING SOLE GROUND OF APPEAL : 2 THAT THE ADDITION OF RS. 3 , 06 , 200/ - MADE ON ACCOUNT OF DIVIDEND RECEIVED FROM OTHER COOPERATIVE SOCIETIES IS TOTALLY WRONG, UNJUSTIFIED AND ILLEGAL, ASSESSEE RECEIVED THE DIVIDEND INCOME FROM IFFCO AND KRIBHCO AND THE SAME HAS BEEN CLAIMED TO BE EXEMPT FROM TAX ON THE BASIS OF PRINCIPLE OF MUTUALITY. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THA T THE AO MADE ADDITION OF RS. 3,06,200/ - ON ACCOUNT OF DIVIDEND RECEIVED FROM IFFCO AND KRIBHCO WHICH HAD BEEN CLAIMED TO BE EXEMPT ON THE PRINCIPLE OF MUTUALITY. THE CIT(A), ON THE BASIS OF THE DECISION OF THE ITAT DELHI B BENCH IN ASSESSEES OWN CASE FOR A.Y 2009 - 10 & 2007 - 08 IN ITA NOS. 2984 & 2985/DEL/2013 ORDER DATED 08.08.2014, CONFIRMED THE ACTION OF THE AO AND DISMISSED THE GROUND OF THE ASSESSEE. 4. AT THE VERY OUTSET, THE LD. AR FAIRLY CONCEDED THAT THE ISSUE IS COVERED AGAINST THE ASSESSEE BY THE AFOREMENTIONED ORDER OF THE ITAT [SUPRA] AND, THEREFORE, THE APPEAL OF THE ASSESSEE IS LIABLE TO BE DISMISSED. 5. T HE LD. DR RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 3 6 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE CAREFU LLY PERUSED THE RELEVANT MATERIAL ON RECORD. WE HAVE ALSO GONE THROUGH THE ORDER OF THE ITAT DELHI B BENCH IN ASSESSEES OWN CASE [SUPRA] WHEREIN THE APPEALS OF THE ASSESSEE FOR BOTH THE YEARS WERE DISMISSED. THE RELEVANT OPERATIVE PART OF THE SAID ORDE R AT PARA 6 PAGE 2 IS REPRODUCED HEREINBELOW FOR READY REFERENCE: 6. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND PERUSED RELEVANT MATERIAL PLACED BEFORE US. AT THE TIME OF HEARING BEFORE US, LEARNED COUNSEL FAIRLY CONCEDED THAT THE DIVIDEND IS NOT EXEMPT UNDER SECTION 10(34) READ WITH SECTION 115 - O BECAUSE THE COMPANI ES FROM WHOM THE ASSESSEE RECEIVED THE DIVIDEND HAS NOT PAID DIVIDEND DISTRIBUTION TAX. HIS CLAIM IS THAT THE DIVIDEND RECEIVED BY THE ASSESSEE COMPANY IS EXEMPT ON ACCOUNT OF MUTUALITY BECAUSE THOSE COMPANIES WHICH PAID DIVIDEND TO THE ASSESSEE ARE ALSO E ITHER COOPERATIVE BANKS OR THE COMPANIES WHICH ARE BASICALLY RENDERING SERVICES TO THE COOPERATIVE SOCIETIES. WE ARE UNABLE TO ACCEPT THE CONTENTION OF THE ASSESSEE. WHEN THE ASSESSEE CLAIMS ANY EXEMPTION ON THE GROUND OF MUTUALITY, THE BURDEN IS UPON THE ASSESSEE TO ESTABLISH SO. IN THIS CASE, THE LEARNED COUNSEL COULD NOT JUSTIFY HOW THE DIVIDEND RECEIVED BY THE ASSESSEE FROM THREE DIFFERENT COMPANIES IS COVERED UNDER THE CONCEPT OF MUTUALITY. THE ASSESSEE HAS RECEIVED THE DIVIDEND ON ACCOUNT OF ASSESSEE' S INVESTMENT IN THOSE COMPANIES. THE DIVIDEND IS NOT THE 4 CONTRIBUTION TO THE ASSESSEE BY THOSE COMPANIES AND MOREOVER, THE ASSESSEE IS NOT RENDERING SERVICES TO THEM. IN VIEW OF THE ABOVE, WE HOLD THAT THE ASSESSEE'S CONTENTION THAT DIVIDEND RECEIVED FROM THOSE COMPANIES IS EXEMPT ON ACCOUNT OF MUTUALITY IS UNTENABLE. THE SAME IS REJECTED . 7. THUS , U NDER THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THE SOLE GROUND OF THE ASSESSEE IS LIABLE TO BE DISMISSED IN VIEW OF THE DECISION OF THE ITAT DELHI B BENCH [SUPRA]. ACCORDINGLY, RESPECTFULLY FOLLOWING THE SAME, THE GROUND RAISED BY THE ASSESSEE IS DISMISSED. 8 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED . THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 0 9 .1 1 .2017. S D / - S D / - [ SUDHANSHU SRIVASTAV A] [B.P. JAIN] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 0 9 T H NOVEM BER , 201 7 VL/ 5 COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI