ITO, Salem V. S - 1213, Selliyampalayam Primary Agricultural Credit Co-Operative Society Ltd., Salem

ITA 1490/CHNY/2014

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 7124 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 30-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C VATCHALA
• Assessee Lawyers: A S SRIRAMAN I T A NOS TO MDS

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . , . ! '# , $ % BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI V. DURGA RAO, JUDICIAL MEMBER ./ ITA NO.1488/MDS/2014 $ # '# / ASSESSMENT YEAR : 2009-10 THE INCOME TAX OFFICER, WARD II(3), SALEM 7. V. M/S S-703 MALLUR PRIMARY AGRICULTURAL CO-OP CREDIT SOCIETY LTD., 15 / 21 TRICHY MAIN ROAD, MALLUR POST, SALEM-636 203. PAN : AADTS 4205 J ()*/ APPELLANT) (+,)*/ RESPONDENT) ./ ITA NO.1489/MDS/2014 $ # '# / ASSESSMENT YEAR : 2009-10 THE INCOME TAX OFFICER, WARD II(3), SALEM 7. V. M/S S1403, JAGIRAMMAPALAYAM PACCS LTD., JAGIR REDDIPATTY, MAMANGAM, SALEM 636 302. PAN: AAEAS 6670 H ()*/ APPELLANT) (+,)*/ RESPONDENT) 2 I.T.A. NOS.1488 TO 1493/MDS/14 ./ ITA NO.1490/MDS/2014 $ # '# / ASSESSMENT YEAR : 2009-10 THE INCOME TAX OFFICER, WARD II(3), SALEM 7. V. M/S S 1213, SELLIYAMPALAYAM PRIMARY AGRICULTURE CREDIT CO- OPERATIVE SOCIETY LTD., NARASINGAPURAM POST, ATTUR TALUK, SALEM 636 108. PAN : AACAS 2459 Q ()*/ APPELLANT) (+,)*/ RESPONDENT) ./ ITA NO.1491/MDS/2014 $ # '# / ASSESSMENT YEAR : 2009-10 THE INCOME TAX OFFICER, WARD II(3), SALEM 7. V. M/S S 1061, VEMBADITHALAM PRIMARY AGRICULTURE CO-OPERATIVE CREDIT SOCIETY LTD., KAKKAPALAYAM MAIN ROAD, VEMBADITHALAM (PO), PAN : AAEAS 6668 K ()*/ APPELLANT) (+,)*/ RESPONDENT) ./ ITA NO.1492/MDS/2014 $ # '# / ASSESSMENT YEAR : 2007-08 THE INCOME TAX OFFICER, WARD II(3), SALEM 7. V. M/S S 1140, S.KOLLAPATTY PRIMARY AGRICULTURE CREDIT CO- OPERATIVE SOCIETY LIMITED, S. KOLLAPATTY POST, SALEM 636 030. PAN : AADTS 5683 A ()*/ APPELLANT) (+,)*/ RESPONDENT) )* - . / APPELLANT BY : MS. C. VATCHALA, JCIT +,)* - . / RESPONDENTS BY : SHRI A.S. SRIRAMAN, ADVOCATE 3 I.T.A. NOS.1488 TO 1493/MDS/14 ./ ITA NO.1493/MDS/2014 $ # '# / ASSESSMENT YEAR : 2009-10 THE INCOME TAX OFFICER, WARD II(3), SALEM 7. V. M/S S-6749, UMAYALPURAM PRIMARY AGRICULTURAL CO- OPERATIVE CREDIT SOCIETY LTD., UMAYALPURAM POST, ATTUR TALUK, SALEM636 119. PAN : AACAS 2874 B ()*/ APPELLANT) (+,)*/ RESPONDENT) )* - . / APPELLANT BY : MS. C. VATCHALA, JCIT +,)* - . / RESPONDENT BY : SHRI T. VASUDEVAN, ADVOCATE ! - / / DATE OF HEARING : 25 TH AUGUST, 2014 0' - / / DATE OF PRONOUNCEMENT: 27 TH AUGUST, 2014 / O R D E R PER BENCH: ALL THESE BUNCH OF APPEALS FILED BY THE REVENUE R ELATE TO PRIMARY AGRICULTURAL CO-OPERATIVE SOCIETIES. FACTS ARE SIMILAR IN ALL THESE APPEALS. THE ONLY ISSUE INVOLVED IN THESE AP PEALS IS THAT THE ASSESSEES, I.E. THE AGRICULTURAL CO-OPERATIVE CREDI T SOCIETIES HAD ADVANCED CREDIT AND OTHER FACILITIES TO THEIR NOMI NAL OR B CLASS MEMBERS AND CLAIMED DEDUCTION UNDER SECTION 80P(2)( A)(I) OF THE INCOME-TAX ACT, 1961. ACCORDING TO A.O., CLAIM OF THE ASSESSEE WAS HIT BY 80P(2)(A)(I) TO THE EXTENT OF NOMINAL / B CLASS MEMBERS FOR THE REASON THAT THEY ARE NOT TREATED AS MEMBERS IN THE 4 I.T.A. NOS.1488 TO 1493/MDS/14 AUDIT RECORDS, ETC. THEREFORE, THE ASSESSEES ARE N OT ENTITLED FOR DEDUCTION. 2. ON APPEAL BY THE ASSESSEE, LD. CIT(APPEALS) ALLO WED THE CLAIM OF THE ASSESSEE UNDER SECTION 80P(2)(A)(I) BY FOLLOWING THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN I.T.A. NOS.292 & 293/MDS/2014. 3. AGAINST THE ORDER OF THE CIT(APPEALS), THE REVEN UE CARRIED THE MATTER IN APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEES SUBMITTED THAT THE VERY SIMILAR ISSUE WAS CONSIDERE D BY THE HON'BLE TRIBUNAL AND DECIDED IN FAVOUR OF ASSESSEE. 5. ON THE OTHER HAND, LD. D.R. RELIED ON THE ORDERS OF THE ASSESSING OFFICER. 6. WE HAVE HEARD BOTH SIDES AND PERUSED THE RECORDS AND ORDERS OF THE AUTHORITIES BELOW. WE FIND THAT A CO -ORDINATE BENCH OF THIS TRIBUNAL HAS CONSIDERED THE VERY SIMILAR ISSUE IN I.T.A. NOS.292 & 293/MDS/2014 IN THE CASE OF SL(SPL) 151, KARKUDAL PATTY PRIMARY AGRICULTURAL CO-OPERATIVE CREDIT SOCIETY LTD., ETC. AND HELD AS UNDER:- 5 I.T.A. NOS.1488 TO 1493/MDS/14 7. WE HAVE HEARD BOTH PARTIES AND GONE THROUGH THE CASE FILE. AS STATED IN THE PRECEDING PARAGRAPHS, THE CIT(A) HAS PROCEEDED TO ENHANCE THE ASSESSMENT(SUPRA) ONLY ON THE GROUND THAT THE ASSESSEES CREDIT AND VARIOUS OTHER LOAN FACILITIES HAVE BEEN ALLOWED TO BE AVAILED BY B CLASS NOMINAL MEMBERS WHOSE LIABILITY IS LIMITED, AT THE BEST; TO THE EXTENT OF LOAN REPAYABLE INSTEAD OF A CLASS MEMBE RS WHO HAVE VOTING RIGHTS AND DIVIDEND CLAIM, AND ALSO THAT THE LATTER MEMBERS ARE JOINTLY AND SEVERELY LIABLE. IN THIS BACKDROP, WHEN WE PERUSE THE RELEVANT PROVISIO NS OF THE STATE CO-OPERATIVE SOCIETIES ACT, 1983, GOVE RNING THE ASSESSEE-SOCIETY, IT IS EVIDENT FROM THE DEFINI TION OF MEMBER U/S 2(16) THAT THE SAME INCLUDES AN ASSO CIATE MEMBER U/S 2(6) APPENDED THEREIN. IN OTHER WORD S, THE NOMINAL MEMBERS ALSO ENJOY STATUTORY RECOGNIT ION AS PER THE ACT. THE NET RESULT IS THAT ONCE THE N OMINAL MEMBERS OR NON-VOTING MEMBERS ARE THEMSELVES INCLUDED IN THE DEFINITION OF MEMBERS, THEY SATIS FY THE RELEVANT CONDITION IMPOSED BY THE LEGISLATURE U/S 80P(2)(A)(I). WE MAKE IT CLEAR THAT WE ARE DEALING WITH A DEDUCTION PROVISION TO BE INTERPRETED LIBERALLY. IN OUR CONSIDERED OPINION, THE OBJECTIONS OF THE REVENUE T HAT THE MEMBERS DEFINED IN SUB-CLAUSE(I) OF SECTION 8 0P(2) SHOULD ONLY INCLUDE VOTING MEMBERS WOULD AMOUNT TO A CLASSIFICATION WITHIN CLASSIFICATION WHICH IS BEYON D THE PURVIEW OF TAX STATUTE; UNLESS PROVIDED SPECIFICALL Y BY THE LEGISLATURE. MOREOVER, WE FIND THAT THE CASE L AW OF HON'BLE PUNJAB & HARYANA HIGH COURT (SUPRA) ALSO 6 I.T.A. NOS.1488 TO 1493/MDS/14 SUPPORTS THE ASSESSEES CASE WHEREIN IT HAS BEEN HE LD UNDER THE VERY PROVISION THAT FOR THE PURPOSE OF IMPUGNED DEDUCTION, IT IS IRRELEVANT SO FAR AS CLASSIFICATION OF THE MEMBERS IN A OR B CATEGOR Y IS CONCERNED. WE FOLLOW THE SAME AND ACCEPT CONTENTIONS OF THE ASSESSEE. 7. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL, WE DISMISS THE APPEALS FILE D BY THE REVENUE. 8. IN THE RESULT, ALL THE APPEALS FILED BY THE REVE NUE ARE DISMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 27 TH OF AUGUST, 2014 AT CHENNAI. SD/- SD/- ( . ) ( . ! '# ) (A. MOHAN ALANKAMONY) (V. DURGA RAO) /ACCOUNTANT MEMBER $ /JUDICIAL MEMBER /CHENNAI, = /DATED, THE 27 TH AUGUST, 2014. KRI. > - +$/?@ A@'/ /COPY TO: 1. )* /APPELLANT 2. +,)* /RESPONDENT 3. ! B/ () /CIT(A), SALEM 4. ! B/ /CIT, SALEM 5. @ D' +$/$ /DR 6. 'E# F /GF.