M/s. Mahaveera Minority Credit Co-operative Society Ltd, Huvinahadagasalli V. Income Tax Officer, Ward-1, Hosapete

ITA 1603/BANG/2017

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 3896 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 25-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 56

Judgement Text

ITA.1603/BANG/2017 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'B', BENGALURU BEFORE SHRI. A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI. LALIET KUMAR, JUDICIAL MEMBER I.T.A NO.1603/BANG/2017 (ASSESSMENT YEAR : 2013-14) M/S. MAHAVEERA MINORITY CREDIT COOPERATIVE SOCIETY LTD, MAIN BAZAAR, HUVINAHADAGASALLI 583 219 .. APPELLANT PAN : AAAAM4533H V. INCOME-TAX OFFICER, WARD -1, HOSAPETE .. RESPONDENT ASSESSEE BY : SHRI. SURESH MUTHUKRISHNAN, CA REVENUE BY : SMT. NANDINI DAS, ADDL. CIT HEARD ON : 17.09.2018 PRONOUNCED ON : 20.09.2018 O R D E R PER LALIET KUMAR, JUDICIAL MEMBER : THE PRESENT APPEAL IS FILED BY THE ASSESSEE AGAINS T THE ORDER OF THE CIT (A), KALABURAGI, DT.20.06.2017, FOR THE ASS ESSMENT YEAR 2013-14. ITA.1603/BANG/2017 PAGE - 2 02. FOLLOWING ARE THE GROUNDS OF APPEAL RAISED BY T HE ASSESSEE : ITA.1603/BANG/2017 PAGE - 3 02. THE LD. AR FOR THE ASSESSEE SUBMITTED THAT FOR THE ASSESSMENT YEAR 2015-16, THE SMC BENCH OF THIS TRIBUNAL IN THE ASSESSEES OWN CASE HAD REMANDED THE MATTER BACK TO THE FILE OF TH E CIT(A) FOR DECIDING ON FACTS AND DECIDE WHETHER CASE OF THE AS SESSEE IS COVERED BY THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE MATTER OF TUMKUR MERCHANTS SOUHARDA CREDIT CO-OPERA TIVE LTD [230 TAXMAN 309], OR ARE THE FACTS OF THE CASE SIMI LAR TO THE MATTER IN PCIT V. TOTGARS COOPERATIVE SALE SOCIETY [395 IT R 611]. FOR READY REFERENCE HE HAS DRAWN OUR ATTENTION TO PARAS 3 AND 4 OF THE SMC ORDER (SUPRA), WHICH READS AS UNDER : 3. IT WAS SUBMITTED BY ID. AR OF ASSESSEE THAT THE ASSESSEE'S CLAIM FOR DEDUCTION U/S. 8OP (2) IN RESPECT OF INTE REST INCOME SHOULD BE DECIDED IN FAVOUR OF THE ASSESSEE BECAUSE THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGEME NT OF HONBLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. V S. ITO AS REPORTED IN 230 TAXMAN 309. AT THIS JUNCTURE , THE BENCH POINTED OUT THAT ON THIS ISSUE, THERE IS ONE MORE JUDGMENT OF HONBIE KARNATAKA HIGH COURT RENDERED IN THE CASE OF PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY AS REPORTED IN 395 ITR 611 (KARN). THE BENCH POINTED OUT THAT IN BOTH THESE JUDGEMENTS, THE ULTIMATE CONCLUSION IS DIFFERENT BE CAUSE THE FACTS ARE DIFFERENT BUT THERE IS NO CONTRADICTION IN THESE TWO JUDGMENTS. THE BENCH POINTED OUT THAT IN THE CASE OF TUMKUR MERCHA NTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO (SUPRA), IT WAS FOU ND THAT THE AMOUNT DEPOSITED IN BANK WAS OUT OF ASSESSEE'S OWN FUNDS AND NOT OUT OF ITS LIABILITY AND THEREFORE, 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 THE AMOUNT DEPOSITED IN BANK WAS OUT OF ASSESSEE'S LIAB ILITY AND NOT OUT OF ASSESSEE'S OWN FUNDS AND THEREFORE, THIS ISS UE WAS DECIDED AGAINST THE ASSESSEE. THE BENCH OBSERVED TH AT IN THE PRESENT CASE, THERE IS NO FINDING OF ANY OF THE AUT HORITIES BELOW ON THIS FACTUAL ASPECT AND THEREFORE, IT IS PROPER TO RESTORE BACK THE MATTER TO THE FILE OF CIT(A) FOR FRESH DECISION AFT ER EXAMINING THE FACTS OF PREENT CASE IN THE LIGHT OF THESE TWO JUDG EMENTS OF HON'BLE KARNATAKA HIGH COURT. THE ID. AR OF ASSESSE E AGREED ITA.1603/BANG/2017 PAGE - 4 TO THIS PROPOSITION PUT FORWARD BY THE BENCH. THE I D. DR OF REVENUE SUBMITTED THAT ON THIS ASPECT, HE IS ALSO IN AGREEM ENT WITH THE PROPOSITION PUT FORWARD BY THE BENCH . 4. IN VIEW OF THE ABOVE DISCUSSION, I SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER BACK TO THE FILE OF CIT(A) F OR FRESH DECISION AFTER EXAMINING THE FACTS OF PRESENT CASE FIRST IN THE LIGHT OF THESE TWO JUDGMENTS OF HON'BLE KARNATAKA HIGH COURT RENDE RED IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIV E LTD. VS. ITO (SUPRA) AND PCIT AND ANOTHER VS. TOTAGARS CO-OP ERATIVE SALE SOCIETY (SUPRA). THEREAFTER THE CIT(A) SHOULD PASS NECESSARY ORDER AS PER LAW AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. IT WAS SUBMITTED BY THE LD. AR THAT THE FACTS OF TH E PRESENT CASE ARE SIMILAR TO THE FACTS FOR THE A. Y. 2015-16 AND THER EFORE FOLLOWING THE EARLIER ORDER OF THE TRIBUNAL, PRESENT MATTER A LSO BE REMANDED BACK TO THE FILE OF THE CIT (A) FOR DECIDING THE IS SUE AFRESH. 03. PER CONTRA, THE LD. DR HAS DRAWN OUR ATTENTION TO PARA 6 OF THE CIT (A) ORDER WHERE THE ISSUE HAS BEEN DELIBERA TED BY THE CIT (A), AS UNDER : 6. THEREFORE, LOOKING TO THE FACTS AND CIRCUMSTANCE S OF THIS CASE, THAT THE ASSESSING OFFICER WAS RIGHT IN TAXING THE INTEREST INCOME, INDICATED ABOVE, UNDER SECTION 56 OF THE ACT.'. THE STATEMENT OF FACTS AND THE GROUND S GIVEN DURING THE APPELLATE PROCEEDINGS ARE VAGUE. I N LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE TH E APPELLANT'S CONTENTION STANDS ON A WEAK FOOTING AND IS WITHOUT BASIS AND LACKS MERITS. THE APPEAL OF THE APPELLANT, ON A PRELIMINARY EXAMINATION, DOES NOT S EEM TO HAVE STRONG MERITS OR GROUNDS FOR CONSIDERATION. I N LIGHT OF THE AFORESAID OBSERVATIONS, I HAVE NO HESITATION TO SAY THAT THE AO IS JUSTIFIED AND I DO NOT FIND ANY NEED TO I NTERFERE WITH THE ORDER. ALL THE RELEVANT GROUNDS OF APPEAL NOS.2 TO 4 OF THE APPELLANT ARE HEREBY DISMISSED. ITA.1603/BANG/2017 PAGE - 5 THE LD. DR HAS ALSO DRAWN OUR ATTENTION TO PARA 15 OF THE ASSESSMENT WHEREIN THE AO HAS MENTIONED AS UNDER : 15. IN VIEW OF THE ABOVE, IT IS CLEAR THAT A CO- OPERATIVE BANK IS A COMMERCIAL BANK AND DOES NOT FALL UNDER THE PURVIEW OF A CO-OPERATIVE SOCIETY' REFERRED IN SECTION 80P(2)(D) OF THE INCOME TAX ACT , 1961. IN THE PRESENT CASE, THE ASSESSEE HAS EARNED INTERE ST INCOME OF RS.2,80,529/- WAS DERIVED FROM ITS INVEST MENT IN CO OPERATIVE BANK & OTHER BANK. THERE WOULD NOT BE ANY EXPENDITURE IN EARNING INTEREST ON FIXED DEP OSITS FROM THE BANKS. THE INTEREST ON FIXED DEPOSITS IS E ARNED AUTOMATICALLY AND NO EXERCISE OR ATTEMPT IS REQUIRE D BY THE ASSESSE E . THE SAME HAS BEEN CLAIMED AS DEDUCTION U/S. 80P(2) OF THE ACT. IN VIEW OF THE ABOVE DISCUS SION, THE DEDUCTION U/S. 80P(2)(D) OF THE ACT, OF RS.2,80,529/- CLAIMED BY THE ASSESSEE IS NOT ALLOWE D AND ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 04. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE AO HAS HELD THAT THE ASSESSEE DOES NOT FALL WIT HIN THE PURVIEW OF COOPERATIVE SOCIETY AS REFERRED IN SECTION 80P(2 )(D) OF THE ACT AND SIMILAR VIEW WAS TAKEN BY THE CIT (A). AS NOTI CED HEREIN ABOVE, THE TRIBUNAL IN THE CASE OF THE ASSESSEE FOR AY 2015-16, AFTER CONSIDERING THE WHOLE GAMUT OF FACTS HAD RECO RDED A FINDING THAT IT IS INCUMBENT UPON THE LOWER AUTHORITIES TO EXAMINE THE FACTS IN THE LIGHT OF THE JUDGMENT OF THE HONBLE JURISDI CTIONAL HIGH COURT IN THE MATTER OF TUMKUR MERCHANTS SOUHARDA CREDIT C O-OPERATIVE LTD (SUPRA) AND TOTGARS COOPERATIVE SALE SOCIETY (S UPRA). WE DO NOT FIND ANY CHANGE IN FACTS FOR THE PRESENT ASSESS MENT YEAR. THEREFORE WE REMAND THE MATTER BACK TO THE CIT (A) WITH A ITA.1603/BANG/2017 PAGE - 6 DIRECTION TO DO THE NEEDFUL IN TERMS OF THE DIRECTI ONS ISSUED BY THE SMC BENCH OF THE TRIBUNAL FOR AY 2015-16 (SUPRA). 05. IN THE RESULT, APPEAL IS ALLOWED FOR STATISTICA L PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH DAY OF SEPTEMBER, 2018. SD/- SD/- (A. K. GARODIA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBE R BENGALURU DATED : 20.09.2018 MCN* COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.