M/s Durga Parameshwari Credit Co-Op Society Ltd., V. ITO, Udupi

ITA 164/BANG/2014

• Counselvise Citation: 16421114 RSA 2014
• Duration Of Justice: 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 16-10-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 28-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR K SHANKAR PRASAD J
• Assessee Lawyers: PRATEEK MARLECHA
• Section: 143(3); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SMT. P. MADHAVI DEVI , JUDICIAL MEMBER A ND SHRI JASON P.BOAZ, ACCOUNTANT MEMBER ITA NO. 164 / BANG/20 14 (ASSESSMENT YEAR: 20 10 - 11 ) M/S.DURGAPARAMESHWARI CREDIT CO - OP.SOCIETY LTD. M AIN ROAD, PARKALA, UDUPI. APPELLANT PAN:AAEAS8939F VS. INCOME - TAX OFFICER, WARD 1, UDUPI. RESPONDENT APPELLANT BY: SHRI PRATEEK MARLECHA, CA. RESPONDENT BY: DR.K.SHANKAR PRASAD, JCIT(DR) DATE OF HEARING : 16/10/2014. D ATE OF PRONOUNCEMENT: 31 /10/2014. O R D E R PER SMT.P.MADHAVI DEVI, JM: THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A), MYSORE DATED, 31 - 10 - 2013 FOR THE ASSESSMENT YEAR 2010 - 11. 2. BRIEF FACTS OF THE CASE ARE THAT T HE ASSESSEE IS A CO - OPERATIVE SOCIETY PROVIDING CREDIT FACILITIES TO ITS MEMBERS. IT FILED ITS RETURN OF INCOME ON 14 - 10 - 2010 DECLARING GROSS TOTAL ITA NO . 161 /BANG/20 1 4 DUGAPARAMESHWARI CREDIT CO - OPERATIVE SOCIETY LTD. PAGE 2 OF 4 INCOME OF RS.17,63,753/ - AND THE CLAIMED THE SAME AS DEDUCTION U/S 80P(2)(A)(I) OF THE INCOME - TAX ACT, 1961 [HEREINAFTER REFERRED TO AS 'THE ACT']. DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT, THE AO HELD THAT THE ASSESSEE IS CARRYING ON THE BANKING BUSINESS AND, THEREFORE, FALLS UNDER EXCLUSION CLAUSE UNDER SUB - SECTION (4) OF SEC.80P OF THE ACT AND THEREFORE IS NOT ELIGIBLE FOR DEDUCTION U/S 80P(2)(A)(I) OF THE ACT. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A) WHO CONFIRMED THE ORDER OF THE AO AND THE ASSESSEE IS IN SECOND APPEAL BEFORE US. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS A CO - OPERATIVE SOCIETY CARRYING ON AND RENDERING BANKING AND CREDIT FACILITIES TO ITS MEMBERS AND THEREFORE IT CANNOT BE SAID TO BE CARRYING ON THE BUSINESS OF A CO - OPERATIVE BANK. IN SUPPORT OF HIS CONTENTION, HE PLACED RE LIANCE UPON THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. SRI BILURU GURUBASAVA PATTINA SAHAKARI SANGHA NIYAMITHA IN ITA NO.5006/2013 DATED 5 - 2 - 2014 . THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 4. HAVING REGARD TO THE RIVAL CONTENTIONS AND ALSO THE MATERIAL ON RECORD, WE FIND THAT THE HON BLE KARNATAKA HIGH COURT IN THE CASE CITED SUPRA WAS DEALING WITH THE CASE OF A ITA NO . 161 /BANG/20 1 4 DUGAPARAMESHWARI CREDIT CO - OPERATIVE SOCIETY LTD. PAGE 3 OF 4 SOCIETY WHICH WAS INITIALLY ALLOWED THE DEDUCTION U/ S 80P(2)(A)(I) OF THE ACT BY THE AO AND SUBSEQUENTLY, THE CIT U/S 263 OF THE ACT, REVISED THE ORDER OF THE AO HOLDING THAT THE DEDUCTION U/S 80P(2)(A)(I) WAS NOT ALLOWABLE IN VIEW OF THE PROVISIONS OF SEC.80P(4) OF THE ACT. THE TRIBUNAL SET ASIDE THE ORDER U/S 263 AND ONLY FURTHER, THE HON BLE HIGH COURT HELD THAT SUB - SECTION (4) OF SEC.80P WAS APPLICABLE ONLY TO A BANK AND NOT TO A CO - OPERATIVE SOCIETY SINCE IT HAS NOT OBTAINED ANY BANKING LICENSE AND WAS PROVIDING CREDIT FACILITIES ONLY TO ITS MEMBERS. T HUS, THE ORDER OF THE TRIBUNAL SETTING ASIDE THE ORDER U/S 263 WAS CONFIRMED BY THE HON BLE HIGH COURT. SINCE THE FACTS OF THE CASE BEFORE US ARE SIMILAR, R ESPECTFULLY FOLLOWING THE DECISION OF THE HON BLE HIGH COURT, WE HOLD THAT THE ASSESSEE BEFORE US I S ALSO ELIGIBLE FOR DEDUCTION U/S 80P(2 ) (A)(I) OF THE ACT. 5. IN THE RESULT, THE ASSESSEE S APPEAL IS ALLOWED. PRON OUNCED IN THE OPEN COURT ON 31 ST OF OCTO BER, 201 4. S D/ - S D/ - (JASON P BOAZ ) ( SMT. P.MADHAVI DEVI ) ACCOUNTA NT MEMBER JUDICIAL MEMBER EKSRINIVASULU ITA NO . 161 /BANG/20 1 4 DUGAPARAMESHWARI CREDIT CO - OPERATIVE SOCIETY LTD. PAGE 4 OF 4 COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE T RI BUNAL BANGALORE