Shri Patan Taluka Sahakari Vechan Sangh Ltd., Patan, V. ITO, Ward-2, Patan

ITA 1675/AHD/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 4335 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 06-07-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RIMS SONIA KUMAR
• Section: 80P; 201; 143(2); 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH BEFORE: SHR I AMARJIT SINGH , ACCOUNTANT MEMBER AND MS. MADHUMITA ROY , JUDICIAL MEMBER SHRI PATAN TALUKA SAHAKARI KHARID VECHAN SANGH LTD. SAHKAR BHAVAN, OLD GUNJ BAZAR ROAD, PATAN - 384265 PAN: AAAAT9085H (APPELLANT) VS THE IT O , WARD - 2 , PATAN (RESPONDENT) REVENUE BY : S H RI/MS. SONIA KUMAR , SR. D . R. ASSESSEE BY: SHRI SUNIL TALATI, A.R. DATE OF HEARING : 12 - 03 - 2 019 DATE OF PRONOUNCEMENT : 19 - 03 - 2 019 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THE INSTANT APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE DECISION OF LD. CIT(A) , GANDHINAGAR, AHMEDABAD IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER TO DISALLOW THE CLAIM OF DEDUCTION U/S. 80P OF THE ACT IN RESPECT OF INTEREST INCOME R ECEIVED FRO M THE AXIS BANK AND G UJCOMASOL LTD. OF RS. 7 , 57 , 971/ - AND ASSESSING THE SAME UNDER THE H E AD INCOME FROM OTHER S OURCES UNDER SECTION 56 OF THE ACT . I T A NO . 1675 / A HD/20 17 A S S ESSMENT YEAR 2014 - 15 I.T.A NO. 1675 /AHD/20 17 A.Y. 2014 - 15 PAGE NO SHRI PATAN TALUKA SAHAKARI KHARID VECHAN SANGH LTD. VS. IT O 2 2. THE FACT OF THE CASE IS THAT ASSESSEE FILED RETURN OF INCOME D ECLARING TOTAL INCOME AT RS. NIL AF TER CLAI MING DEDUCTION U/S. 80P OF RS. 15 , 15 , 343/ - ON 28 TH AUGUST, 2015. SUBSEQUENTLY, THE CASE WAS SELECTED UNDER SCRUTINY BY ISSUING OF NOTICE U/S . 143(2) OF THE AC T ON 28 TH AUGUST, 2014. DURING THE COURSE OF ASSESSMENT ON VERIFICATION OF THE DETAIL FILED, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS CLAIMED INTEREST INCOME ON FIXED DEPOSIT WITH AXIS BANK TO THE AMOUNT OF RS. 19 , 788/ - ON WHICH DEDUCTION U/S. 80P WAS CLAIMED. THE ASSESSING OFFICER HAS DISALLOWED THE CLAIM OF DEDUCTION U/S . 80P OF THE ACT ON THE AFORESAID INTEREST INCOME EARN ED FROM NATIONALIZED BANK ON T H E GROUND THAT INTEREST INCOME WAS NOT DERIVED FROM BUSINESS ACTIVITY OF THE ASSSE SSEE. THE ASSESSING OFFICER FURTHER NOTICED THAT ASSESSEE HAS RECEIVED INTEREST FROM G UJCOMASOL AMOUNTING TO RS. 7 , 38 , 183/ - ON WHICH ALSO CLAIMED DEDUCTION U/S. 80P OF THE AC T. THE ASSESSEE EXPLAINED THAT IT HAD PURCHASED FERTILIZER F R O M GUJCOMASOL AND THE SAME WAS SOLD FURTHER TO THE MEMBER OF ASSESSEE SOCIETY. THE ASSESSEE HAS FURTHER SUBMITTED AS PER BUSIN ESS PRACTICE AN AMOUNT IN ADVANCE HAS TO BE GIVEN TO THE GUJCOMASOL FOR PURCHASE OF FERTILIZER AND THE GUCOMASOL USE TO PROVIDE INTEREST ON SUCH ADVANCE AMOUNT GIVEN FOR PURCHASE OF FERTILIZERS. IN THE SIMILAR WAY, THE ASSSESSEE ALSO PROVIDE INTEREST TO ITS MEMBERS FOR THE ADVANCE AMOUNT RECEIVED FOR SELLING THE FERTILIZERS PURCHASED FROM THE GUJCOMASOL. D URING THE YEAR, THE ASSESSEE HAD PAID INTEREST ON BALANCE AMOUNT TO THE SOCIETY MEMBER TO THE AMOUNT OF RS. 6 , 28 , 292/ - AND AFTER REDUCING THE SAME FROM THE INTERE ST RECEIVED FROM G UJCOMASOL THE DIFFERENCE OF AMOUNT WAS ONLY RS. 1 , 09 , 191/ - . IN VIEW OF THE SE FAC TS, THE ASSESSEE HAS CONTENDED THAT INTERES T RECEIVED BY THE SOCIETY FROM G UJCOMASOL WAS NOT LIABLE TO TAX. THE ASSESSING OFFICER HAS NOT AGREED WITH THE SUBM ISSION OF TH E ASSESSEE AND I.T.A NO. 1675 /AHD/20 17 A.Y. 2014 - 15 PAGE NO SHRI PATAN TALUKA SAHAKARI KHARID VECHAN SANGH LTD. VS. IT O 3 DISALLOWED THE CLAIM OF DEDUCTION U/S. 80P OF THE ACT ON THE INTEREST AMOUNT RECEIVED FROM THE GUJCOMASOL AND TREATED THE SAME AS INCOME FROM OTHER SOURCES. 3. AGGRIEVED ASSESSEE HAS FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CI T(A) HAS SUSTAINED THE ADDITION MADE BY THE ASSESSING OFFICER. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, THE LD. COUNSEL HAS FURNISHED PAPER BOOK CONTAINING DETAIL OF SUBMISSION MADE BEFORE THE ASSESSING OFFICER AND LD. CIT(A) DURING THE COUR SE OF ASSESSMENT AND APPELLATE PROCEEDINGS . AS PER PAGE NO. 1 TO 8 OF THE PAPER BOOK, THE ASSESSEE HAS GIVEN DETAIL OF LEDGER ACCOUNT OF G UJCOMASOL AND OTHER MATERIALS WHICH DEMONSTRATE THAT ADVANCES WER E GIVEN FOR PURCHASE OF FERTILIZER TOWARDS BUSINESS ACTIVITIES OF THE ASSSESSEE FOR THE YEAR UNDER CONSIDERATION . THE ASSESSEE HAS ALSO FILED COPIES OF TRADING AND P & L A/C DEMONSTRATING THAT NATURE OF BUSINESS ACTIVITY OF THE ASSESSEE WAS PURCHASE OF FERTILIZER AND VARIOUS KINDS OF SEEDS FOR DISTRIBUTIO N TO THE MEMBERS OF THE SOCIETY. 4. WITH THE ASSISTANCE OF LD. REPRESENTATIVES, WE HAVE GONE THROUGH THE AFORESAID SUBMISSION CONTAINED IN THE PAPER BOOK FILED BY THE ASSESSEE AND IT IS OBSERVED THAT ASSESSEE HAS RECEIVED THE INTEREST AMOUNT O F RS. 7 , 38 , 183/ - ON THE ADVANCE PAYMENTS MADE TO G UJCOMASOL FOR PURCHASE OF FERTILIZERS . I T IS ALSO NOTICED THAT SIMILARLY ASSESSEE HAS ALSO PAID INTEREST ON BALANC E AMOUNT OF SOCIETY MEMBERS ON THE AMOUNT WHICH WAS RECEIVED FROM T H E SOCIETY MEMBER FOR SALE OF GOOD S OF THE SOCIETY . AFTER PERUSAL OF THE ABOVE UNDISPUTED MATERIAL FACTS, WE OB S ER V ED THAT A SSESSEE SOCIETY IS A MEMBER OF G UJCOMASOL FROM WHICH IT PURCHASE FERTILIZER AND EARN INTEREST INCOME ON THE I.T.A NO. 1675 /AHD/20 17 A.Y. 2014 - 15 PAGE NO SHRI PATAN TALUKA SAHAKARI KHARID VECHAN SANGH LTD. VS. IT O 4 ADVANCE AMOUNT GIVEN FOR THE PURCHASE OF FERTILIZER. IT I S ALSO NOTICED THAT DURING THE YEAR UNDER CONSIDERATION THE ASSE SS E E HAS ALSO PAID INTEREST ON BALANCE AMOUNT OF SEVA SAHKARI MANDALI OF RS. 6,28,292/ - , THEREFORE, DIFFERENT O F INTEREST INCOME OF RS. 1 , 09 , 191/ - WAS THE INCOME OF THE ASSESSEE WHICH IS ELIG IBLE FOR DEDUCTION U/S. 80P OF THE ACT. THE ABOVE FACTS DEMONSTRATE THAT THE AFORESAID INCOME OF THE ASSESSEE WAS ATTRIBUTABLE TO T H E BUSINESS ACTIVITIES OF THE ASSSESSEE ON WHIC H THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S. 80P OF THE ACT. THEREFORE , WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO ALLOW THE CLAIM OF DEDUCTION U/S. 80P AS DIRECTED ABOVE AFTER EXAMINATION AND VERIFICATION O F THE DETAILS TO BE FURNISHED BY T H E ASSESSEE. 5. REGARDING INTEREST INCOME EARNED FORM AXIS BANK TO THE AMOUNT OF RS. 19 , 788/ - , WE CONSIDER THAT THIS INTEREST INCOME EARNED FROM NATION ALIZED BANK ON SURPLUS FUND HAS NOT BEEN DERIVED FROM THE BU SINESS ACTIVITY OF THE ASSESSEE, T HEREFORE, WE UPHOLD THE DECISION OF LD. CIT(A) IN DISALLOWING THE CLAIM OF 8 0P DEDUCTION IN RESPECT OF INTEREST INCOME EARNED FROM AXIS BANK. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 6 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PR ONOUNCED IN THE OPEN C OURT ON 19 - 03 - 201 9 SD/ - SD/ - ( MADHUMITA ROY ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER I.T.A NO. 1675 /AHD/20 17 A.Y. 2014 - 15 PAGE NO SHRI PATAN TALUKA SAHAKARI KHARID VECHAN SANGH LTD. VS. IT O 5 AHMEDABAD : DATED 19 /03 /2019 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,