ITO, Aurangabad V. M/S `Subordinate Engineers association Co-op Credit Society Ltd., Aurangabad

ITA 1720/PUN/2012

• Counselvise Citation: 172024514 RSA 2012
• Duration Of Justice: 1 year(s) 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 21-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L PATHADE

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO. 1720/PN/2012 (ASSESSMENT YEAR 2009-10) ITO, WARD-1(1), AURANGABAD .. APPELLANT VS. M/S. SUBORDINATE ENGINEERS ASSOCIATION COOPERATIVE CREDIT SOCIETY LIMITED, SAHKAR JYOTI BUILDING, JUBLEE PARK ROAD, AURANGABAD. .. RESPONDENT PAN NO.AAAJM0841R APPELLANT BY : SHRI P.L. PATHADE RESPONDENT BY : SHRI SANKET JOSHI DATE OF HEARING : 31-10-2013 DATE OF PRONOUNCEMENT : 31-10-2013 ORDER PER R.S. PADVEKAR, JM : THIS APPEAL IS FILED BY THE REVENUE CHALLENGING THE IMPUGNED ORDER OF THE LD.CIT(A), AURANGABAD DATED 29-06-2012 FOR A.Y. 2009- 10. THE REVENUE HAS TAKEN THE FOLLOWING TWO GROUND S : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD.CIT(A) HAS ERRED IN COMING TO THE CONCLUSION THA T THE ASSESSEE HAD IMPLIEDLY CLAIMED DEDUCTION U/S.80P(2) (D) IN RESPECT OF INTEREST OF RS.20,55,631/- EARNED ON DEP OSITS WITH AURANGABAD DISTRICT CENTRAL CO-OP. BANK LTD. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD.CIT(A) HAS ERRED IN COMING TO THE CONCLUSION THA T THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION U/S.80P(2)(D) I N RESPECT OF THE INTEREST INCOME OF RS.20,55,631/-, DESPITE THE FACT THAT IT HAD FAILED TO MAKE ANY SPECIFIC CLAIM UNDER THE SAI D SECTION, AS MANDATED BY THE EXPRESS PROVISIONS OF SECTION 80A(5 ). 2. THE SOLITARY ISSUE IS WHETHER THE LD.CIT(A) JUST IFIED IN ALLOWING THE CLAIM OF THE ASSESSEE IN RESPECT OF THE INTERES T RECEIVED FROM 2 AURANGABAD DISTRICT CENTRAL COOPERATIVE BANK LTD. ( IN SHORT ADCCB LTD.) U/S.80P(2)(D) OF THE ACT. THE ASSESSEE IS A CREDIT COOPERATIVE SOCIETY WHICH IS ENGAGED IN PROVIDING CREDIT FACILI TIES TO ITS MEMBERS. THE MEMBERS OF THE ASSESSEE SOCIETY ARE SUBORDINATE ENGINEERS WORKING IN THE MAHARASHTRA STATE ELECTRICITY BOARD (MSEB). THE ASSESSEE HAS KEPT DEPOSIT TO THE EXTENT OF RS.1,77, 44,138/- WITH ADCCB LTD., AURANGABAD IN SAVINGS ACCOUNT. THE ASS ESSEE HAD RECEIVED INTEREST TO THE EXTENT OF RS.20,55,631/- F ROM ADCCB LTD. WHICH WAS CLAIMED BY THE ASSESSEE AS EXEMPT U/S.80P (2)(A)(I) OF THE ACT. THE AO DID NOT ACCEPT THE SAID CLAIM OF THE A SSESSEE BY GIVING THE REASON THAT THE ASSESSEE IS A CREDIT COOPERATIV E SOCIETY AND ITS BUSINESS IS TO PROVIDE CREDIT FACILITIES TO ITS MEM BERS AND EARNING INTEREST FROM KEEPING THE MONEY WITH ANOTHER BANK C ANNOT BE TREATED AS AN ACTIVITY OF THE BANK. IT APPEARS THAT THE AS SESSEE MADE ALTERNATE CLAIM U/S.80P(2)(D) BUT THE AO DECLINED T O ACCEPT THE SAID CLAIM ON THE REASON THAT NO SPECIFIC CLAIM U/S.80P( 2)(D) OF THE I.T. ACT HAS BEEN MADE BY THE ASSESSEE. THE AO FINALLY HELD THAT THE INTEREST RECEIVED FROM THE ADCCB LTD. CANNOT BE TRE ATED AS INTEREST RECEIVED FROM THE MEMBERS FOR PROVIDING CREDIT FACI LITIES AND THE SAME CANNOT BE ALLOWED AS DEDUCTION U/S. 80P(2)(A)( I) OF THE I.T. ACT. THE AO ALSO RELIED ON THE DECISION OF THE HONBLE S UPREME COURT IN THE CASE OF TOTAGHAR COOPERATIVE SOCIETY SALES LTD. VS. ITO REPORTED IN 322 ITR 283. THE AO FINALLY REJECTED THE CLAIM OF THE ASSESSEE IN RESPECT OF THE INTEREST RECEIVED FROM ADCCB LTD. TO THE EXTENT OF RS.20,55,631/-. THE ASSESSEE CHALLENGED THE SAID A DDITION BEFORE THE LD.CIT(A). LD.CIT(A) ALLOWED THE ASSESSEES CLAIM. NOW THE REVENUE IS IN APPEAL BEFORE US. 3 3. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD . IT IS NOT DISPUTED IN THIS CASE THAT THE ASSESSEE SOCIETY IS ELIGIBLE FOR DEDUCTION U/S.80P(2)(D) OF THE ACT IN RESPECT OF THE AMOUNT O F INTEREST OF RS.20,55,631/- WHICH HAS BEEN RECEIVED FROM ADCCB L TD. WHICH IS A COOPERATIVE BANK. EVEN IF FOR THE SAKE OF ARGUMENT , IF THE AO'S CONTENTION IS ACCEPTED THAT THE SAID INCOME MAY NOT CONSTITUTE THE INCOME FOR PROVIDING CREDIT FACILITIES TO ITS MEMBE RS U/S.80P(2)(A)(I) OF THE ACT BUT SECTION 80P(2)(D) IN CLEAR TERMS ALL OWS THE DEDUCTION OF ANY INCOME BY WAY OF INTEREST FROM ITS INVESTMENT W ITH ANY OTHER COOPERATIVE SOCIETY. THE AO IS ALSO NOT DISPUTING THE ALLOWABILITY. THE ONLY RESERVATION OF THE AO IS THAT NO SPECIFIC CLAIM IS MADE U/S. 80P(2)(D) OF THE ACT. AS PER DISCUSSION IN THE ASS ESSMENT ORDER, IT APPEARS THAT DURING THE COURSE OF ASSESSMENT PROCEE DINGS THE ASSESSEE HAS MADE THE CLAIM U/S. 80P(2)(D) IN RESPE CT OF THE INTEREST RECEIVED FROM ADCCB LTD. 4. SO FAR AS THE RELIANCE PLACED BY THE ASSESSING O FFICER ON THE DECISION OF TOTAGHAR COOPERATIVE SOCIETY SALES LTD. (SUPRA), IN OUR OPINION, THE SAID DECISION IS RENDERED INTO DIFFERE NT CONTEXT AS THE CLAIM U/S.80P(2) OF THE ACT WAS NOT BEFORE THE HON BLE SUPREME COURT. WE ACCORDINGLY UPHOLD THE ORDER OF THE LD.C IT(A) AND DISMISS THE GROUNDS TAKEN BY THE REVENUE. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. PRONOUNCED IN THE OPEN COURT AFTER CONCLUSION OF TH E HEARING, I.E. ON 31-10-2013. SD/- SD/- (G.S.PANNU) (R.S. PADVE KAR) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED : 31 ST OCTOBER 2013 SATISH 4 COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A), AURANGABAD 4. THE CIT, AURANGABAD 5. D.R. A BENCH, PUNE 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE