Appeal details
Counselvise Citation
[2018] 125 COUNSELVISE.COM (IT) 8067 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
11 month(s) 11 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
28-06-2018
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
SMC
Assessment Year
2014-2015
Appeal Filed On
17-07-2017
Judgement Text
, LH LHLH LH IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD LOZJH LOZJH LOZJH LOZJH OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN] YS[KK LNL; ,OA ] YS[KK LNL; ,OA ] YS[KK LNL; ,OA ] YS[KK LNL; ,OA EK/KQFERK JKW; EK/KQFERK JKW; EK/KQFERK JKW; EK/KQFERK JKW;] U;KF;D LNL; ] U;KF;D LNL; ] U;KF;D LNL; ] U;KF;D LNL; DS LE{KA DS LE{KA DS LE{KA DS LE{KA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER AND SMT MADHUMITA ROY, JUDICIAL MEMBER ./ I.T.A. NO.1746/AHD/2017 ( / ASSESSMENT YEAR : 2014-15) THE POSUN CO-OP CREDIT SOC. LTD., PRATAP ROAD, RAOPURA, BARODA / VS. ITO, WARD 3(1)(2), BARODA. ./ ./ PAN/GIR NO. : AAAAP 0501 A ./ I.T.A. NO.2611/AHD/2017 ( / ASSESSMENT YEAR : 2014-15) THE POSUN CREDIT CO-OP SOC. LTD., 1 ST FLOOR, LILAWATI CENTRE M. G. ROAD, STATION RAOD, ANAND 388 001 / VS. ITO, WARD-4 ANAND. ./ ./ PAN/GIR NO. : AAAAP 0756 D ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI S. N. DIVATIA, A.R. / RESPONDENT BY : SHRI PRASOON KABRA, SR. D.R. / DATE OF HEARING 26/06/2018 !'# / DATE OF PRONOUNCEMENT 28/06/2018 $% / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEALS HAVE BEEN FILED AT THE INSTAN CE OF THE ASSESSEE AGAINST THE APPELLATE ORDER OF THE COMMISSIONER OF INCOME ITA NOS.1746 & 2611/AHD/20 17 POSUN CO-OP CREDIT SOC. L TD. VS. ITO ASST.YEAR 2014-15 - 2 - TAX(APPEALS)-3 & 4, VADODARA [CIT(A) IN SHORT] VID E APPEALS NOS. CAB/3-10168/2016-17 & CAB/4-490/2016-17 DATED 15.05 .2017 & 30.08.2017 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S.143(3) OF TH E INCOME TAX ACT, 1961 (HERE-IN-AFTER REFERRED TO AS 'THE ACT') DATED 27.06.2016 & 28.10.2016 RELEVANT TO ASSESSMENT YEAR (AY) 2014-15. SINCE THE COMMON ISSUE IS ARISING IN THE APPEALS FI LED BY BOTH THE ASSESSEE, THEREFORE, BOTH THE APPEALS ARE HEARD TOG ETHER AND ARE BEING DISPOSED OF BY WAY OF A CONSOLIDATED ORDER FOR THE SAKE OF BREVITY. 2. FIRST WE TAKE UP GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN ITA NO.1746/AHD/2017 ARE AS UNDER:- 1. THE LEARNED C1T (A) HAS ERRED IN DISALLOWING DEDUCTION U/S. 80P AND MADE ADDITION AMOUNTING TO RS.29,01,677/-. 2. ASSESSEE IS IN THE BUSINESS OF PROVIDING CREDI T FACILITIES TO ITS MEMBERS AND IS COVERED UNDER SECTION 80P AND HAS RIGHTLY CL AIMED DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE I.T. ACT, 1961. 3. THE ASSESSEE PRAY THAT DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT IS ELIGIBLE, HENCE ADDITION OF RS.29,01,677/- MADE BY LD.AO IS UNWARRANTED AND BAD IN LAW AND THEREFORE BE DELETED . YOUR APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY OF THE GROUNDS OF APPEAL MENTIONED ABOVE, EITHER AT OR BEFORE THE TIM E OF HEARING. 3. NOW WE TAKE UP GROUNDS OF APPEAL RAISED BY THE A SSESSEE IN ITA NO.2611/AHD/2017 ARE AS UNDER: 1.1 THE ORDER PASSED U/S.250 ON 30.08.2017 FOR A.Y . 2014-15 BY CLT(A)-4, VADODARA UPHOLDING THE DISALLOWANCE OF DEDUCTION OF RS.23,30,678/- U/S.80P(2)(A)(I) IN RESPECT OF INTEREST INCOME FROM NATIONALIZED BANK IS WHOLLY ILLEGAL, UNLAWFUL AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. ITA NOS.1746 & 2611/AHD/20 17 POSUN CO-OP CREDIT SOC. L TD. VS. ITO ASST.YEAR 2014-15 - 3 - 1.2 THE LD. CIT(A) HAS GRIEVOUSLY ERRED IN LAW AN D OR ON FACTS IN NOT CONSIDERING FULLY AND PROPERLY THE SUBMISSIONS MADE AND EVIDENCE PRODUCED BY THE APPELLANT WITH REGARD TO THE IMPUGN ED DISALLOWANCE 2.1 THE LD. CLT(A) HAS GRIEVOUSLY ERRED IN LAW AND ON FACTS IN CONFIRMING THE DISALLOWANCE OF DEDUCTION OF RS.23,30,678/-U/S. 80P(2)(A)(I) IN RESPECT OF INTEREST INCOME FROM NATIONALIZED BANK, THOUGH THE SAME WAS NOT EARNED OUT OF INVESTMENT OF SURPLUS FUND AND TH E FACTS OF THE CASE OF SBI CREDIT SOCIETY WERE DISTINGUISHABLE. 2.2 THAT IN THE FACTS AND CIRCUMSTANCES OF THE CAS E AS WELL AS IN LAW, THE LD. CIT(A) OUGHT NOT TO HAVE UPHELD THE DISALLOWANCE OF DEDUCTION OF RS.23,30,678/- U/S.80P(2)(A)(I) IN RESPECT OF INTER EST INCOME FROM NATIONALIZED BANK. 3.1 THE LD.CIT(A) HAS ERRED IN LAW AND ON FACTS I N UPHOLDING THE DISALLOWANCE OF GROSS INTEREST INCOME INSTEAD OF AL LOWING PRO-RATA EXPENSES AND RECOMPUTING THE ENTIRE TOTAL INCOME IN CLUDING THE DEDUCTION U/S.80P(2)(A)(I). IT IS, THEREFORE, PRAYED THAT THE DISAL LOWANCE OF DEDUCTION OF RS.23,30,678/- U/S.80P(2)(A)(I) UPHELD BY THE CIT(A) MAY KINDLY BE DELETED. 4. THE SOLITARY ISSUE INVOLVED IN THE GROUNDS OF AP PEAL RELATES TO WHETHER INTEREST INCOME EARNED ON FIXED DEPOSITS WI TH THE NATIONALIZED BANK WOULD QUALIFY FOR DEDUCTION UNDER SECTION 80P( 2)(A)(I) OF THE INCOME TAX ACT. 5. AT THE OUTSET, THE LEARNED COUNSEL FOR THE ASSE SSEE FAIRLY CONCEDED THAT ISSUE IN DISPUTE IS SQUARELY COVERED AGAINST T HE ASSESSEE BY THE DECISION OF THE HON'BLE JURISDICTIONAL HIGH COURT I N THE CASE OF STATE BANK OF INDIA VS. CIT, 389 ITR 578 WHEREIN HON'BLE COURT HELD THAT INTEREST EARNED FROM THE INVESTMENT MADE IN ANY BAN K IS NOT DEDUCTIBLE ITA NOS.1746 & 2611/AHD/20 17 POSUN CO-OP CREDIT SOC. L TD. VS. ITO ASST.YEAR 2014-15 - 4 - UNDER SECTION 80P(2)(A)(I) OF THE ACT. IN THIS VIEW OF THE MATTER, WE DISMISS THE APPEAL OF THE ASSESSEE. HOWEVER, WE DIR ECT THE AO TO EXCLUDE THE AMOUNT OF NET INTEREST INCOME FROM THE DEDUCTIO N CLAIMED U/S 80P(2)(A)(I) OF THE ACT. THUS THE AO WILL ALLOW THE EXPENSES INCURRED BY THE ASSESSEE IN THE EARNING OF SUCH INTEREST INCOME NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT. IN OTHER WORDS, THE LD.AO HAS TO DETERMINE THE NET INTEREST INCOME EARNED BY THE ASSESSEE ON SUCH INVESTMENT WITH THE BANK, A ND ONLY AFTER THAT NET INTEREST INCOME HAS TO BE EXCLUDED FROM THE ADMISSI BILITY OF DEDUCTION UNDER SECTION 80P(2) OF THE ACT. HENCE, GROUNDS OF APPEAL FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT, THE BOTH THE APPEALS OF THE ASSE SSEE ARE PARTLY ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON 28/06/2018 SD/- SD/- E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; E/KQFERK JKW; OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LN L; L; L; L; (MADHUMITA ROY) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 28/06/2018 PRITI YADAV, SR.PS ITA NOS.1746 & 2611/AHD/20 17 POSUN CO-OP CREDIT SOC. L TD. VS. ITO ASST.YEAR 2014-15 - 5 - !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. & '( ) / CONCERNED CIT 4. ) () / THE CIT(A)-3 & 4, VADODARA. 5. ,-. //'( , '(# , 12$&$ / DR, ITAT, AHMEDABAD 6. .34 5 / GUARD FILE. % & / BY ORDER, , / //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 27/06/2018 . 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 27/06/2018. 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S . 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER
