ACIT, Circle-3,Asansol, Asansol V. M/S. Purulia Central Co-Operative Bank Ltd., Purulia

ITA 1885/KOL/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4718 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2016
• Appeal Filed By: Department
• Bench Allotted: SMC
• Next Hearing Date: 21-07-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 08-10-2014
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA PRASAD
• Assessee Lawyers: M GOENKA
• Section: 147; 148; 56

Judgement Text

I.T.A. NO. 1885/KOL./2014 ASSESSMENT YEAR: 2005-2006 & C.O. NO.102/KOL/2014 (IN ITA NO. 1885/KOL/2014) ASSESSMENT YEAR: 2005-2006 PAGE 1 OF 9 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA A(SMC) BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A. NO. 1885 /KOL/ 2014 ASSESSMENT YEAR: 2005-2006 ASSISTANT COMMISSIONER OF INCOME TAX,.............. ........................APPELLANT CIRCLE-3, ASANSOL, PARMAR BUILDING, 54, G.T. ROAD (WEST), ASANSOL-713 304 -VS.- M/S. PURULIA CENTRAL COOPERATIVE BANK LIMITED,..... .................RESPONDENT RANCHI ROAD, PURULIA-723 101 [PAN: AAAJP 0148 E] -AND- C.O. NO. 102/KOL/2014 (IN ITA NO. 1885/KOL/2014) ASSESSMENT YEAR: 2005-2006 M/S. PURULIA CENTRAL COOPERATIVE BANK LIMITED,.CR OSS OBJECTOR RANCHI ROAD, PURULIA-723 101 [PAN: AAAJP 0148 E] -VS.- ASSISTANT COMMISSIONER OF INCOME TAX,.............. ........................RESPONDENT CIRCLE-3, ASANSOL, PARMAR BUILDING, 54, G.T. ROAD (WEST), ASANSOL-713 304 APPEARANCES BY: SHRI RAJENDRA PRASAD, JCIT, D.R., FOR THE DEPARTMENT SHRI M. GOENKA, A.R., FOR THE ASSESSEE DATE OF CONCLUDING THE HEARING : JULY 28, 2016 DATE OF PRONOUNCING THE ORDER : AUGUST 05, 2016 O R D E R THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), ASANSOL D ATED 22.08.2014 AND I.T.A. NO. 1885/KOL./2014 ASSESSMENT YEAR: 2005-2006 & C.O. NO.102/KOL/2014 (IN ITA NO. 1885/KOL/2014) ASSESSMENT YEAR: 2005-2006 PAGE 2 OF 9 THE SAME IS BEING DISPOSED OF ALONG WITH THE CROSS OBJECTION FILED BY THE ASSESSEE BEING C.O. NO. 102/KOL/2014. 2. THE SOLITARY ISSUE INVOLVED IN THE APPEAL OF THE REVENUE RELATES TO THE DELETION BY THE LD. CIT(APPEALS) OF THE ADDITIO N OF RS.35,37,804/- MADE BY THE ASSESSING OFFICER BY DISALLOWING THE CL AIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 80P(2) ON ACCOUNT OF INTERE ST INCOME BY TREATING THE SAME AS INCOME FROM OTHER SOURCES. 3. THE ASSESSEE IN THE PRESENT CASE IS A COOPERATIV E SOCIETY, WHICH IS ENGAGED IN BANKING BUSINESS. DURING THE COURSE OF R E-ASSESSMENT PROCEEDINGS UNDER SECTION 147 READ WITH SECTION 148 , THE ASSESSEE WAS REQUIRED BY THE ASSESSING OFFICER TO EXPLAIN AS TO WHY INTEREST INCOME OF RS.1,10,44,088/- EARNED FROM INVESTMENT AND OTHER D EPOSITS SHOULD NOT BE CONSIDERED AS INCOME FROM OTHER SOURCES NOT ELIG IBLE FOR DEDUCTION UNDER SECTION 80P(2). IN REPLY, THE FOLLOWING SUBMI SSIONS WERE MADE BY THE ASSESSEE IN WRITING:- (I) THAT IN THE ABOVE CASE HON'BLE SUPREME COURT H AS DECIDED THAT INTEREST FROM SURPLUS AND INVESTED IN SHARES, SHORT TERM DEPOSIT WILL BE TREATED AS INCOME FROM O THER SOURCES AND TAXABLE UNDER SECTION 56 AND BENEFIT OF SECTION 80P(2) OF THE I.T. ACT IS NOT AVAILABLE. (II) THAT ABOVE SOCIETY'S BUSINESS REFERRED IN ABOV E SUPREME COURT JUDGMENT WAS MARKETING OF AGRICULTURAL PRODUC E OF ITS MEMBERS AND GIVING CREDIT TO ITS MEMBERS. BUT IT WA S NOT CARRYING BANKING BUSINESS. (III) THAT THE ENTIRE INCOME OF THE ASSESSEE FROM I S INCOME FROM BANKING BUSINESS AND IS EXEMPT UNDER SECTION 8 0P(2) AS THE ABOVE RATIO OF JUDGMENT OF HON'BLE SUPREME C OURT IS NOT APPLICABLE AS THE ABOVE CO-OPERATIVE SOCIETY WA S A MARKETING AND CREDIT SOCIETY AND NOT BANKING. (IV) THAT IN THE CASE OF THE ASSESSEE, THE ASSESSEE IS A CO- OPERATIVE BANK A ND ITS ONLY BUSINESS IS BANKING TH ERE CAN I.T.A. NO. 1885/KOL./2014 ASSESSMENT YEAR: 2005-2006 & C.O. NO.102/KOL/2014 (IN ITA NO. 1885/KOL/2014) ASSESSMENT YEAR: 2005-2006 PAGE 3 OF 9 NEVER BE ANY INCOME FROM OTHER SOURCES DEFINED BY B ANKING REGULATION ACT 1949 AS DEFINITION OF BANKING GIVEN IN THE ACT. (V) IN SUPPORT OF THE ABOVE, THE ASSESSEE RELIED UP ON THE DECISION OF SUPREME COURT IN THE CASE KARNATAKA STA TE CO- OPERATIVE APEX BANK, [251 ITR 194], MEHSANA DISTRIC T CENTRAL CO-OPERATIVE BANK LTD. VS. ITO AND ANOTHER OF HON'BLE HIGH COURT H.P. IN WHICH IT WAS HELD THAT I NTEREST EARNED BY A CO-OPERATIVE BANK ON FIXED DEPOSITS WIT H ANOTHER CO-OPERATIVE BANK IN COMPLIER OF STATE CO-O PERATIVE SOCIETY ACT IS INCOME FROM BANKING BUSINESS WHICH I S ALLOWABLE U/S 80P OF THE I.T. ACT. (VI) THAT THE FOLLOWING DETAILS ARE GIVEN BELOW FOR YOUR KIND PERUSAL: INTEREST INCOME FROM INVESTMENT RS.110,44,088.39 INCOME FROM OTHER RECEIPTS RS. 31,58,574.80 RS.142,02,663.19 INTEREST PAID ON DEPOSITS FOR MAKING ABOVE INVESTMENT 37460093 X 243780454 ______________________ 352547423 RS.2,59,03,007.00 LOSS FROM INVESTMENT FROM DEPOSITS AND OTHER INVESTMENT RS.1,17,00,344.00 BESIDES ABOVE, MORE THAN 50% OF THE ADMINISTRATIVE AND OTHER EXPENSES ARE INCURRED FOR OPERATING, COLLECTI NG AND OPERATION OF S.B. A/C., CURRENT A/C, RD A/C AND OTH ER TERM DEPOSITS. (VII) THAT DETAILS OF INTEREST EARNED FOR LOANS AND INVESTMENT AND INTEREST PAID ON BORROWING AND DEPOSITS IS ATTA CHED HEREWITH: INTEREST ON LOAN RS.468,01,046.00 I.T.A. NO. 1885/KOL./2014 ASSESSMENT YEAR: 2005-2006 & C.O. NO.102/KOL/2014 (IN ITA NO. 1885/KOL/2014) ASSESSMENT YEAR: 2005-2006 PAGE 4 OF 9 INTEREST ON INVESTMENT RS.110,44,088.00 TOTAL INTEREST INCOME RS.5,78,45,134.00 LESS: INTEREST ON BORROWINGS RS.80,56,444.00 INTEREST ON DEPOSITS RS.374,60,093.00 TOTAL INTEREST EXPENDITURE RS.4,55,16,537.00 SURPLUS INTEREST INCOME RS.1,23,28,597.00 THE ABOVE SUBMISSIONS MADE BY THE ASSESSEE WERE NOT FOUND TO BE FULLY ACCEPTABLE BY THE ASSESSING OFFICER. ACCORDING TO H IM, THE TOTAL INVESTMENT MADE BY THE ASSESSEE AS ON 31.03.2005 WA S RS.20.77 CRORES AS AGAINST THE MAXIMUM STATUTORY RESERVE REQUIRED TO B E CREATED BY THE ASSESSEE AS ON THAT DATE AT RS.14.10 CRORES. HE, TH EREFORE, HELD THAT THE SURPLUS INVESTMENT OF RS.6.67 CRORES MADE BY THE AS SESSEE WAS NOT REQUIRED TO BE MADE FOR THE PURPOSE OF ITS BANKING BUSINESS AND THE INTEREST EARNED THEREON WAS NOT ELIGIBLE FOR DEDUCT ION UNDER SECTION 80P BEING IN THE NATURE OF INCOME FROM OTHER SOURCES. H E ACCORDINGLY WORKED OUT SUCH INTEREST ON PROPORTIONATE BASIS AT RS.35,3 7,804/- AND DISALLOWED THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTI ON 80P TO THAT EXTENT IN THE ASSESSMENT COMPLETED UNDER SECTION 143(3)/14 7 VIDE AN ORDER DATED 13.02.2013. 4. AGAINST THE ORDER PASSED BY THE ASSESSING OFFICE R UNDER SECTION 143(3)/147, AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(APPEALS) AND AFTER CONSIDERING THE SUBMISSIONS MADE BY THE ASSESSEE AND THE VARIOUS JUDICIAL PRONOUNCEMENTS CITED IN SU PPORT, THE LD. CIT(APPEALS) DELETED THE ADDITION MADE BY THE ASSES SING OFFICER BY WAY OF DISALLOWANCE OF ASSESSEES CLAIM FOR DEDUCTION U NDER SECTION 80P TO THE EXTENT OF RS.35,37,804/- FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NOS. 9 & 10 OF HIS IMPUGNED ORDER:- I.T.A. NO. 1885/KOL./2014 ASSESSMENT YEAR: 2005-2006 & C.O. NO.102/KOL/2014 (IN ITA NO. 1885/KOL/2014) ASSESSMENT YEAR: 2005-2006 PAGE 5 OF 9 9. BEFORE PROCEEDING FURTHER THE EXTRACTS OF DECIS ION IN ITA NO 137/KOL/2008 OF ITAT 'C' BENCH, KOLKATA IS REPRODUC ED BELOW(ASPECTS NOT CONNECTED WITH THE CASE ARE STRUC K OFF AND RELEVANT ASPECTS ARE GIVEN IN BOLD): 2. THE ASSESSEE, A CO-OPERATIVE SOCIETY, IN THE REL EVANT ASSESSMENT YEAR, WAS ENGAGED IN THE BANKING ACTIVIT IES PROVIDING CREDIT FACILITIES TO ITS MEMBERS. IT HAD FILED ITS RETURN OF INCOME SHOWING TOTAL INCOME AT 'NIL' AFTER CLAIM ING DEDUCTION U/S. 80P OF THE INCOME TAX ACT. THE ASSES SING OFFICER EXAMINED THE ISSUE AS TO WHETHER THE INCOME DERIVED FROM INTEREST ON GOVERNMENT SECURITIES AND FROM BANKS CO ULD BE SAID TO BE INCOME DERIVED BY THE ASSESSEE FROM THE BUSIN ESS OF BANKING WITHIN THE MEANING OF SECTION 80P TO QUALIF Y FOR EXEMPTION. HE OBSERVED THAT THE CO-OPERATIVE BANK W AS LEGALLY OBLIGED TO PLACE CERTAIN GOVERNMENT SECURITIES WITH SBI/RBI AND THESE SECURITIES COULD NOT BE WITHDRAWN BY THE SAID BANK WITHOUT ANY SPECIAL CIRCUMSTANCES. AFTER CONSIDERIN G THE DECISIONS OF HON'BLE SUPREME COURT IN THE CASE OF M ADHYA PRADESH CO-OPERATIVE BANK LTD. VS. ACIT [1996] 218 ITR 438 (SC) AND IN THE CASE OF CIT VS. KARNATAKA STATE CO- OPERATIVE APEX BANK [2001] 251 ITR 194 (SC) AND ALSO AFTER CO NSIDERING THE PROVISIONS OF SECTION 24 OF THE BANKING REGULAT ION ACT, THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT AS PE R SECTION 24 OF THE SAID ACT THE MAXIMUM LIMIT HAD BEEN FIXED AT 40% OF THE TOTAL DEMAND AND TIME LIABILITIES AND, THEREFORE, T HE NET PROFIT EARNED BY INVESTING THE AMOUNT, WHICH IS IN EXCESS OF 40% WAS NOT ELIGIBLE FOR DEDUCTION U/ S. 80P. HE ALSO OBSER VED THAT TOTAL INVESTMENT REQUIRED TO BE MADE IN SLR AND NON-SLR I S WITHIN THE AMBIT OF SECTION 24 OF BANKING REGULATION ACT. AFTER CONSIDERING THE DETAILS OF INVESTMENT MADE BY THE A SSESSEE, HE DETERMINED THE INCOME AT RS.1,55,46,560/-. BEFORE L D. CIT(A), ASSESSEE HAD ONLY ASSAILED THE FINDING IN REGARD TO TAXABLE INCOME DETERMINED AT RS.L,55,46,560/ - OUT OF INTER EST RELATABLE TO EXCESS INVESTMENT OF RS.1,55,46,560/-. BEFORE LD . CIT(A), IT WAS FURTHER POINTED OUT THAT NOWHERE ASSESSING OFFI CER HAD DEFINED SLR AND NON-SLR NOR HE HAD GIVEN A BREAK-UP OF THIS INVESTMENT. THEREFORE, THE VERY PREMISE THAT ASSESS EE BANK HAD MAINTAINED IN CASH, GOLD OR UNENCUMBERED APPROVED S ECURITIES AN AMOUNT MORE THAN 40% OF ITS TOTAL DEMAND AND TIM E LIABILITIES ITSELF WAS FACTUALLY INCORRECT. FURTHER , IT WAS POINTED OUT THAT EVEN IN THE CIRCUMSTANCES, WHERE THE INVES TMENT IN SLR EXCEEDED 40% OUT OF THE DEMAND AND TIME LIABILI TIES, THE DEDUCTION U/S. 80P(2)(A)(I) OF THE INCOME TAX ACT C OULD NOT BE DENIED IN RESPECT OF THAT PART OF NET INTEREST WHIC H WAS ATTRIBUTABLE TO INVESTMENTS OTHERWISE THAN IN CONFO RMITY WITH SECTION 24 OF THE BANKING REGULATION ACT. THE ASSES SEE RELIED ON THE FOLLOWING DECISIONS TO SUBMIT THAT ASSESSEE BANK WAS ENTITLED TO CLAIM DEDUCTION U/S. 80P(2)(A)(A)(I) IN RESPECT OF INCOME EARNED FROM UTILIZATION OF ITS VOLUNTARY RES ERVES OTHER THAN STATUTORY RESERVES PROVIDED THAT THE INCOME DE RIVED BY THE I.T.A. NO. 1885/KOL./2014 ASSESSMENT YEAR: 2005-2006 & C.O. NO.102/KOL/2014 (IN ITA NO. 1885/KOL/2014) ASSESSMENT YEAR: 2005-2006 PAGE 6 OF 9 ASSESSEE FROM THE INVESTMENT OF ITS VOLUNTARY RESER VES WAS UTILISED BY IT IN THE COURSE OF ORDINARY BANKING BU SINESS :- (I) MEHSANA DISTRICT CENTRAL CO-OPERATIVE BANK LTD. VS.- I.T.O. [2001]251 ITR 522 (SC); (II) GUJARAT STATE CO-OPERATIVE BANK LTD. VS. CIT [ 2001] 251 ITR 522 (SC); (III) BURDWAN CENTRAL CO-OPERATIVE BANK LTD.; (IV) FARUKHABAD GRAMIN BANK; (V) DURGAPUR STEEL PEOPLES' CO-OPERATIVE BANK LTD.; (VI) PASCHIM BANGA GRAMIN BANK. LD. CIT(A) DELETED THE ADDITION BY OBSERVING AS UND ER :- 'AS PER THE BR ACT, A CO-OPERATIVE BANK WAS OBLIGED TO MAINTAIN IN CASH, GOLD OR UNENCUMBERED APPROVED SECURITIES AN A MOUNT WHICH SHOULD NOT BE AT THE CLOSE OF THE BUSINESS OF ANY D AY LESS THAN 25% OR SUCH OTHER PERCENTAGE NOT EXCEEDING 40% OF TOTAL OF ITS DEMAND AND TIME LIABILITIES. THE AO COMBINED BOTH THE INVESTME NTS (IN STATUTORY AND NON-STATUTORY RESERVES WHICH HE MENTIONED AS SL R AND NON-SLR IN THE IMPUGNED ORDER) TO COMPUTE THE PERCENTAGE. IN F ACT, THE INVESTMENT IN THE STATUTORY RESERVES WAS VERY MUCH WITHIN THE LIMITS LAID DOWN IN THE BR ACT. IT HAS TO BE EMPHASISED TH AT SUCH LIMITS ARE NOT FIXED IN TILE BR ACT OR THE CIRCULARS OF THE RB I IN RESPECT OF ANYONE PARTICULAR DAY. THE EXACT STIPULATIONS TO BE COMPLI ED BY THE CO- OPERATIVE BANKS WITH REGARD TO THE CASH AND STATUTO RY RESERVES ARE AS UNDER: CASH RESERVE RATIO(CRR): IN TERMS OF SECTION 18 OF THE BANKING REGULATION AC T (B. R. ACT) 1949 (AS APPLICABLE TO CO-OPERATIVE SOCIETIES) EVERY CO- OPERATIVE BANK IS REQUIRED TO MAINTAIN ON A DAILY BASIS CASH RESERVE, THE AMOUNT OF WHICH SHALL NOT BE LESS THAN 3% OF ITS DEMAND AND T IME LIABILITIES (DTL) AS OBTAINING ON THE LAST FRIDAY OF THE SECOND PRECEDING FORTNIGHT. STATUTORY LIQUIDITY RATIO (SLR): IN TERMS OF SECTION 24(2AXA) OF THE BANKING REGULAT ION ACT (BR ACT) 1949 (AS APPLICABLE TO CO-OPERATIVE SOCIETIES) EVER Y CO-OPERATIVE BANK IS REQUIRED TO MAINTAIN ON A DAILY BASIS LIQUID ASS ETS, THE AMOUNT OF WHICH SHALL NOT BE LESS THAT 25% OR SUCH OTHER PERC ENTAGE NOT EXCEEDING 40%(AS MAY BE NOTIFIED), OF ITS DEMAND AN D TIME LIABILITIES AS OBTAINING ON THE LAST FRIDAY OF THE SECOND PRECE DING FORTNIGHT. ' 3. LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE OR DER OF LD. CIT(A) AND ON THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF TOTGARS' COOPERATIVE SALE SOCIETY LTD. VS. ITO, KARNATAKA [2 010] 188 TAXMAN I.T.A. NO. 1885/KOL./2014 ASSESSMENT YEAR: 2005-2006 & C.O. NO.102/KOL/2014 (IN ITA NO. 1885/KOL/2014) ASSESSMENT YEAR: 2005-2006 PAGE 7 OF 9 282 (SC) WHEREIN IT WAS HELD THAT INTEREST EARNED O N FUNDS WHICH WERE NOT REQUIRED FOR BUSINESS PURPOSES, AT THE GIVEN PO INT OF TIME, WAS NOT ELIGIBLE FOR DEDUCTION U/S. 80P, AS SUCH, INTEREST INCOME FELL IN THE CATEGORY OF OTHER INCOME TAXABLE U/S. 56 OF THE INC OME TAX ACT. HOWEVER, IN THE PRESENT CASE ASSESSING OFFICER HAS NOT GIVEN ANY SUCH FINDING BUT HAS PROCEEDED ON THE PREMISE THAT TOTAL INVESTMENT EXCEEDED 40% LIMIT LAID DOWN U/S. 24 OF THE 'BANKIN G REGULATION ACT. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE P ARTIES AND HAVE PERUSED THE RECORDS OF THE CASE. THE ASSESSING OFFI CER HAD PROCEEDED ON THE PREMISE THAT TOTAL INVESTMENT REQUIRED TO BE MADE IN SLR AND NON-SLR WAS WITHIN THE AMBIT OF SECTION 24 OF THE B ANKING REGULATION ACT. HOWEVER, IT WAS NOT DISPUTED THAT THE INVESTME NTS WERE MADE IN THE NORMAL COURSE OF BANKING BUSINESS AND THEREFORE , IN VIEW OF THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF ME HSANA DISTRICT CENTRAL CO-OPERATIVE BANK LTD. (SUPRA), THE ASSESSE E WAS ENTITLED FOR DEDUCTION U/S. 80P WHEREIN IT WAS HELD AS UNDER :- '(I) THAT INTEREST ON INVESTMENTS FROM STATUTORY RE SERVES WAS ELIGIBLE FOR DEDUCTION UNDER SECTION 80P(2)(A)(I). WHETHER I NCOME DERIVED BY THE ASSESSEE CO-OPERATIVE BANK FROM THE INVESTMENT OF ITS VOLUNTARY RESERVES OTHER THAN STATUTORY RESERVES IS EXEMPT UN DER SECTION 80P(2)(A)(I) DEPENDED UPON WHETHER THE VOLUNTARY RE SERVES WERE UTILIZED IN THE COURSE OF ITS ORDINARY BANKING BUSI NESS. IN VIEW OF THE DECISION OF HONBLE SUPREME COURT (SU PRA), WE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF LD. CIT(A) AND CONFIRM THE SAME. 10. THE ABOVE ORDER OF HON. ITAT R.W ORDER IN MEHSA NA DISTRICT CENTRAL CO-OPERATIVE BANK LTD. VS. I.T.O.[2001] 251 ITR 522 (SC) PROVIDES CLARITY ON TWO ASPECTS. THEY ARE - A. THE INCOME FROM EVEN NON-STATUTORY RESERVES IS I NCOME FROM BUSINESS SINCE THE FUNDS WERE UTILISED IN ORDI NARY COURSE OF BUSINESS, B. THAT INCOME FROM BANKING BUSINESS IS ELIGIBLE FO R DEDUCTION UNDER SECTION 80P. IN VIEW OF THE ABOVE, I DIRECT ASSESSING OFFICER TO DELETE THE ADDITION OF RS.35,37,804/- MADE IN THE ASSESSMENT O RDER. THIS DECISION IS AFTER CONSIDERING THE FACT THAT UNLIKE IN THE CASE OF BANKURA DISTRICT CENTRAL CO-OPERATIVE BANK, HERE TH E ASSESSING OFFICER HAS GIVEN A COMPUTATION OF SLR AND NON-SLR AMOUNTS, BUT THE FACTS OTHERWISE, AS STATED ABOVE IN A AND B , NULLIFIES THE BENEFIT OF THE FINDING. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE REVENUE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. I.T.A. NO. 1885/KOL./2014 ASSESSMENT YEAR: 2005-2006 & C.O. NO.102/KOL/2014 (IN ITA NO. 1885/KOL/2014) ASSESSMENT YEAR: 2005-2006 PAGE 8 OF 9 5. I HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS SUBMITTED BY THE LD. COUNSEL FOR THE ASSESSEE, THE DECISION OF THE HONBLE SUPREME C OURT IN THE CASE OF TOTGARS COOPERATIVE CREDIT SOCIETY LIMITED [322 IT R 283] IS NOT APPLICABLE IN THE PRESENT CASE AS THE ASSESSEE IN T HE SAID CASE WAS ENGAGED IN THE BUSINESS OF PROVIDING CREDIT FACILIT IES TO ITS MEMBERS AS WELL AS PROVIDING MARKETS FOR THE AGRICULTURAL PROD UCTS OF ITS MEMBERS, WHILE THE ASSESSEE IN THE PRESENT CASE IS ENGAGED I N BANKING BUSINESS. HE HAS RELIED ON THE DECISION OF THE HONBLE SUPREME C OURT IN THE CASE OF MEHSANA DISTRICT CENTRAL COOPERATIVE BANK LIMITED, WHEREIN IT WAS HELD THAT WHETHER INCOME DERIVED BY THE ASSESSEE COOPERA TIVE BANK FROM INVESTMENT OF ITS VOLUNTARY RESERVES OTHER THAN STA TUTORY RESERVES IS EXEMPT UNDER SECTION 80P(2)(A)(I) DEPENDS UPON WHET HER THE VOLUNTARY RESERVES WERE UTILIZED BY THE SOCIETY IN THE COURSE OF ITS ORDINARY BANKING BUSINESS. 6. THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED T HAT THE RELEVANT INVESTMENT IN THE PRESENT CASE WAS MADE BY THE ASSE SSEE FROM REFUND GENERATED FROM BANKING BUSINESS AND THE SAID INVEST MENT WAS ALSO MADE BY THE ASSESSEE IN THE COURSE OF ITS ORDINARY BANKI NG BUSINESS. HOWEVER, AS RIGHTLY POINTED OUT BY THE LD. D.R., THERE IS NO FINDING GIVEN EITHER BY THE ASSESSING OFFICER OR EVEN BY THE LD. CIT(APPEAL S) ON THIS ASPECT OF THE MATTER. EVEN RELEVANT BALANCE-SHEET AND PROFIT & LO SS ACCOUNT OF THE ASSESSEE IS NOT PLACED ON RECORD BEFORE ME TO VERIF Y THIS ASPECT. IN MY OPINION, THIS ASPECT, WHICH IS CRUCIAL TO DECIDE TH E ISSUE INVOLVED IN THE PRESENT APPEAL, REQUIRES VERIFICATION AND SINCE THE LD. COUNSEL FOR THE ASSESSEE HAS ALSO NOT RAISED ANY OBJECTION IN THIS REGARD, I SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) AND RESTORE THE MATTER TO THE FILE OF THE ASSESSING OFFICER FOR DECIDING THE SAME AFRE SH AFTER VERIFYING THE CLAIM OF THE ASSESSEE THAT THE INVESTMENT IN QUESTI ON OVER AND ABOVE THE I.T.A. NO. 1885/KOL./2014 ASSESSMENT YEAR: 2005-2006 & C.O. NO.102/KOL/2014 (IN ITA NO. 1885/KOL/2014) ASSESSMENT YEAR: 2005-2006 PAGE 9 OF 9 STATUTORY REQUIREMENT WAS NOT ONLY MADE BY THE ASSE SSEE FROM THE FUNDS GENERATED FROM ITS BANKING BUSINESS BUT WAS ALSO MA DE IN THE NORMAL COURSE OF ITS BANKING BUSINESS. 7. THE CROSS OBJECTION FILED BY THE ASSESSEE IS ONL Y IN SUPPORT OF THE IMPUGNED ORDER OF THE LD. CIT(APPEALS) AND AS AGREE D EVEN BY THE LD. COUNSEL FOR THE ASSESSEE, THE SAME IS LIABLE TO BE DISMISSED AS INFRUCTUOUS. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS TREA TED AS ALLOWED FOR STATISTICAL PURPOSES, WHILE THE CROSS OBJECTION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 05, 20 16. SD/- (P.M. JAGTAP) ACCOUNTANT MEMBER KOLKATA, THE 5 TH DAY OF AUGUST, 2016 COPIES TO : (1) ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-3, ASANSOL, PARMAR BUILDING, 54, G.T. ROAD (WEST), ASANSOL-713 304 (2) M/S. PURULIA CENTRAL COOPERATIVE BANK LIMITED , RANCHI ROAD, PURULIA-723 101 (3) COMMISSIONER OF INCOME TAX (APPEALS), ASANSOL ; (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.