M/s. Narasingapuram Primary Agricultural Co-operative Bank Ltd., CHENNAI V. ITO, Salem

ITA 1896/CHNY/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 57908 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 31-01-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 11-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N PRAKASH
• Assessee Lawyers: S SRIDHAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO. 1896/MDS/2010 (ASSESSMENT YEAR : 2007-08) SRI NARASINGAPURAM PRIMARY AGRICULTURAL CO-OPERATIVE BANK LTD. S-6608 NARASINGAPURAM, ALTUR TALUK SALEM 636 108 PAN : AAAA 3472 C (APPELLANT) VS . THE INCOME - TAX OFFICER WARD II(3), SALEM. (RESPONDENT) APPELLANT BY : SHRI S. SRIDHAR, ADV OCATE RESPONDENT BY : SHRI T.N. PRAKAS H, JCIT DATE OF HEARING : 31.1.2012 DATE OF PRONOUNCEMENT : 31.1.2012 O R D E R PER N.S. SAINI, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY ASSESSEE FOR THE ASSESS MENT YEAR 2007-2008 AGAINST THE ORDER DATED 16.09.2010 OF COM MISSIONER OF ITA NO. 1896/MDS/2010 INCOME TAX (APPEALS), SALEM BY TAKING THE FOLLOWING GROUNDS OF APPEAL: 1. THE ORDER OF THE LD. CIT(A), SALEM DATED 16.9.2010 IN ITA NO. 117/2009-10 FOR THE ABOVE A.Y. IS CONTRARY TO L AW, FACTS AND IN THE CIRCUMSTANCES OF THE CASE. 2. THE LD. CIT(A) ERRED IN SUSTAINING THE REJECTION OF THE CLAIM OF DEDUCTION U/S 80P(2)(A)(I) AND (IV) R/W SUB-SECT ION 4 TO THE SAID SECTION OF THE ACT WITHOUT ASSIGNING PROPER RE ASONS AND JUSTIFICATION. 3. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE CLAIM OF DEDUCTION UNDER CONSIDERATION WAS CORRECT AND TENAB LE IN LAW FOR ACCEPTANCE IN THE COMPUTATION OF TAXABLE TOTAL INCOME IN THE LIGHT OF THE FULFILLMENT OF THE CONDITIONS PRES CRIBED. 4. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE FINDIN GS RECORDED TO SUSTAIN THE REJECTION OF THE SAID CLAIM OF DEDUC TION WERE WRONG, INCORRECT, UNJUSTIFIED, ERRONEOUS AND NOT SU STAINABLE BOTH ON FACTS AND IN LAW. 5. THE LD. CIT(A) OUGHT TO HAVE CONSIDERED THE ALTERNA TE CLAIM OF DEDUCTION U/S 80P(2)(A)(I) OF THE ACT IN PASSING THE IMPUGNED ORDER AND NON-CONSIDERATION OF THE SAID AL TERNATE CLAIM WOULD DEFEAT THE PRINCIPLES OF LEGITIMATE EXP ECTATION. 6. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE FINDIN GS ON THE INTEREST EARNED FROM JEWEL LOANS ON THE ANALYSIS OF THE FACTS OF THE CASE HAD A DIRECT AND LIVE NEXUS WITH THE MA IN OBJECT RELATING TO AGRICULTURAL OPERATIONS IN AS MUCH AS T HE METHOD ITA NO. 1896/MDS/2010 OF PROVIDING SUCH FACILITIES TO THE AGRICULTURAL OP ERATIONS WOULD NOT DEFEAT THE CLAIM UNDER CONSIDERATION. 7. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE SUBMIS SIONS FILED ON 16.9.2010 IN WRITING IN THE PROCEEDINGS LEADING TO ETH PASSING OF THE IMPUGNED ORDER WERE NOT TAKEN INTO CONSIDERATION IN PROPER PERSPECTIVE. 8. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE INTERP RETATION OF THE PROVISIONS UNDER CONSIDERATION ATTEMPTED IN THE IMPUGNED ORDER WAS WRONG, INCORRECT, UNJUSTIFIED, E RRONEOUS AND NOT SUSTAINABLE BOTH ON FACTS AND IN LAW. 9. THE LD. CIT(A) FAILED TO APPRECIATE THAT THE RECOMP UTATION OF DEDUCTION U/S 80P OF THE ACT WAS WRONG, INCORRECT, UNJUSTIFIED, ERRONEOUS AND NOT SUSTAINABLE BOTH ON FACTS AND IN LAW. 10. THE LD. CIT(A) FAILED TO APPRECIATE THAT THERE WAS NO COMMERCIAL ACTIVITY INVOLVED AS ASSUMED IN AS MUCH AS THE PURPOSE OF THE TRANSACTIONS SECURITIZED WAS TOTALLY BRUSHED ASIDE, WHICH ACCORDING TO THE APPELLANT HAD LED TO THE WRONG FINDINGS AS RECORDED IN PARA 6 OF THE IMPUGNED ORDE R. 11. THE LD. CIT(A) FAILED TO APPRECIATE THAT THERE WAS NO PROPER OPPORTUNITY GIVEN BEFORE PASSING THE IMPUGNED ORDER AND ANY ORDER PASSED IN VIOLATION OF THE PRINCIPLES OF NATU RAL JUSTICE IS NULLITY IN LAW. ITA NO. 1896/MDS/2010 2. AT THE OUTSET, THE LD. A.R. FOR THE ASSESSEE SHR I S. SRIDHAR SUBMITTED THAT IT WILL BE OBSERVED FROM THE WRITTEN SUBMISSIONS FILED BEFORE THE CIT(A) DURING THE COURSE OF APPELL ATE HEARING A COPY OF WHICH IS ALSO ENCLOSED WITH THE APPEAL MEMO THAT THE ASSESSEE HAS MADE AN ALTERNATE SUBMISSION THAT IN T HE EVENT OF THE CLAIM FOR EXEMPTION U/S 80P OF THE ACT OF THE ASSES SEE IS REJECTED AS ERRONEOUS, THEN THE ASSESSEE IS ENTITLED FOR EXE MPTION FROM THE INCOME ON THE GROUND OF MUTUALITY. HE SUBMITTED TH AT THE CIT(A), WHILE DISPOSING OFF THE APPEAL OF THE ASSESSEE, HAS NOT CONSIDERED AND DECIDED THIS SUBMISSION OF THE ASSESSEE AND THE REFORE, THE MATTER NEEDS TO BE SET ASIDE TO THE FILE OF THE CIT (A) FOR ADJUDICATION OF THE SAME. HE FURTHER SUBMITTED THA T IT WILL BE SEEN FROM THE ORDER OF THE CIT(A) THAT ONLY ONE DATE OF HEARING WAS GIVEN IN THE CASE ON 14.9.2010 WHICH WAS NOT A SUFFICIENT OPPORTUNITY GRANTED TO THE ASSESSEE BY THE CIT(A) BEFORE PASSIN G THE IMPUGNED ORDER WHICH WAS IN VIOLATION OF PRINCIPLES OF NATUR AL JUSTICE. ITA NO. 1896/MDS/2010 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, WE FIND FROM THE COPY OF WRITTEN SUBMISSION FILED BEFORE THE CIT(A) WHICH HAS ALSO B EEN FILED BEFORE US WITH THE APPEAL MEMO THAT, IN THE ALTERNATIVE, T HE CONTENTION OF THE ASSESSEE WAS THAT IF THE CLAIM FOR EXEMPTION U/ S 80P OF THE ACT WAS REJECTED, THEN EXEMPTION OF THE INCOME SHOULD B E GRANTED ON THE PRINCIPLE OF MUTUALITY. WE FIND THAT THIS CONT ENTION OF THE ASSESSEE HAS NOT BEEN DECIDED BY THE CIT(A). BOTH THE PARTIES AGREED BEFORE US THAT TO DECIDE THE ISSUE WHETHER T HE INCOME IN QUESTION IS EXEMPT ON THE BASIS OF MUTUALITY REQUIR ES VERIFICATION OF FACTS AND FIGURES FROM THE BOOKS OF ACCOUNT AND OTH ER RELATED DOCUMENTS. THEREFORE, THE MATTER NEEDS TO BE RESTO RED BACK TO THE FILE OF THE AO FOR VERIFICATION OF ALL FACTS AND TH EN TO DECIDE THE ISSUE AS PER LAW. WE, THEREFORE, SET ASIDE THE ORD ERS OF THE LOWER AUTHORITIES AND ORDER ACCORDINGLY. THUS THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 1896/MDS/2010 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE H EARING IN THE PRESENCE OF THE PARTIES ON 31 ST JANUARY, 2012. SD/- SD/- (GEORGE MATHAN) (N.S. SAI NI) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 31 ST JANUARY, 2012. VL COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A), CHENNAI (4) CIT, CHENNAI (5) D.R. (6) GUARD FILE