Shri Shramjivi Nagrik Sahakari Mandli Ltd., Vadodara V. The Income Tax Officer, Ward-3(1)(1), Vadodara

ITA 1901/AHD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8072 (ITAT-AHMEDABAD)
• Duration Of Justice: 10 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2014-2015
• Appeal Filed On: 18-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M J SHAH A R SHRI PRASOON KABR
• Section: 234B; 56

Judgement Text

, LH LHLH LH IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD LOZJH LOZJH LOZJH LOZJH OLHE OLHE OLHE OLHE VGEN] YS[KK LNL; , VGEN] YS[KK LNL; , VGEN] YS[KK LNL; , VGEN] YS[KK LNL; ,OA OAOA OA EK/ EK/EK/ EK/KQFERK KQFERK KQFERK KQFERK JKW;] U; JKW;] U; JKW;] U; JKW;] U;KF KFKF KF;D LNL; ;D LNL; ;D LNL; ;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 SR. NOS. ITA NO(S) ASST. YEAR(S) APPEAL(S) BY APPELLANT VS. RESPONDENT APPELLANT RESPONDENT 1. 1900/AHD/2017 2014-15 SHREE JANSEVA NAGRIK SAHAKARI MANDALI LTD., WADI TAD FALIA WADI, VADODARA 390 017 PAN : AAAAS 7771 H INCOME TAX OFFICER, WARD 3(1)(1), VADODARA. 2. 1901/AHD/2017 2014-15 SHRI SHRAMJIVI NAGRIK SAHAKARI MANDALI LTD., JAGGANATH HAVELI, NEAR WADI TOWER, VADODARA 390 017 PAN : AAAAS 1934 L -DO- 3. 1902/AHD/2017 2014-15 SHREENATHJI CO.OP CREDIT SOCIETY LTD., F-25/1, SAURABH VAIKA SOC. LAL BAHADUR SHASTRI MARG, OPP:SIDDHI VINAYAK SOC., O/S. PANIGATE , VADODARA 390 019 PAN: AAAAS 7147 R -DO- 4. 1904/AHD/2018 2014-15 SHEEJI CO.OP CREDIT SOCIETY LTD., B-1, GANGOTRI APPARTMENT, R.V. DESAI ROAD, VADODARA 380 001, PAN: AAABS 0575 Q INCOME TAX OFFICER, WARD 3(1)(3), VADODARA. 5. 1906/AHD/2018 2014-15 SHREE VAISHNAV PARIVAR SAHAKARI MANDALI LTD., B/H BHARAT CO.OP BANK LTD., TAD FALIA WADI, VADODARA 390 017 PAN : AAAAS 7770 G INCOME TAX OFFICER, WARD 3(1)(1), VADODARA. APPELLANT BY : SHRI M. J. SHAH, A.R. / RESPONDENT BY : SHRI PRASOON KABRA, SR. D.R. ITA NOS.1900, 1901 AND 1902/AHD/2017 & 19 04 AND 1906 /AHD/2018 ASST.YEAR 2014-15 - 2 - / 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 DIFFERENT ASSESSEES AGAINST THE SEPARATE APPELLATE ORDERS OF THE COMMISSIONER OF INCOME TAX(APPEALS)-3, VADODARA [CIT(A) IN SHORT] VIDE APPEAL NOS.CAB-3/10151/2016-17, CAB-3/10152/2016-17, CAB-3 /10153/2016- 17, CAB-3/10155/2016-17 & CAB-3/10157/2016-17 DATED 30/05/2017, 31/05/2017, 29/05/2017, 29/05/2017 & 25/05/2017 ARI SING IN THE ASSESSMENT ORDER PASSED UNDER S.143(3) OF THE INCOM E TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') DATED 26/06 /2016, 28/06/2018, 27/06/2016, 05/07/2016 & 27/06/2016 RELEVANT TO ASS ESSMENT YEAR (AY) 2014-15. 2. SINCE FACTS ARE IDENTICAL IN ALL THESE APPEALS E XCEPT VARIATION IN THE AMOUNT, WE TAKE THE FACTS IN THE CASE OF SHRI VAISH NAV PARIVAR SAHAKARI MANDALI LTD., IN ITA NO.1906/AHD/2017 AS THE LEAD C ASE FOR THE SAKE OF CONVENIENCE. THE GROUNDS RAISED IN THIS APPEAL REA DS AS UNDER: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS )-3. VADODARA ['THE CIT(A)'] ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF INCOME TAX OFFICER, WARD 3(1)(1), BAR ODA ['THE ACT] IN NOT ALLOWING THE DEDUCTION U/S 80P(2)(A)(I) OF RS.4,28,590/- CLAIMED BY THE APPELLANT. 2. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE AO HOLDING THAT THE INTEREST EARNED B Y THE APPELLANT FROM DEPOSITS MADE WITH NATIONALIZED BANKS IS ASSES SABLE U/S 56 AND NOT ELIGIBLE FOR DEDUCTION U/S.80P(2)(A)(I) AS IT IS NOT RELATED ITA NOS.1900, 1901 AND 1902/AHD/2017 & 19 04 AND 1906 /AHD/2018 ASST.YEAR 2014-15 - 3 - TO THE BUSINESS OF PROVIDING CREDIT FACILITIES TO T HE MEMBERS OF THE APPELLANT. 3. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN IGNORING THE PROVISIONS OF SECTION 80P(2)(A)(I) WITH CLEARLY PRO VIDES THAT THE DEDUCTION IS AVAILABLE TO A CO-OPERATIVE SOCIETY WH ICH IS ENGAGED IN CARRYING ON THE BUSINESS OF BANKING OR P ROVIDING CREDIT FACILITIES TO ITS MEMBERS. 4. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF AO IN CHARGING INTEREST U/S. 234B OF THE ACT. 5. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN C ONFIRMING THE ACTION OF THE AO IN INITIATING PENALTY PROCEEDING U /S 271(1)(C) OF THE INCOME TAX ACT, 1961 ('THE ACT). 3. THE ONLY ISSUE RAISED BY THE ASSESSEE IN ALL THE GROUNDS OF APPEAL IS THAT LEARNED CIT(A) ERRED IN DISALLOWING THE DEDUCT ION U/S 80P(2)(A)(I) OF THE ACT FOR RS.4,28,590/-. 4. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IN TH E PRESENT CASE IS A CO- OPERATIVE SOCIETY AND ENGAGED IN PROVIDING CREDIT F ACILITIES TO ITS MEMBERS. THE ASSESSEE DURING THE YEAR HAS EARNED IN TEREST INCOME OF RS.19,75,265/- ON THE MONEY DEPOSITED WITH NATIONAL IZED AND CO- OPERATIVE BANKS. THE ASSESSEE IN RESPECT OF SUCH IN TEREST INCOME HAS CLAIMED DEDUCTION U/S 80P(2)(A)(I) OF THE ACT. HOWE VER, THE AO WAS OF THE VIEW THAT THE DEDUCTION U/S 80P(2)(A)(I) AVAILA BLE TO THE ASSESSEE TO THE EXTENT OF INTEREST INCOME EARNED BY IT FROM THE CREDIT FACILITIES EXTENDED TO ITS MEMBERS. ACCORDINGLY, THE AO TREATE D THE INCOME OF RS.19,75,265/- AS DISCUSSED ABOVE AS INCOME UNDER T HE HEAD INCOME FROM OTHER SOURCES AND CONSEQUENTLY DENIED THE DEDUCTION CLAIMED U/S 80P(2)(A)(I) OF THE ACT FOR RS.4,28,593/- ONLY. ITA NOS.1900, 1901 AND 1902/AHD/2017 & 19 04 AND 1906 /AHD/2018 ASST.YEAR 2014-15 - 4 - 5. AGGRIEVED, ASSESSEE PREFERRED AN APPEAL TO LEARN ED CIT(A) WHO CONFIRMED THE ORDER OF AO. BEING AGGRIEVED BY ORDER OF LEARNED CIT(A) THE ASSE SSEE IS IN THE SECOND APPEAL BEFORE US. THE LEARNED AR BEFORE US FAIRLY CONCEDED THAT THE A SSESSEE IS NOT ENTITLED TO CLAIM THE DEDUCTION U/S 80P(2)(A)(I) OF THE ACT IN RESPECT OF INTEREST INCOME EARNED FROM NATIONALIZED/CO-OPERATIVE BANKS IN VIEW OF THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT I N THE CASE OF STATE BANK OF INDIA VS. CIT 389 ITR 578. HOWEVER, THE LEARNED AR FOR THE ASSESSEE SUBMITTED THAT NET AMOUNT OF INTEREST INCOME SHOULD BE CONSIDERED FOR DISALLOWIN G THE DEDUCTION U/S 80P(2)(A)(I). THE LEARNED AR FOR THE ASSESSEE IN SU PPORT OF HIS CONTENTION RELIED ON THE ORDER OF THIS TRIBUNAL IN THE CASE OF SHREEJI CO-OPERATIVE CREDIT SOCIETY LTD VS. ITO PERTAINING TO THE ASSESS MENT YEAR 2013-14 IN ITA NO.2751/AHD/2016 VIDE ORDER DATED 15-02-2018. ON THE OTHER HAND, LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF AUTHORITIES BELOW. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. AT THE OUTSET, WE FIND THAT TH E IDENTICAL ISSUE HAS BEEN DECIDED BY THIS HONBLE TRIBUNAL IN THE CASE O F SHREEJI CO-OPERATIVE CREDIT SOCIETY LTD. (SUPRA) WHEREIN, IT WAS HELD AS UNDER: 3. AT THE OUTSET, THE LD. COUNSEL FOR THE ASSESSEE FAIRY CONCEDED THAT ISSUE IN DISPUTE IS SQUARELY COVERED AGAINST THE AS SESSEE BY DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F STATE BANK OF INDIA ITA NOS.1900, 1901 AND 1902/AHD/2017 & 19 04 AND 1906 /AHD/2018 ASST.YEAR 2014-15 - 5 - VS. CIT, 389 ITR 578 WHEREIN HONBLE COURT HELD THA T INTEREST EARNED FROM INVESTMENT MADE IN ANY BANK IS NOT DEDUCTIBLE UNDER SECTION 80P(2)(D). IN THIS VIEW OF THE MATTER, WE DISMISS T HE APPEAL OF THE ASSESSEE. HOWEVER, ANY EXPENDITURE INCURRED BY THE ASSESSEE FOR EARNING SUCH INCOME COULD BE ALLOWED TO IT. IN OTHE R WORDS, THE LD. AO HAS TO DETERMINE THE NET INTEREST EARNED BY THE ASS ESSEE ON SUCH INVESTMENT WITH BANK, AND ONLY THEREAFTER THAT INCO ME HAS TO BE EXCLUDED FROM THE ADMISSIBILITY OF DEDUCTION UNDER SECTION 80P(2) OF THE ACT. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. THE FACTS OF THE CASE ON HAND ARE IDENTICAL AS DISC USSED IN THE ABOVE CASE. THEREFORE, RESPECTFULLY FOLLOWING THE SAME, WE DIRE CT 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. HE NCE, GROUNDS OF APPEAL FILED BY THE ASSESSEE ARE ALLOWED FOR STATIS TICAL PURPOSES. 7. IN THE RESULT, ALL THE FIVE APPEALS FILED BY THE ASSESSEES ARE 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.1900, 1901 AND 1902/AHD/2017 & 19 04 AND 1906 /AHD/2018 ASST.YEAR 2014-15 - 6 - ! COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. !'!#$ % / CONCERNED CIT 4. % &' / THE CIT(A)-3, VADODARA. 5. ()*++#$ , #$ , -.' / DR, ITAT, AHMEDABAD 6. */01 GUARD FILE. ' # $ / BY ORDER, (+ //TRUE COPY// %/$ &' ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 26/06/2018. (DICTATION-PAD 2 PA GES ATTACHED AT THE END OF THIS FILE) 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 27/06/2018 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