M/s. Gangadareswara Souharda Pattina Sahakara Niyamitha, Koppal V. Income Tax Officer, Ward-1, Koppala

ITA 1926/BANG/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7710 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 04-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S VENKATESH
• Assessee Lawyers: R E BALASUBRAMANYAM

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 1926 / BANG/201 8 ASSESSMENT YEAR : 20 14 - 15 M/S. GANGADARESWARA SOUHARDA PATTINA SAHAKARA NIYAMITHA, 1 ST FLOOR, CBS COMPLEX BUS STAND, GANGAVATHI, KOPPAL DIST. PAN: AABAS2552D VS. THE INCOME TAX OFFICER, WARD 1, KOPPALA. APPELLANT RESPONDENT APPELLANT BY : SHRI R.E. BALASUBRAMANYAM, CA RESPONDENT BY : SHRI S. VENKATESH, JCIT (DR) DATE OF HEARING : 0 4 .0 7 .2018 DATE OF PRONOUNCEMENT : 13 .0 7 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE ORDER OF LD. CIT(A), GULBARGA DATED 28.03.2018 FOR ASSESSMEN T YEAR 2014-15. 2. THE GROUNDS RAISED BY THE ASSESSEEARE AS UNDER. THE APPELLANT OBJECTS TO THE ORDER OF THE LD.CIT(A) ON THE FOLLOWING GROUNDS THAT: 1. THE IMPUGNED ORDER IS OPPOSED TO FACTS AND LAW I N SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE APPELLANT. 2. THE LD. CIT (A) ERRED IN DENYING THE DEDUCTION U NDER SECTION 80P (2) MILK INCOME TAX ACT IN RESPECT OF INTEREST INCO ME RECEIVED FROM BANKS AND IN DOING SO A) THE LD.CIT(A) FAILED TO APPRECIATE THAT THE INTE REST INCOME FROM OTHER BANKS ARE ATTRIBUTABLE TO PROFITS AND GA INS OF THE BUSINESS OF EXTENDING CREDIT FACILITIES TO APPELLAN T'S MEMBERS. B) THE LD.CIT(A) FAILED TO APPRECIATE THAT THE BUSI NESS OF THE APPELLANT CONSISTS ENTIRELY OF EXTENDING CREDIT FAC ILITIES ONLY TO ITA NO.1926/BANG/2018 PAGE 2 OF 4 ITS MEMBERS AND THE INTEREST INCOME FROM VARIOUS BA NKS AROSE ONLY ON ACCOUNT OF KEEPING THE SURPLUS FUNDS FOR TH E TIME BEING IN ANTICIPATION OF LENDING THE SAME TO THE MEMBERS AS THERE WERE NO READY BORROWERS FOR THE SAID AMOUNT. 3. THE LD.CIT(A) FAILED TO APPRECIATE THE FACT THAT THE APPELLANT HAS ONLY ORDINARY MEMBERS AND NO NOMINAL MEMBERS AND DU RING THE NORMAL COURSE OF ITS BUSINESS HAS ONLY DEALT WITH I TS OWN MEMBERS AND NOT WITH ANY NOMINAL MEMBERS AS PER THE DECISION OF THE HONORABLE SUPREME COURT IN THE CITIZEN CO-OPERATIVE SOCIETY L IMITED. 4. WITHOUT PREJUDICE TO GROUND NO.2 AND AS AN ALTER NATE PLEA THE APPELLANT FURTHER SUBMITS THAT IN RESPECT OF THE IN COME EARNED FROM THE CO-OPERATIVE BANKS IT IS ENTITLED FOR DEDUCTION U/S 80P (2) (D) OF THE ACT INASMUCH AS THE CO-OPERATIVE BANKS ARE ALSO CO- OPERATIVE SOCIETIES AS PER SECTION 2(B1) OF KARNATAKA CO-OPER ATIVE SOCIETIES ACT, 1959. 5. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE ADD UCED IN TIME TO TIME, IT IS REQUESTED THAT THE HON'BLE ITAT TO CANC EL THE ADDITION MADE BY THE ASSESSING OFFICER AND ALLOW DEDUCTION UNDER SECTION 80P(2) OF THE ACT. 6. THE APPELLANT PRAYS FOR LEAVE TO ADD, MODIFY, DE LETE OR INTRODUCE ADDITIONAL GROUNDS OF APPEAL AT ANY TIME BEFORE THE APPEAL IS DISPOSED OFF. 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT IN A SSESSEES OWN CASE FOR ASSESSMENT YEAR 2013-14 IN ITA NO. 2585/BANG/2017 D ATED 19.01.2018, SIMILAR MATTER WAS RESTORED BACK BY THE TRIBUNAL TO THE FILE OF CIT(A) FOR FRESH DECISION BY WAY OF A SPEAKING AND REASONED ORDER. HE SUBMITTED THAT THE COPY OF THIS TRIBUNAL ORDER IS AVAILABLE ON PAGES 11 TO 15 OF PAPER BOOK AND IN PARTICULAR, MY ATTENTION WAS DRAWN TO PARA 4 OF THI S TRIBUNAL ORDER. THE LD. DR OF REVENUE SUPPORTED THE ORDERS OF AUTHORITIES BELO W. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND I FE EL IT PROPER TO RESTORE THE MATTER BACK TO THE FILE OF CIT(A) FOR FRESH DECISION WITH THE SAME DIRECTIONS AS WERE GIVEN BY THE TRIBUNAL IN ASSESSEES OWN CASE FOR AS SESSMENT YEAR 2013-14. FOR THE SAKE OF READY REFERENCE, I REPRODUCE PARA 4 OF THIS TRIBUNAL ORDER FROM PAGES 13 TO 15 OF PAPER BOOK. THE SAME IS AS UNDER . 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I FIND THAT THE CIT(A) HAS FOLLOWED THESE TWO JUDGEMENTS OF HON'BLE APEX COURT RENDERED IN THE CASE OF TOTAGARS COOPERATIVE SALE SOCIETY LTD. VS. ITO (SUPRA) AND ITA NO.1926/BANG/2018 PAGE 3 OF 4 CITIZEN CO-OPERATIVE SOCIETY (SUPRA). IN THE JUDGE MENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO(SUPRA), TH E JUDGMENT OF HON'BLE APEX COURT IN THE CASE OF TOTAGARS COOPERA TIVE SALE SOCIETY LTD. VS. ITO(SUPRA) WAS DULY CONSIDERED AND IN VIEW OF THE FACTS OF THAT CASE, RELIEF WAS ALLOWED TO ASSESSEE. BUT FOR ALLOWING SUCH RELIEF, THE FACTS ON VARIOUS ASPECTS HAS TO BE CONSIDERED A S TO WHETHER THE AMOUNT WHICH IS DEPOSITED IN BANK IS LIABILITY OF T HE ASSESSEE OR IT IS OWN FUND AND WHETHER THE FUNDS WAS IMMEDIATELY REQU IRED BY THE ASSESSEE FOR LENDING MONEY TO THE MEMBERS OF THE AS SESSEE SOCIETY OR NOT BECAUSE OF THIS REASON THAT THERE IS NO TAKER A S IN THAT CASE. THE APPLICABILITY OF THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF CITIZEN CO-OPERATIVE SOCIETY (SUPRA) IS ALS O TO BE EXAMINED IN THE LIGHT OF THE FACTS OF THAT CASE AND THE PRESENT CASE. HENCE I SET ASIDE THE ORDER OF CIT (A) AND RESTORE THE MATTER B ACK TO HIS FILE FOR FRESH DECISION BY WAY OF A SPEAKING AND REASONED OR DER IN THE LIGHT OF THIS JUDGEMENT OF HON'BLE KARNATAKA HIGH COURT REND ERED IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD . VS. ITO (SUPRA) AND OF HON'BLE APEX COURT RENDERED IN THE C ASE OF CITIZEN CO- OPERATIVE SOCIETY (SUPRA) IN THE LIGHTS OF THE FACT S OF THE PRESENT CASE AND IN THESE CASES ON VARIOUS ASPECTS AS DISCUSSED ABOVE. NEEDLESS TO SAY THAT THE CIT(A) SHOULD PASS NECESSARY ORDER AS PER LAW IN THE LIGHT OF ABOVE DISCUSSION AFTER PROVIDING ADEQUATE OPPORT UNITY OF BEING HEARD TO BOTH SIDES. 5. IN LINE WITH THIS TRIBUNAL ORDER IN ASSESSEES O WN CASE FOR ASSESSMENT YEAR 2013-14, THE ORDER OF CIT(A) IN THE PRESENT YEAR IS ALSO SET ASIDE AND THE MATTER IS RESTORED BACK TO THE FILE OF CIT(A) FOR FRESH DE CISION WITH THE SAME DIRECTIONS AFTER PROVIDING REASONABLE OPPORTUNITY OF BEING HEA RD TO BOTH SIDES. IN VIEW OF THIS DECISION, NO ADJUDICATION IS CALLED FOR REGARD ING THE MERIT OF THE CASE AT THE PRESENT STAGE. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DA TE MENTIONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 13 TH JULY, 2018. /MS/ ITA NO.1926/BANG/2018 PAGE 4 OF 4 COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.