Income-tax Officer, V. Swa Ashokrao Bankar Nagari Sahakari Patsanstha Maryadit, Nashik

ITA 2006/PUN/2014

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9543 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 11-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Section: 143(3); 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI RAJESH KUMAR , AM . / ITA NO.2006/PUN/2014 / ASSESSMENT YEAR : 2010-11 THE INCOME TAX OFFICER, WARD-1(1), NASHIK . / APPELLANT VS. SWA ASHOKRAO BANKAR NAGARI SAHAKARI PATSANSTHA MARYADIT, OPP. POLICE STATION, PIMPALGAON (B), TAL. NIPHAD, DIST. NASHIK 422 209 PAN : AAAAA2084K . RESPONDENT / APPELLANT BY : MS. ANN KAPTHUAMA / RESPONDENT BY : NONE DATE OF HEARING : 03.05.2017 / DATE OF PRONOUNCEMENT: 04.05.2017 / ORDER PER SUSHMA CHOWLA, JM: THE CAPTIONED APPEAL FILED BY THE REVENUE IS AGAINS T ORDER OF CIT(A)- I, NASHIK, DATED 04.09.2014 RELATING TO ASSESSMENT YEAR 2010-11 AGAINST ORDER PASSED UNDER SECTION 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT). 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- '1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE, THE LD.CIT(A)-I, NASHIK WAS JUSTIFIED IN ALLOWING THE D EDUCTION U/S.80P(2)(A)(I) AMOUNTING TO RS.53,60,042/- IN RES PECT OF INTEREST EARNED ON FIXED DEPOSITS WITH NATIONALISED BANK. ITA NO.2006/PUN/2014 2010-11 2 2. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD.CIT(A)-I, NASHIK WAS JUSTIFIED IN RELYING ON THE HONBLE ITAT, PUNE B BENCH IN THE CASE OF ITO, WARD-1(4), NASHIK VS. NIPHAD NAGARI SAHAKARI PATSANSTHA LTD. VIDE ITA NO.1336/PUN/2011 A.Y. 2008-09 DATED 31-07-2013 EVEN THOUGH THE SAID DECISION IS B EING CONTESTED FURTHER IN THE HON. HIGH COURT. 3. THE APPELLANT PRAYS THAT THE ORDER OF THE LD.CIT (A)-I, NASHIK MAY BE PLEASE BE CANCELLED AND THE ORDER OF ASSESSING O FFICER MAY PLEASE BE RESTORED. 4. THE APPELLANT PRAYS LEAVE TO ADD, ALTER, CLARIFY , AMEND AND OR WITHDRAW ANY GROUNDS OF APPEAL AS AND WHEN THE OCCA SION DEMANDS. 3. DESPITE SERVICE OF NOTICE NONE APPEARED ON BEHAL F OF THE ASSESSEE NOR ANY APPLICATION WAS FILED FOR ADJOURNMENT OF TH E CASE. HENCE WE PROCEED TO DECIDE THE PRESENT APPEAL AFTER HEARING THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE SINCE THE ISSUE RAI SED IN THE PRESENT APPEAL IS COVERED BY THE ORDER OF THE TRIBUNAL. 4. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS A GAINST CLAIM OF DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT AT RS.53,60,042/- IN RESPECT OF INTEREST EARNED ON FIXED DEPOSITS WITH NATIONALI SED BANKS. 5. BRIEFLY IN THE FACTS OF THE CASE THE ASSESSEE SO CIETY WAS A REGISTERED COOPERATIVE SOCIETY CARRYING ON BANKING BUSINESS AN D WAS REGISTERED UNDER THE MAHARASHTRA STATE COOPERATIVE ACT. IT PROVIDES FACILITIES TO ITS MEMBERS, ADVANCED LOAN TO THE MEMBERS, CHARGED INTEREST ON T HE SAME. IT ALSO ACCEPTED DEPOSITS FROM MEMBERS AND GAVE INTEREST ON IT. THE ASSESSEE ALSO RECEIVED INTEREST ON FIXED DEPOSITS AS WELL AS FIXED DEPOSITS KEPT WITH BANKS. DURING THE YEAR UNDER CONSIDERATION, THE AS SESSEE HAD RECEIVED INTEREST TO THE EXTENT OF RS.57,15,295/- FROM THE N ATIONALISED BANKS. THE ASSESSING OFFICER WAS OF THE VIEW THAT SINCE THE IN TEREST INCOME DO NOT CONSTITUTE THE OPERATIONAL INCOME OF THE ASSESSEE S OCIETY, THEREFORE, IT WAS NOT ENTITLED TO DEDUCTION UNDER SECTION 80P(2)(A)(I ) OF THE ACT. THE ASSESSING OFFICER ALLOWED EXPENDITURE TO THE EXTENT OF RS.3,55,253/- AGAINST ITA NO.2006/PUN/2014 2010-11 3 THE SAID INCOME AND THE NET INCOME OF RS.53,60,042/ - WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE UNDER SECTION 56 OF THE INCO ME TAX ACT. 6. THE CIT(A) RELYING ON THE RATIO LAID DOWN BY THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. NIPHAD NAGARI SAHAKARI PATSANSTHA LTD. IN ITA NO.1336/PUN/2011 RELATING TO ASSESSMENT YEAR 20 08-09 DATED 31- 07-2013 ALLOWED THE CLAIM OF THE ASSESSEE. 7. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CI T(A). 8. ON THE PERUSAL OF RECORD, WE FIND THAT THE ISSUE IN THE PRESENT APPEAL IS AGAINST THE CLAIM OF DEDUCTION UNDER SECTION 80P (2)(A)(I) OF THE ACT ON INTEREST INCOME RECEIVED FROM FIXED DEPOSITS WITH B ANK OF INDIA, HDFC BANK, STATE BANK OF INDIA AND DEVELOPMENT CREDIT BANK. TH E SAID ISSUE IS SQUARELY COVERED BY THE ORDER OF THE TRIBUNAL IN IT O VS. NIPHAD NAGARI SAHAKARI PATSANSTHA LTD. (SUPRA) WHEREIN THE TRIBU NAL HAD HELD THAT THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT ON THE INTEREST INCOME RECEIVED BY IT ON BANK F IXED DEPOSITS. THE RELEVANT FINDINGS OF THE TRIBUNAL ARE REPRODUCED AT PAGE 9 OF THE APPELLATE ORDER BUT ARE NOT BEING REPRODUCED FOR THE SAKE OF BREVITY. FOLLOWING THE SAME PARITY OF REASONING, WE FIND NO MERIT IN THE G ROUNDS OF APPEAL RAISED BY THE REVENUE AND HENCE THE SAME ARE THUS DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED ON THIS 4 TH DAY OF MAY, 2017. SD/- SD/- (RAJESH KUMAR) (SUSHMA CHOWLA) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; DATED : 4 TH MAY, 2017. SATISH ITA NO.2006/PUN/2014 2010-11 4 / COPY OF THE ORDER IS FORWARDED TO : THE APPELLANT; THE RESPONDENT; ( ) THE CIT(A)-V, PUNE; / THE CIT - V , PUNE ; , , / DR A, ITAT, PUNE; / GUARD FILE. / BY ORDER // TRUE COPY // / ASSISTANT REGISTRAR, , / ITAT, PUNE