M/s. Vir Transport Operators Co. Op. Credit and Servieces Society, Dahod V. The Income Tax Officer, Ward-2, Dahod

ITA 2018/AHD/2017

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9399 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 08-01-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 08-09-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEELIPKUMAR
• Section: 80P; 64; 72

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI RAJPAL YADAV, HONBLE JUDICIAL MEMBER AND SHRI WASEEM AHMED HONBLE ACCOUNTANT MEMBER ITA NO.2018/AHD/2017 / ASSTT. YEAR: 2014-15 M/S.VIR TRANSPO R T OPERATOR CO - OP. CREDIT AND SERVICES SOCIETY GODHRA ROAD, LIMDI, TAL. JHALOD DIST. DAHOD 389 180. PAN : AAAAS 2228 K VS. ITO, WARD - 2 DAHOD. ITA NO.2019/AHD/2017 / ASSTT. YEAR: 2014-15 AND ITA NO.97/AHD/2017 ASSTT.YEAR 2013-14 THE LUNAWADA TALUKA PRIMARY SCHOOL TEACHERS CO-OP. CREDIT SOCIETY LTD. AT PARAMA, LUNAWADA 389 230 JULLA MAHISAGAR. PAN : AAAAT 2876 N VS. ITO, WARD - 2 PANCHMAHAL CIRCLE GODHRA. ( APPLICANT ) ( RESPONENT ) ASSESSEE BY : MS.URVASHI SHODHAN, AR REVENUE BY : SHRI DEELIPKUMAR, SR.DR / DATE OF HEARING : 08/01/2020 / DATE OF PRONOUNCEMENT: 09/01/2020 / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: PRESENT THREE APPEALS ARE DIRECTED AT THE INSTANCE OF THE ASSESSEES AGAINST ORDERS OF LD.CIT(A)-4, BARODA DATED 5.5.201 7 PASSED FOR THE ASSTT.YEAR ITA NO.2018, 2019 AND 97 /AHD/2017 2 2014-15 (IN THE CASE OF VIR TRANSPORT OPERATORS CO- OP. CREDIT SOCIETY LTD.) AND ORDERS DATED 30.9.2016 AND 15.6.2017 FOR THE AS STT.YEAR 2013-13 AND 2014-15 (IN THE CASE OF THE LUNAWADA TALUKA PRIMARY SCHOOL TEACHERS CO- OP. CREDIT SOCIETY). 2. THE LD.COUNSEL FOR THE ASSESSEE AT THE VERY OUTS ET SUBMITTED THAT ITA NO.97/AHD/2017 WAS DECIDED BY THE TRIBUNAL VIDE ORD ER DATED 10.5.2018. THEREAFTER, THE ASSESSEE HAS FILED AN MA BEARING NO .263/AHD/2018 PLEADING THEREIN THAT GROUND NO.5 IN RESPECT OF ALLOWABILITY OF DEDUCTION OF INTEREST INCOME DERIVED BY THE ASSESSEE FROM DEPOSITS MADE W ITH COOPERATIVE BANK AND SOCIETY UNDER SECTION 80P(2)(D) WAS NOT DECIDED BY THE TRIBUNAL. THE TRIBUNAL HAS ALLOWED THIS MA AND RESTORED THIS GROU ND FOR ADJUDICATION AFRESH. IN THIS WAY, WE TAKE ALL THESE THREE APPEAL S TOGETHER. 3. A PERUSAL OF GROUNDS OF APPEAL TAKEN BY BOTH THE ASSESSEES IN THE ASSTT.YEAR 2014-15 WOULD REVEAL THAT THEY HAVE TAKE N SEVEN GROUNDS OF APPEAL, WHICH ARE NOT IN CONSONANCE WITH THE RULE 8 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963 - THEY ARE DESCRIP TIVE AND ARGUMENTATIVE IN NATURE. IN BRIEF, THE GRIEVANCES OF BOTH THE ASSESS ES CAN BE DIVIDED INTO TWO COMPARTMENTS VIZ. WHAT AMOUNT OF INTEREST INCOME DE SERVES TO BE EXCLUDED FROM THE COMPUTATION OF DEDUCTION UNDER SECTION 80P (2)(A)(I) AS WELL AS UNDER SECTION 80P(2)(D) OF THE INCOME TAX ACT. 4. WITH THE ASSISTANCE OF LD.REPRESENTATIVES, WE HA VE GONE THROUGH THE RECORD CAREFULLY. IT EMERGES OUT FROM THE RECORD T HAT BOTH THE ASSESSEES ARE CREDIT COOPERATIVE SOCIETIES, WHICH HAS BEEN ENTERT AINING DEPOSITS FROM THEIR MEMBERS, AND PROVIDING CREDIT FACILITIES. THE ASSE SSEES HAVE EARNED TWO TYPES OF INTEREST INCOME VIZ. (A) INTEREST INCOME F ROM NATIONALISED BANKS, AND (B) INTEREST INCOME FROM COOPERATIVE SOCIETIES/COOP ERATIVE BANKS. THE ITA NO.2018, 2019 AND 97 /AHD/2017 3 LD.COUNSEL FOR THE ASSESSEE SUBMITTED THAT COMPUTAT ION OF DEDUCTION MADE UNDER SECTION 80P(2)(A)(I) AS WELL AS UNDER SECTION 80P(2)(D). SHE CONTENDED THAT AS FAR AS INTEREST INCOME FROM SCHEDULED BANK IS CONCERNED, THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION UNDER SECTION 80P(2)( A)(I) IN VIEW OF JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF ST ATE BANK OF INDIA VS.CIT, 72 TAXMANN.COM 64 (GUJ). SHE PLEADED THAT WHILE WO RKING OUT THE AMOUNT OUT OF INTEREST INCOME FROM SCHEDULED BANK, ITS NET INTEREST INCOME OUGHT TO BE DISALLOWED. IF ANY EXPENDITURE RELATABLE TO EAR NING OF SUCH INTEREST INCOME, DESERVES TO BE SET OFF AGAINST THE INTEREST INCOME, AND THEREAFTER, NET IS TO BE EXCLUDED FROM THE DEDUCTION. AS FAR AS INTEREST IN COME FROM COOPERATIVE BANK/SOCIETY IS CONCERNED, THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY VARIOUS DECISIONS. SHE RELIED UPON LATEST ORDER OF THE TRIBUNAL PASSED IN ITA NO.1132/AHD/2018 IN THE CASE OF SAHYOG CO-OP. CREDI T SOCIETY LTD. THE TRIBUNAL HAS DECIDED THIS APPEAL ON 29.11.2019. WH ILE DEALING WITH THIS ISSUE, THE TRIBUNAL HAS DECIDED AS UNDER: 6. AS REGARDS GROUND NO.3, IT CONCERNS ELIGIBILITY OF DEDUCTION CLAIMED UNDER S.80P(2)(D) OF THE ACT ON ACCOUNT OF INTEREST INCOME RECEIVED FROM INVESTMENT MADE WITH CO-OPERATIVE BAN KS. IT WAS SUBMITTED ON BEHALF OF THE ASSESSEE THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE IN THE CASE OF BANASKANTHA D ISTRICT CO-OPERATIVE MILK PRODUCERS UNION LTD. VS. AC1T ITA NO.L090/AHD/ 2015 WHEREIN THE CO-ORDINATE BENCH HAS HELD IN FAVOUR OF ASSESSE E BY MAKING REFERENCE TO THE DECISION OF THE HON'BLE GUJARAT HI GH COURT IN THE CASE OF CIT VS. SABARKANTHA DISTRICT COOPERATIVE MILK PR ODUCERS UNION LTD. TAX APPEAL NO. 473 OF 2014. IT WAS POINTED OUT ON B EHALF OF THE ASSESSEE THAT K.D.C.C. BANK IS A CO-OPERATIVE BANK REGISTERED UNDER CO-OPERATIVE SOCIETY ACT AND INVESTMENT MADE IN THI S BANK AND INTEREST EARNED. THIS INVESTMENT IS ELIGIBLE FOR DEDUCTION U NDER S.80P(2)(D) OF THE ACT. 7. IN THE GIVEN FACTS AS NOTED ABOVE, THE CLAIM OF THE ASSESSEE UNDER S.80P(2)(D) OF THE ACT APPEARS TO BE IN CONSONANCE WITH THE PLAIN LANGUAGE OF THE ACT. WE THUS FIND MERIT IN THE CLAI M OF THE ASSESSEE FOR ITA NO.2018, 2019 AND 97 /AHD/2017 4 DEDUCTION UNDER S.80P(2)(D) OF THE ACT IN RESPECT O F INCOME EARNED FROM K.D.C.C. BANK. 5. ON THE STRENGTH OF THE ABOVE, SHE CONTENDED THAT INTEREST INCOME FROM ANY COOPERATIVE BANK/CREDIT SOCIETIES BE ALLOWED AS DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT. SHE DREW OUR ATTENTION TOWAR DS COMPUTATION AND SUBMITTED THAT IN THE CASE OF THE LUNAWADA TALUKA P RIMARY SCHOOL TEACHERS COOPERATIVE CREDIT SOCIETY LTD. FOR THE ASSTT.YEAR 2014-15, THIS INTEREST INCOME FROM COOPERATIVE BANK IS RS.36,08,164/-. SI MILARLY, FOR THE ASSTT.YEAR 2013-14 IN THE ACCOUNT OF THE SOCIETY, T HE INTEREST INCOME UNDER SECTION 80P(2)(D) FROM THE COOPERATIVE BANK IS OF R S.35,71,014/-. SHE PRAYED THAT THESE INCOME BE ALLOWED AS DEDUCTION UNDER SEC TION 80P(2)(D) OF THE ACT. IN THE CASE OF VIR TRANSPORT OPERATORS CO-OP CREDIT SOCIETY, SUCH AMOUNT HAS BEEN QUANTIFIED AT RS.2,91,959/-. 6. THE LD.DR ON THE OTHER HAND, RELIED UPON ORDERS OF THE REVENUE AUTHORITIES, AND SUBMITTED THAT THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION ON INTEREST INCOME FROM SCHEDULED BANK AS WELL AS COO PERATIVE BANK UNDER SECTION 80P(2)(A)(I) AS WELL AS UNDER SECTION 80P(2 )(D) OF THE ACT. 7. ON DUE CONSIDERATION OF THE ABOVE FACTS AND CIRC UMSTANCES, WE ARE OF THE VIEW THAT AS FAR AS THE ISSUE REGARDING ADMISSI BILITY OF DEDUCTION OF INTEREST INCOME FROM SCHEDULED BANK UNDER SECTION 8 0P(2)(A)(I) IS CONCERNED THIS HAS BEEN SETTLED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF STATE BANK OF INDIA (SUPRA), AND THE ASSESSEE IS NO T ENTITLED FOR SUCH DEDUCTION. THIS PROPOSITION WAS NOT EVEN DISPUTED BY THE LD.COUNSEL FOR THE ASSESSEE. ONLY THING WHICH REQUIRES TO BE DONE IS RE-DETERMINATION OR QUANTIFICATION OF AMOUNT WHICH IS TO BE DISALLOWED OUT OF INTEREST INCOME FROM THE SCHEDULED BANK. THE LD.AO SHALL WORK OUT THE NET INTEREST INCOME ITA NO.2018, 2019 AND 97 /AHD/2017 5 FROM THE DEPOSITS WITH SCHEDULED BANK, AND THEREAFT ER EXCLUDE THAT AMOUNT FROM THE COMPUTATION OF DEDUCTION CLAIMED UNDER SEC TION 80P(2)(A)(I) OF THE ACT. AS FAR AS INTEREST INCOME FROM COOPERATIVE BA NK/SOCIETY IS CONCERNED IN VIEW OF THE DECISION OF CO-ORDINATE BENCH, SUCH INC OME WILL QUALIFY FOR GRANT OF DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT. T HE LD.AO SHALL WORK OUT NET AMOUNT OF SUCH INTEREST INCOME, AND THEREAFTER GRANT DEDUCTION UNDER SECTION 80(2)(D) OF THE ACT. 8. AS FAR AS ITA NO.97/AHD/2017 IS CONCERNED, IN TH IS YEAR ONLY DISPUTE IN THE PRESENT PROCEEDINGS IS ADMISSIBILITY OF DEDU CTION UNDER SECTION 80P(2)(D) OF THE ACT OF THE INTEREST INCOME EARNED FROM COOPERATIVE BANK/SOCIETY. QUA THIS ASPECT, THE AO SHALL FOLLOW THE SAME DIRECTIO N AS GIVEN IN ASSTT.YEAR 2014-15. 9. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOW ED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 9 TH JANUARY, 2020 AT AHMEDABAD. SD/- SD/- (WASEEM AHMED ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 09/01/2020