The Sardar Co. Op. Credit Society Ltd., Mahisagar V. DCIT, Panchmahal Circle, Godhra

ITA 2037/AHD/2017

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9150 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 11-09-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Section: 80P

Judgement Text

, A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR ./ I.T.A. NO. 2037/AHD/2017 ( ASSESSMENT YEAR : 2014-15) THE SARDAR CO OP CREDIT SOCIETY LTD. 2 ND FLOOR, BORIYAWALA SHOPPING CENTRE, AT & POST LUNAWALA, DIST. MAHISANAGR / VS. DCIT PANCHMAHAL CIRCLE, GODHRA ./ ./ PAN/GIR NO. : AABAS5732K ( APPELLANT ) .. ( / RESPONDENT ) & ./ I.T.A. NO. 2038/AHD/2017 ( ASSESSMENT YEAR : 2014-15) THE CITIZENS CREDIT CO OP SOCIETY LTD. PARASPAR, PAVAGADH ROAD, HALOL 389350, PANCHMAHALS / VS. DCIT PANCHMAHAL CIRCLE, GODHRA ./ ./ PAN/GIR NO. : AABAT7221Q ( APPELLANT ) .. ( / RESPONDENT ) & ./ I.T.A. NO. 2039/AHD/2017 ( ASSESSMENT YEAR : 2014-15) SHREE RAM CO OP CREDIT SOCIETY SOCIETY LTD. CHAKALIYA ROAD, DAHOD 389151 DIST: DAHOD / VS. ITO WARD1, DAHOD ./ ./ PAN/GIR NO. : AAGAS4007A ( APPELLANT ) .. ( / RESPONDENT ) ITA NOS. 2037 TO 2040/AHD/17 (THE SARDAR CO OP CREDIT SOCIETY & ORS.] - 2 - & ./ I.T.A. NO. 2040/AHD/2017 ( ASSESSMENT YEAR : 2014-15) THE NAVDEEP CO OP. CREDIT SOCIETY LTD. COLLEGE ROAD, SANTRAMPUR, DIST: MAHISAGAR, GUJARAT 389260 / VS. DCIT PANCHMAHAL CIRCLE, GODHRA ./ ./ PAN/GIR NO. : AAAAT3708K ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI BANDISH SOPARKAR, A.R. / RESPONDENT BY : SHRI MUDIT NAGPAL, A.R. DATE OF HEARING 12/12/2018 !'# / DATE OF PRONOUNCEMENT 21/12/2018 / O R D E R PER PRADIP KUMAR KEDIA - AM: THE CAPTIONED APPEALS HAVE BEEN PREFERRED BY THE RE SPECTIVE ASSESSEES NAMED ABOVE FOR DIFFERENT ASSESSMENT YEAR S TABULATED HEREIN: SL. NO. ITA NO. NAME OF ASSESSEE AY CIT(A) ORDER DATED ASSESSMENT ORDER PASSED UNDER S. 143 (3) OF THE INCOME TAX ACT, 1961 (THE ACT) DATED 1 2037/AHD/2017 THE SARDAR CO OP CREDIT SOCIETY LTD. 2014-15 16.06.2017 08.11.2016 ITA NOS. 2037 TO 2040/AHD/17 (THE SARDAR CO OP CREDIT SOCIETY & ORS.] - 3 - 2 2038/AHD/2017 THE CITIZENS CREDIT CO OP SOCIETY LTD. 2014-15 15.06.2017 08.11.2016 3 2039/AHD/2017 SHREE RAM CO- OP CREDIT SOCIETY LTD. 2014-15 16.06.2017 03.10.2016 4 2040/AHD/2017 THE NAVDEEP CO OP CREDIT SOCIETY LTD. 2014-15 15.06.2017 09.11.2016 ITA NO. 2037/AHD/2017-AY 2014-15 (THE SARDAR CO.OP. CREDIT SOCIETY LTD.) 2. WHEN THE MATTER WAS CALLED FOR HEARING, THE L EARNED AR FOR THE ASSESSEE POINTED OUT THAT THE GRIEVANCES OF THE ASSESSEE ARE TWO FOLD; (I) CLAIM OF DEDUCTION OF 80P ON ACCOUNT OF INTEREST INCOME DERIVED FROM SCHEDULED BANKS AND CO-OPERATIV E BANKS HAVE BEEN DENIED BY THE REVENUE & (II) THE PROPORTI ONATE INTEREST EXPENDITURE ATTRIBUTABLE TO INTEREST INCOME FOR DED UCTION UNDER S.80P(2) OF THE ACT HAS BEEN DENIED AND REQUIRES TO BE CONSIDERED AND ONLY NET INTEREST INCOME CAN POSSIBLY BE SUBJEC TED TO TAX. THE LEARNED AR FOR THE ASSESSEE ACCORDINGLY SOUGHT SUIT ABLE RELIEF. 4. THE LEARNED DR FOR THE REVENUE RELIED UPON THE O RDER OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS. WE DO NOT FIND ANY MERIT IN THE PRINCIPAL PLEA LAID ON BEHALF OF THE A SSESSEE FOR ALLOWABILITY OF INTEREST DERIVED FROM DEPOSITS UNDE R S.80P(2)(A)(I) OF THE ACT AS ATTRIBUTABLE TO SURPLUS FUNDS WITH NA TIONALIZED BANKS IN VIEW OF THE SEVERAL DECISIONS INCLUDING THE DECI SION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF SBI EMPLOYEES CO- CREDIT & SUPPLY SOCIETY V. CIT (2016) 389 ITR 578. THUS, W E DECLINE TO ITA NOS. 2037 TO 2040/AHD/17 (THE SARDAR CO OP CREDIT SOCIETY & ORS.] - 4 - INTERFERE WITH THE ACTION OF THE REVENUE ON THIS SC ORE. AS REGARDS THE INTEREST DERIVED FROM DEPOSITS PLACED WITH THE CO-OPERATIVE BANKS, WE FIND MERIT IN THE PLEA OF THE ASSESSEE FO R ELIGIBILITY OF DEDUCTION IN VIEW OF SECTION 80P(2)(D) OF THE ACT W HERE THE DEPOSITS ARE PLACED WITH CO-OPERATIVE BANKS NOT UND ER THE CONTROL OF THE RESERVE BANK OF INDIA(RBI). THUS, IT WILL B E OPEN TO ASSESSEE TO DEMONSTRATE BEFORE THE AO THAT RECIPIEN T CO-OPERATIVE BANKS ARE NOT LICENSED BY RBI AND ARE MERE CO-OPERA TIVE SOCIETIES. TO THIS EXTENT, THE ISSUE IS REMANDED BACK TO AO FO R DECISION AFRESH. 6. WE FIND MERIT IN THE ALTERNATIVE PLEA OF THE ASS ESSEE FOR ALLOWABILITY OF EXPENDITURE ATTRIBUTABLE TO THE EAR NING OF SUCH INTEREST INCOME. THIS ASPECT HOWEVER WILL ALSO REQ UIRE FACTUAL VERIFICATION AND ACCORDINGLY REMITTED BACK TO THE F ILE OF THE AO FOR DETERMINING THE ALLOWABILITY OF EXPENDITURE ATT RIBUTABLE TO INTEREST EARNED ON DEPOSITS, IF ANY, WITH NATIONALI ZED BANKS OR OTHER ENTITIES KEEPING IN MIND THE RATIO OF THE DEC ISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. DR. V. P. GOPI NATHAN (2001) 116 TAXMAN 489 (SC). THE ASSESSEE SHALL BE AT LIBE RTY TO PROVIDE NEXUS OF INTEREST INCURRED WITH THAT OF INT EREST INCOME BEFORE AO FOR SEEKING RELIEF ON THIS SCORE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED. 8. THE FACTS AND CIRCUMSTANCES IN ITA NOS. 2038, 20 39 & 2040/AHD/2017 ARE SUBSTANTIALLY SIMILAR. THUS, IN PARITY WITH THE OBSERVATIONS MADE IN ITA NO. 2037/AHD/2017 (SUPRA), THE OTHER ITA NOS. 2037 TO 2040/AHD/17 (THE SARDAR CO OP CREDIT SOCIETY & ORS.] - 5 - THREE APPEALS FILED BY THREE DIFFERENT ASSESSEES AR E ALSO RESTORED TO THE FILE OF AO FOR FACTUAL VERIFICATION AND ARE PAR TLY ALLOWED. 9. IN THE RESULT, ALL THE APPEALS OF ASSESSEE CAPTI ONED ABOVE ARE PARTLY ALLOWED. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMA R KEDIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 21/12/2018 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 21/12/ 2018