Vaishnavi Souhardha credit Co-operative Limited , Bangalore V. Income TAx Officer Ward-7(2)(1), Bangalore

ITA 2132/BANG/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4722 (ITAT-BANGALORE)
• Duration Of Justice: 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 06-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI
• Assessee Lawyers: K SESHADRI
• Keywords: Recovery proceedings; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-A BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 2132 / BANG/201 7 ASSESSMENT YEAR : 20 1 3 - 14 M/S. VAISHNAVI SOUHARDHA CREDIT CO-OPERATIVE LTD., 12/84, VAISHNAVI COMPLEX, I FLOOR, II MAIN, RBI COLONY, III BLOCK EAST, JAYANAGAR, BANGALORE 560 011. PAN: AAAAV8213F VS. THE INCOME TAX OFFICER, WARD 7 (2) (1), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI K. SESHADRI, CA RESPONDENT BY : SMT. PADMA MEENAKSHI, JCIT (DR) DATE OF HEARING : 0 8 . 0 5 .2018 DATE OF PRONOUNCEMENT : 0 1 . 0 6 .201 8 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)-7, BANGALORE DATED 24.08.2017FOR ASSESSMENT YEAR 2013-14. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE LEARNED CIT(A) ERRED IN SUSTAINING THE ASSES SMENT ORDER DENYING COMPLETE EXEMPTION OF THE APPELLANT'S INCOM E UNDER SECTION 80P(2)(A)(I). 2. THE LEARNED CIT(A) OUGHT TO HAVE FOLLOWED THIS H ONOURABLE TRIBUNAL'S ORDER AND HIS PREDECESSORS' ORDERS ON ID ENTICAL FACTS AND LAW IN THE APPELLANT'S OWN CASE AND ALLOWED THE COM PLETE EXEMPTION CLAIMED UNDER SECTION 80P(2)(A)(I). 3. THE LEARNED CIT(A) ERRED IN UPHOLDING THE LEARNE D AO'S FINDING THAT INTEREST INCOME TO THE TUNE OF RS.5,92,835/- I S NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80P(2)(D). 4. ALTERNATIVELY, THE LEARNED CIT(A) OUGHT TO HAVE ALLOWED A DEDUCTION ITA NO.2132/BANG/2017 PAGE 2 OF 4 FOR THE SAID INTEREST INCOME OF RS.5,92,835/-- UNDE R SECTION 80P(2)(A)(I). 5. CONSIDERING THAT THE FACTS EXTRACTED BY THE LEAR NED CIT(A) IN PARAGRAPH 4.3 OF THIS ORDER DO NOT RELATE TO THE AP PELLANT, THE LEARNED CIT(A) ERRED IN RELYING ON VARIOUS PRECEDENTS WITHO UT APPLICATION OF MIND AND WITHOUT APPRECIATING THAT THEY ARE DISTING UISHABLE FROM THE FACTS OF THE PRESENT CASE. 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, SUBSTITUTE AND FORGO, ANY OR ALL THE GROUNDS OF APPEAL AND ADDUCE ADDITIONAL EVIDENCE, BEFORE OR AT THE TIME OF THE HEARING. ALL GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT ONLY ONE DISALLOWANCE HAS BEEN MADE BY THE AO OF RS. 23,95,451/- IN RESPECT OF ASS ESSEES CLAIM FOR DEDUCTION U/S. 80P OF IT ACT. HE FURTHER SUBMITTED THAT THIS DISALLOWANCE WAS MADE BY THE AO BY FOLLOWING THE JUDGEMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF TOTGARS COOPERATIVE SALES SOCIETY LTD VS. INCOME TA X OFFICER AS REPORTED IN 322 ITR 283 (SC). HE FURTHER SUBMITTED THAT THE AO HAS NOTED ON PAGE NO. 7 OF THE ASSESSMENT ORDER THAT AS PER THE JUDGMENT OF HO N'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF CIT VS. SRI BILURU GU RUBASAVA PATTINA SAHAKARI SANGHA NIYAMITHA (369 ITR 86)(KAR), THE ISSUE REGAR DING THE ALLOWABILITY OF DEDUCTION U/S. 80P UNDER SIMILAR FACTS IS COVERED I N FAVOUR OF THE ASSESSEE BUT THE AO HAS NOTED THAT THE DEPARTMENT IS IN FURTHER APPEAL BEFORE THE HONBLE APEX COURT AGAINST THIS JUDGMENT OF HON'BLE KARNATA KA HIGH COURT AND THE SAME IS PENDING BEFORE HONBLE APEX COURT AND THERE FORE, IN ORDER TO KEEP THE MATTER ALIVE, DEDUCTION CLAIMED U/S. 80P(2) IS DISA LLOWED. HE ALSO POINTED OUT THAT THE AO HAS ALSO NOTED THAT NO RECOVERY OF TAX ARISING OUT OF THE SAME WILL BE MADE TILL THE FINALIZATION OF THE ORDER BY THE H ONBLE APEX COURT. HE FURTHER SUBMITTED THAT AGAINST THIS ASSESSMENT ORDER, THE A SSESSEE CARRIED THE MATTER IN APPEAL BEFORE CIT(A). HE HAS FOLLOWED A LATER J UDGEMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF THE CITIZEN CO-OPERAT IVE SOCIETY LTD. VS. ACIT AS REPORTED IN 397 ITR 1. BUT HE SUBMITTED THAT TH IS JUDGEMENT OF HONBLE APEX COURT IS NOT APPLICABLE IN THE FACTS OF THE PRESENT CASE. HE ALSO POINTED OUT THAT THERE IS NO DISCUSSION IN THE ORDER OF CIT(A) REGAR DING THE COMPARABILITY OF THE FACTS OF THE PRESENT CASE WITH THE FACTS OF THAT CA SE AND THEREFORE, IN RESPECT OF ITA NO.2132/BANG/2017 PAGE 3 OF 4 APPLICABILITY OF THIS JUDGEMENT OF HONBLE APEX COU RT, THE ISSUE SHOULD BE RESTORED BACK TO THE FILE OF CIT(A) FOR FRESH DECIS ION BY WAY OF A SPEAKING AND REASONED ORDER AFTER COMPARING THE FACTS OF PRESENT CASE WITH THE FACTS OF THAT CASE. 4. REGARDING THE JUDGEMENT OF HONBLE APEX COURT RE NDERED IN THE CASE OF TOTGARS COOPERATIVE SALES SOCIETY LTD VS. INCOME TA X OFFICER (SUPRA), HE SUBMITTED THAT THE JUDGEMENT OF HON'BLE KARNATAKA H IGH COURT RENDERED IN THE CASE OF PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY AS REPORTED IN 395 ITR 611 (KARN) IS ON THE SAME LINE AND IN TH IS CASE, AND IN THE CASE OF HONBLE APEX COURT BOTH, THE ISSUE REGARDING ALLOWA BILITY OF DEDUCTION U/S. 80P IN RESPECT OF INTEREST INCOME FROM BANK HAS BEEN DE CIDED AGAINST THE ASSESSEE UNDER THE FACTS THAT THE INVESTMENT IN BANK WAS MAD E BY THE ASSESSEE OUT OF LIABILITY AND NOT OUT OF ASSESSEES OWN FUNDS. HE FURTHER SUBMITTED THAT IN THE JUDGEMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO AS REPORTED IN 230 TAXMAN 309, THE ISSUE REGARDING ALLOWABILITY OF DED UCTION U/S. 80P IN RESPECT OF INTEREST FROM BANK HAS BEEN DECIDED IN FAVOUR OF TH E ASSESSEE BECAUSE IN THAT CASE, IT WAS FOUND THAT THE AMOUNT DEPOSITED IN BAN K WAS OUT OF ASSESSEES OWN FUNDS AND NOT OUT OF ASSESSEES LIABILITY. HE SUBMITTED THAT THEREFORE, REGARDING APPLICABILITY OF JUDGEMENT OF HONBLE APE X COURT AND JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE O F PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY (SUPRA) AND TUMK UR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO (SUPRA), THE MATTER SHOULD BE RESTORED BACK TO THE FILE OF CIT (A) FOR FRESH DECISION IN THE LIGHT OF THE RELEVANT FACTS OF THE PRESENT CASE AND THE RATIO OF THESE JUDGEMENTS. TH E LD. DR OF REVENUE SUPPORTED THE ORDER OF CIT(A). 5. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND IN T HE FACTS OF THE PRESENT CASE AS DISCUSSED ABOVE, I FEEL IT PROPER TO RESTORE THE MA TTER BACK TO THE FILE OF CIT(A) FOR FRESH DECISION WITH THE DIRECTION THAT REGARDIN G THE APPLICABILITY OF JUDGEMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF THE C ITIZEN CO-OPERATIVE SOCIETY LTD. VS. ACIT (SUPRA), HE SHOULD PASS A SPEAKING AN D REASONED ORDER AFTER ITA NO.2132/BANG/2017 PAGE 4 OF 4 COMPARING THE FACTS OF THE PRESENT CASE WITH THE FA CTS OF THAT CASE. MOREOVER, REGARDING APPLICABILITY OF JUDGEMENT OF HONBLE APE X COURT RENDERED IN THE CASE OF TOTGARS COOPERATIVE SALES SOCIETY LTD VS. INCOME TAX OFFICER (SUPRA) OR OF JUDGEMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY (SUP RA) AND TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO (SUPRA) ALSO, THE ISSUE SHOULD BE DECIDED BY CIT(A) AFTER FINDING OUT THE R ELEVANT FACTS OF THE PRESENT CASE IN THE LIGHT OF THESE JUDGEMENTS. IF IT IS FO UND THAT THE FACTS OF PRESENT CASE ARE IN LINE WITH THE FACTS IN THE CASE OF PCIT AND ANOTHER VS. TOTAGARS CO- OPERATIVE SALE SOCIETY (SUPRA), THEN THE ISSUE SHOU LD BE DECIDED AGAINST THE ASSESSEE BUT IF IT IS FOUND THAT THE FACTS OF THE P RESENT CASE ARE IN LINE WITH THE FACTS IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CRED IT COOPERATIVE LTD. VS. ITO (SUPRA), THEN THE ISSUE SHOULD BE DECIDED IN FA VOUR OF THE ASSESSEE. NEEDLESS TO SAY, CIT(A) SHOULD PROVIDE REASONABLE O PPORTUNITY OF BEING HEARD TO BOTH SIDES. 6. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 01 ST JUNE, 2018. /MS/ 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.