DCIT, Circle-4(1), Bhubaneswar V. M/s. Orissa State Handloom Weavers Co-operative Society Ltd., Bhubaneswar

ITA 217/CTK/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 2401 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 30-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Benefit of exemption
• Section: 80P; 201; 251

Judgement Text

P A G E 1 | 4 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER AND LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO . 217 /CTK/201 7 ASSESSMENT YEAR : 201 2 - 2013 DCIT, CIRCLE 4(1), BHUBANESWAR. VS. M/S. ORISSA STATE HANDLOOM WEAVERS CO - OPERATIVE SOCIETY LTD., PT. J.N. MARG, BHUBANESWAR. PAN/GIR NO. AAAAO 0474 F (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : NONE REVENUE BY : SHRI SUBHENDU DUTTA, DR DATE OF HEARING : 28 / 11 / 201 9 DATE OF PRONOUNCEMENT : 28 / 1 1 / 201 9 O R D E R PER C.M.GARG,JM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT(A) - 2 , BHUBANESWAR DATED 17.2.2017 FOR THE ASSESSMENT YEAR 2012 - 13 . 2. NO ONE APPEARED ON BEHALF OF THE RESPONDENT ASSESSEE. HENCE, WE PROCEED TO DECIDE THE APPEAL OF THE REVENUE EXPARTE QUA THE RESPONDENT ASSESSEE AFTER HEARING LD D.R. AND ON THE BASIS OF MATERIALS AVAILABLE ON RECORD. 3 . THE EFFECTIVE GROUND OF TAKEN BY TH E REVENUE IN ITS APPEAL IS THAT THE CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.2,29,59,636/ - MADE BY P A G E 2 | 4 THE AO BY DISALLOWING THE DEDUCTION CLAIMED BY THE ASSESSEE IN RESPECT OF RENTAL INCOME RECEIVED FROM THE HOUSE PROPERTY NOT UTILISED FOR THE S PECIFIC PURPOSE OF STORAGE, PROCESSING OR FACILITATING THE MARKETING OF COMMODITIES. 4 . THE BRIEF FACTS OF THIS CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS SHOWN RENTAL INCOME OF RS.2,29,5 9,636/ - OUT OF LET OUT BUILDINGS / SHOPS WHICH AREN'T EVEN IN THE NATURE OF GODOWNS OR WAREHOUSES ETC. THE BUILDING LET OUT TO PARADEEP PHOSPHATES LTD. IS AN OFFICE ACCOMMODATION IN THE BUILDING KNOWN AS 'BOYANIKA' WHERE THE HEAD OFFICE OF THE ASSESSEE I S LOCATED. THE SBI ATM IS LOCATED AT THE SHOW CUM SALES ROOM OF THE ASSESSEE AT MARKET BUILDING, UNIT - II, BHUBANESWAR. LETTING OUT FOR THE PURPOSE OF EARNING RENTAL INCOME IS NOT THE OBJECTIVE OF THE ASSESSEE. THERE CANNOT BE ANY DOUBT THAT THE LEGISLATURE DESIRED TO EXTEND THE BENEFIT OF EXEMPTION OF THE WHOLE INCOME TO CO OPERATIVE SOCIETIES IF DERIVED FROM THE LETTING OF GODOWNS AND WAREHOUSES NEEDED FOR THE DEVELOPMENT OF RURAL ECONOMY. IT IS FOR THAT REASON THAT THE LEGISLATURE LIMITED THE BENEFIT TO I NCOME FROM GODOWNS AND WAREHOUSES, FOR IF IT WAS THE INTENTION OF THE LEGISLATURE TO EXTEND THE BENEFIT TO INCOME DERIVED BY THE LETTING OF SHOPS, ETC., NOTHING WOULD HAVE BEEN EASIER THAN TO SUBSTITUTE THE WORDS 'ANY PREMISES' FOR THE WORDS 'GODOWNS OR WA REHOUSES'. THE LEGISLATURE USED THE WORDS 'GODOWNS OR WAREHOUSES' BECAUSE THE INTENTION WAS TO ENCOURAGE CO - OPERATIVE SOCIETIES TO CONSTRUCT GODOWNS AND WAREHOUSES WHICH WOULD PROVE USEFUL TO THE P A G E 3 | 4 RURAL ECONOMY. HENCE, THE SCOPE OF GETTING EXEMPTION U/S 80P (2) IS NO WAY EXTENDED TO INCOME FROM LETTING OUT SURPLUS COMMERCIAL ASSETS WHICH ARE NOT MEANT FOR GODOWNS, WAREHOUSES & STORAGES ETC. BEFORE THE AO, THE ASSESSEE SUBMITTED THAT SURPLUS COMMERCIAL ASSETS IS BEING LET OUT TEMPORARILY, WHICH ACCORDING TO T HE AO ISN'T FACTUALLY CORRECT. IT IS TO BE STATED THAT ALL THE SAID ASSETS GIVEN UNDER RENT BY THE ASSESSEE MORE OR LESS ARE PERMANENT IN NATURE AND THE BUILDING I.E. BOYANIKA BHAWAN, PT. J N MARG, BBSR - 01 GIVEN ON RENT TO PARADEEP PHOSPHATE LTD. AND SBI ATM IS NEITHER AN ASSET MEANT FOR GODOWN, WAREHOUSES OR PROCESSING UNITS NOR THE SAME IS A SURPLUS ASSET GIVEN ON RENT TEMPORARILY TO THE AFORESAID PARTIES. IN THE INSTANT CASE, LETTING OUT PROPERTIES IS LYING BEYOND THE OBJECTS OF THE SOCIETY. IN VIEW OF ABOVE, THE ASSESSING OFFICER OPINED THAT THE ENTIRE RENTAL INCOME SHOWN AT RS. 2,29,59,636/ - IS CONSIDERED NOT ALLOWABLE DEDUCTION U/ S 80P(2) OF THE ACT AND THEREFORE ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE AS 'INCOME FROM OTHER SOURCES'. 5 . ON APPEAL, THE CIT(A). DELETED THE ADDITION FOLLOWING THE DECISION OF ITAT, CUTTACK IN THE CASE OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2003 - 04 IN ITA NO.184/CTK/2007 ORDER DATED 1.12.2008, WHICH IS SUPPORTED BY THE DECISION OF HONBLE SUPREME COURT IN THE CAS E OF CIT VS KARNATAKA STATE CO - OPERATIVE APEX BANK, 251 ITR 194 AND CIT VS BANGALORE DISTRICT CO - OPERATIVE BANK LTD., 233 ITR 282 (SC). P A G E 4 | 4 6. BEFORE US, LD D.R. COULD NOT CONTROVERT THE FINDINGS OF THE LD CIT(A) OR POINT OUT ANY DISTINGUISHING FEATURES TO N OT TO FOLLOW THE DECISION OF THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2002 - 03, WHICH THE CIT(A) HAS FOLLOWED. WE ALSO FIND THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISIONS OF HONBLE SUPREME COURT CITED SUPRA BY LD CIT(A). THEREFORE, W E FIND NO INFIRMITY IN THE ORDER OF THE LD CIT(A) TO INTERFERE AND ACCORDINGLY, WE DISMISS THE GROUND OF APPEAL OF THE REVENUE. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 28 / 1 1 /201 9 . S D/ - SD/ - (LAXMI PRASAD SAHU) ( CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER CUTTACK; DATED 28 / 1 1 /20 1 9 B. K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER SR . PVT. S ECRETARY ITAT, CUTTACK 1. THE APPELLANT : DCIT, CIRCLE 4(1), BHUBANESWAR 2. THE RESPONDENT. OSHWCS LTD. 3. THE CIT(A) - 2 , BHUBANESWAR 4. PR.CIT - 2 , BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//