The ITO, Ward-5(1), Baroda V. M/s. The Govt. Sevants Co.Op. Credit Society Ltd., Baroda

ITA 2221/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0245 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 03-11-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 02-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VILAS V SHINDE
• Section: 56

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ ITA NO. 2221/AHD/2013 / ASSESSMENT YEAR : 2010-11 THE INCOME TAX OFFICER, WARD-5(1), BARODA VS M/S. THE GOVT. SERVANTS CO. OP. CREDIT SOCIETY LTD., HINDI BHAVAN, SANSTHA VASAHAT, RAOPURA, BARODA-390001 PAN : AABAT 5146 J / (APPELLANT) / (RESPONDENT) REVENUE BY : SHRI VILAS V. SHINDE, SR DR ASSESSEE BY : NONE / DATE OF HEARING : 03/11/2016 / DATE OF PRONOUNCEMENT: 04/11/2016 / O R D E R PER R.P. TOLANI, JUDICIAL MEMBER:- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-V, BAR ODA DATED 05.06.2013 FOR ASSESSMENT YEAR 2010-11. 2. THE SOLITARY GROUND RAISED IS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LEARNED CIT(A) ERRED IN ALLOWING DEDUCTION OF RS.41,66,828/ - U/S 80P(2)(A)(I) OF THE IT ACT IN RESPECT OF INTEREST ON FIXED DEPOSITS WIT H BANKS, THOUGH SUCH INTEREST WAS NOT ATTRIBUTABLE TO THE ACTIVITY OF PR OVIDING CREDIT FACILITY TO MEMBERS OF ASSESSEE SOCIETY. 3. NONE APPEARED FOR THE ASSESSEE DESPITE SERVICE O F NOTICE. SINCE THE ISSUE IN QUESTION IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE, THE APPEAL IS BEING DECIDED EX-PARTE QUA ASSESSEE. SMC-ITA NO. 2221/AHD/2013 ITO VS. THE GOVT SERVANTS CO.OP CREDIT SOCIETY LTD AY : 2010-11 2 4. THE LD. CIT(A) HAS GIVEN A FINDING OF FACT THAT THE ASSESSEE, I.E., THE GOVERNMENT SERVANT CO. OP. CREDIT SOCIETY LTD WAS A CO-OPERATIVE CREDIT SOCIETY AND NOT A CO-OPERATIVE BANK. THIS FACT IS NOT DISPUTED. IN AY 2009- 10, THE RELIEF HAS BEEN GRANTED TO THE ASSESSEE. T HE LD. CIT(A) FURTHER RELIED ON ITAT, AHMEDABAD B BENCH DECISION IN THE CASE O F M/S. JAFARI MOMIN VIKAS CO-OP. CREDIT SOCIETY LTD VS. ITO IN ITA NO.1 491/AHD/2012. IN CONSIDERING ALL THESE FACTUAL AND LEGAL ASPECTS, TH E LD. CIT(A) ALLOWED THE ASSESSEES APPEAL BY FOLLOWING OBSERVATIONS:- 6. I HAVE CONSIDERED THE FACTS OF THE CASE AS WEL L AS THE OBSERVATION OF THE AO AND THE ARGUMENTS ADVANCED BY THE AR. I HAVE PE RUSED THE DECISIONS QUOTED BY THE APPELLANT INCLUDING THE DECISION OF H ONOURABLE ITAT, C BENCH AHMEDABAD IN CASE OF DHANLAXMI CO OP. CREDIT SOCIET Y LTD IN ITA NO.2342/AHD/2012 DT. 08.02.2013. I FIND THAT FACTS OF THE CASE OF DHANLAXMI CO OP. CREDIT SOCIETY LTD. ARE IDENTICAL WITH THE F ACTS OF THE CASE OF THE APPELLANT. IN THIS CASE ALSO THE APPELLANT WAS HAVI NG FUNDS WHICH INCLUDED INTEREST-BEARING DEPOSITS FROM THE MEMBERS, INTERES T OF THE CONTRIBUTION FROM MEMBERS AND ACCUMULATED PROFITS. IT HAD EARNED INTE REST FROM FDS IN BANKS OTHER THAN COOPERATIVE BANKS AND IT WAS THE PLEA OF THE APPELLANT COOPERATIVE SOCIETY THAT OPERATIONAL FUNDS WERE BEING MAINTAINE D AS SHORT-TERM DEPOSITS WITH THE BANKS TO MEET ANY EVENTUALITY TOWARDS THE PAYMENT OF DEPOSITS RECEIVED FROM THE MEMBERS. ON THESE SET OF FACTS, T HE HONOURABLE TRIBUNAL HAS HELD THAT THERE WERE NO SURPLUS FUNDS WITH THE APP ELLANT AND EVEN INTEREST IN RESPECT OF ACCUMULATED PROFITS AND RESERVE FUNDS C ANNOT BE TAXED UNDER SECTION 56 OF THE IT ACT. RESPECTFULLY FOLLOWING TH E DECISION OF HONOURABLE TRIBUNAL IN THE CASE OF DHANLAXMI CO OP. CREDIT SOC IETY LTD., THE DISALLOWANCE OF DEDUCTION UNDER SECTION 80 P IN RES PECT OF SUM OF RS.41,66,830/-MADE BY THE AO. IS HEREBY DELETED. 5. WE HAVE HEARD THE LD. DR, PERUSED THE MATERIAL A VAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W. THE FACT THAT THE ASSESSEE IS A CO-OPERATIVE CREDIT SOCIETY AND NOT A CO-OPERATIVE BANK IS NOT DISPUTED. IN VIEW THEREOF, THE JUDGMENT OF HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. JAFARI MOMIN VIKAS CO-OP CREDIT SOCIETY LTD, REPORTED IN SMC-ITA NO. 2221/AHD/2013 ITO VS. THE GOVT SERVANTS CO.OP CREDIT SOCIETY LTD AY : 2010-11 3 (2014) 362 ITR 331(GUJ.) AND THE ITAT DECISION IN T HE CASE OF DHANLAXMI CO OP. CREDIT SOCIETY LTD (SUPRA) ARE SQUARELY APPLICA BLE TO THE ASSESSEES CASE. WE, THEREFORE, DO NOT FIND ANY INFIRMITY IN THE ORD ER OF THE LD. CIT(A) WHICH IS UPHELD. 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 4 TH NOVEMBER, 2016 AT AHMEDABAD. SD/- SD/- (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER (R.P. TOLANI) JUDICIAL MEMBER AHMEDABAD; DATED 04 /11/2016 *BIJU T. / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD