ITO, Nashik V. M/s Shriman Suganmalji Surana, Nashik

ITA 2227/PUN/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 79764 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 26-12-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 08-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P L PATHADE
• Keywords: Depreciation

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO.2227/PN/2012 A.Y. 2008-09 ITO, WARD 1(4), NASHIK APPELLANT VS. M/S. SHRIMAN SUGANMALJI SURANA VYAPARI SAHA, PATHASANSTHA MARYADIT DEOLA, NASHIK. PAN: AABAS1045F RESPONDENT APPELLANT BY : SHRI P.L. P ATHADE RESPONDENT BY : SHRI PRA MOD S. SHINGTE DATE OF HEARING: 24.03.2014 DATE OF ORDER : 29.04.2014 ORDER PER SHAILENDRA KUMAR YADAV: THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-I, [(IN SHO RT CIT(A)], NASHIK, DATED 14.08.2012 FOR A.Y. 2008-09 ON THE FO LLOWING GROUNDS. 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD. CIT(A)-I, NASIK HAS ERRED IN DELETING THE ADDITION OF RS.13,96,077/- ON ACCOUNT OF INTEREST ON INVESTMENT OTHER THAN CO-OP. BANK, WHICH WAS HELD TO BE NOT EN TITLED FOR DEDUCTION U/S 80P BY THE AO AND TAXED UNDER THE HEAD INCOME FROM OTHER SOURCE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE T HE LD. CIT(A)-I, NASIK HAS ERRED IN DELETING THE ADDITION OF RS.13,164/- ON ACCOUNT OF LONG TERM CAPITAL GAIN. 2 3. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, MODIFY TH E GROUNDS OF APPEAL, IF CONSIDERED NECESSARY SUBSEQUE NTLY. 3. THE ASSESSEE IS A COOPERATIVE CREDIT SOCIETY PRO VIDING CREDIT FACILITIES TO ITS MEMBERS. THE ASSESSING OFFICER M ADE ADDITION ON ACCOUNT OF INTEREST FROM SBI AND DENA BANK AT 13,30,000/-, DD COMMISSION OF 47,099/-, INSURANCE COMMISSION OF 18,908/- AND LONG TERM CAPITAL GAIN OF 13,164/- AND TREATED THE DISALLOWANCES AS INCOME FROM OTHER SOURCES AND ASSESSED THE TOTAL INCOME OF ASSESSEE AT 14,09,170/-. 3.1 THE MATTER WAS CARRIED BEFORE FIRST APPELLATE A UTHORITY, WHEREIN THE VARIOUS CONTENTIONS WERE RAISED ON BEHA LF OF ASSESSEE AND HAVING CONSIDERED THE SAME, THE CIT(A) DIRECTED THE ASSESSING OFFICER TO ALLOW THE DEDUCTION U/S.80P(2) (A)(I). ACCORDINGLY, THE ADDITION OF 13,96,077/- WAS DELETED. THE SAME HAS BEEN OPPOSED BEFORE US ON BEHALF OF REVENU E, INTER ALIA SUBMITTED THAT THE CIT(A) WAS NOT JUSTIFIED IN DELE TING THE ADDITION OF 13,96077/- ON ACCOUNT OF INTEREST ON INVESTMENTS OTHER THAN COOPERATIVE BANK, WHICH WAS HELD TO BE N OT ENTITLED TO DEDUCTION U/S. 80P(2)(A)(I) BY ASSESSING OFFICER AN D TAXED UNDER THE HEAD INCOME FROM OTHER SOURCES. SO, REQUESTED TO RESTORE THE ORDER OF ASSESSING OFFICER ON THE ISSUE. ON THE OT HER HAND, THE LEARNED AUTHORIZED REPRESENTATIVE HAS SUPPORTED THE ORDER OF CIT(A) ON THE ISSUE. 3.2 AFTER GOING THROUGH THE RIVAL SUBMISSIONS AND M ATERIAL ON RECORD, WE FIND THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF ACCEPTING DEPOSITS FROM NON-SPECIFIED INSTRUMENTS. INCOME ON ACCOUNT OF DD COMMISSION, INSURANCE COMMISSION, INT EREST ON FDR WITH SBI AND DENA BANK WERE ATTRIBUTABLE TO NOR MAL BUSINESS CARRIED OUT BY THE ASSESSEE. THEREFORE, T HEY HAVE RIGHTLY CLAIMED AS EXEMPT U/S. 80P(2)(A)(I). THE A SSESSING OFFICER HAS DISALLOWED ALL THESE AMOUNTS ON THE GROUND THAT THESE ARE 3 INCOME FROM OTHER SOURCES, NOT ELIGIBLE FOR DEDUCTI ON U/S. 80P(2)(A)(I). THE PROVISIONS OF SECTION 80P(2)(A)( I) READS AS UNDER: 80P(1) WHERE, IN THE CASE OF AN ASSESSEE BEING A CO- OPERATIVE SOCIETY, THE GROSS TOTAL INCOME INCLUDES ANY INCOME REFERRED TO IN SUB-SECTION (2), THERE SHALL BE DEDUCTED, IN ACCORDANCE WITH AND SUBJECT TO THE PRO VISIONS OF THIS SECTION, THE SUMS SPECIFIED IN SUB-SECTION (2), IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE. (2) THE SUMS REFERRED TO IN SUB-SECTION (1) SHALL B E THE FOLLOWING NAMELY:- (A) IN THE CASE OF A CO-OPERATIVE SOCIETY ENGAGED IN (I) CARRYING ON THE BUSINESS OF BANKING OR PROVIDI NG CREDIT FACILITIES TO ITS MEMBERS. ACCORDINGLY, THE ASSESSING OFFICER WAS DIRECTED TO ALLOW THE DEDUCTION U/S. 80P(2) IN RESPECT OF DD COMMISSION O F 47,099/- INSURANCE COMMISSION OF 18,908/- AND INTEREST ON SBI AND DENA BANK OF 13,30,000/-. THIS VIEW IS FORTIFIED BY THE DECISION OF ITAT IN THE CASE OF ACIT VS. DISTRICT C O-OPERATIVE BANK LTD. 109 ITD 215, WHEREIN, DEALING WITH AN IDE NTICAL ISSUE, THE TRIBUNAL HELD THAT THE COMMISSION, LOCKER RENT, INTEREST ON INVESTMENT IN OTHER BANKS AND BONDS FROM GOVERNMENT SECURITIES, ETC. ARE PART OF BANKING BUSINESS AND A RE ENTITLED FOR DEDUCTION U/S.80P(2)(A)(I). IN VIEW OF ABOVE, THE CIT(A) WAS JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO ALL OW THE DEDUCTION U/S. 80P(2)(A)(I) AS CLAIMED BY THE ASSESSEE, WHICH NEEDS NO INTERFERENCE FROM OUR SIDE. WE UPHOLD THE SAME. 4. THE NEXT ISSUE IS WITH REGARD TO SALE OF VEHICLE TREATED BY THE ASSESSING OFFICER AS LONG TERM CAPITAL GAIN OF 13,164/-. THE ASSESSING OFFICER FOUND THAT THE SAID VEHICLE W AS INCLUDED IN BLOCK OF ASSETS AND DURING THE YEAR THE VEHICLE WAS SOLD. THE ASSESSING OFFICER WAS THEREFORE, MADE ADDITION STAT ING THAT AS THE VEHICLE WAS SOLD, IT RESULTED IN LONG TERM CAPITAL GAIN. IN THIS REGARD, THE ASSESSEE POINTED OUT THAT THE ASSESSING OFFICER HAS 4 IGNORED THE CONCEPT OF BLOCK OF ASSETS, WHICH HAS B EEN INTRODUCED FROM 01.04.1988. THE ASSESSEE CLAIMED T HAT AS THE BLOCK OF ASSETS CONTINUED EVEN AFTER THE SALE OF VE HICLE, THE DEPRECIATION WAS TO BE ALLOWED ON THE W.D.V. OF BLO CK OF ASSETS. IN THIS REGARD, THE ASSESSEE HAS RELIED ON VARIOUS DECISIONS. THE CIT(A), HAVING CONSIDERED THE SAME, HAS OBSERVED TH AT IN VIEW OF CONCEPT OF BLOCK OF ASSETS IN THE INCOME TAX ACT TH AT THE CONTENTION OF ASSESSEE THAT THE ASSETS SOLD HAS BEE N MERGED IN THE BLOCK OF ASSETS. HENCE, THE DEPRECIATION IS TO BE ALLOWED ON W.D.V. OF THE BLOCK OF ASSETS. THIS STAND WAS FOUN D JUSTIFIED BY THE CIT(A). ACCORDINGLY, THE ASSESSING OFFICER WAS DIRECTED TO DELETE THE ADDITION OF 13,164/- ON ACCOUNT OF SALE OF VEHICLE. THIS REASONED FINDING OF CIT(A) NEEDS NO INTERFEREN CE FROM OUR SIDE. WE UPHOLD THE SAME. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS THE 29 TH DAY OF APRIL, 2014. SD/- SD/- (R.K. PANDA) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 29 TH APRIL, 2014 GCVSR COPY TO:- 1) DEPARTMENT 2) ASSESSEE 3) THE CIT(A)-I, NASHIK 4) THE CIT-I, NASHIK 5) THE DR, A BENCH, I.T.A.T., PUNE. 6) GUARD FILE BY ORDER //TRUE COPY// SENIOR PRIVATE SECRETARY, I.T.A.T., PUNE