The ACIT,B.K.Circle, Palanpur V. The Arbuda Credit Co.Operative Society Ltd., Banaskantha

ITA 2231/AHD/2014

• Counselvise Citation: [2018] 130 COUNSELVISE.COM (IT) 0020 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 11 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 09-06-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 05-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: OM PRAKASH PATHAK

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBER & MS. MADHUMITA ROY, JUDICIAL MEMBER I.T.A. NO.2231/AHD/2014 AY 2011-12 AND CROSS OBJECTION NO.266/AHD/2014 AY 2011-12 ( IN ITA NO.2231/AHD/2014 AY 2011-12 ) THE ASSTT.CIT B.K. CIRCLE PALANPUR VS. THE ARBUDA CREDIT CO- OPERATIVE SOCIETY LTD. 1 ST FLOOR, TOWER GANJ BAZAR SHOPPING CENTRE DHANERA, DIST.BANASKANTHA [PAN NO. AAAAA 1251A] ( APPELLANT ) .. ( RESPONDENT & CROSS OBJECTOR ) REVENUE BY : SHRI OMPRAKASH PATHAK, SR.DR ASSESSEE BY : NONE DATE OF HEARING 09/07/2018 DATE OF PRONOUNCEMENT 11/ 07 /2018 O R D E R PER MS. MADHUMITA ROY - JM: THE INSTANT APPEAL AND THE CROSS OBJECTION HAVE B EEN PREFERRED BEFORE US BY THE REVENUE AND ASSESSEE RESPECTIVELY AGAINST THE ORDER DATED 07.05.2014 PASSED BY THE COMMISSIONER OF INCOME TAX(APPEALS)-XX, AHMEDABAD [LD.CIT(A) IN SHORT] FOR ASSESSMENT YEAR (AY) 2011-12 ARISING OUT OF THE ORDER DATED 28.01.2014 PASSED BY THE ACIT, B.K. CIRCLE, PALANPUR. 2. THE MAIN ISSUE RAISED IN THE MATTER RELATES TO T HE BENEFIT U/S.80P(2)(A)(I) AND U/S.80P(2)(D) OF THE INCOME TAX ACT, 1961 (HEREINAF TER REFERRED TO AS 'THE ACT'). - 2 - ITA NO.2231/AHD/2014 (BY REVENUE) & CO NO.266/AHD/2014 (BY ASSESSEE) ACIT VS. THE ARBUDA CREDIT CO-OP.SOCIETY LTD. ASST.YEAR 2011-12 3. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF ACCEP TING DEPOSITS FROM ITS MEMBERS AND PROVIDING CREDIT FACILITIES TO ITS MEMBERS AND CLAI MED DEDUCTION U/S.80P(2) OF THE ACT. 3.1. THE BRIEF FACTS LEADING TO THE CASE IS THIS TH AT THE ASSESSEE FILED ITS RETURN OF INCOME ON 05.10.2011 DECLARING TOTAL INCOME OF RS.NIL. TH E SAID RETURN WAS PROCESSED U/S.143(1) OF THE ACT AND UPON SCRUTINY NOTICE U/S.143(2) OF T HE ACT WAS ISSUED ON 27.09.2012 FOLLOWED BY 03.09.2013 ALONG WITH THE QUESTIONNAIRE CALLING FOR CERTAIN DETAILS. THE ASSESSEE PRODUCED THE AUDITED BOOKS OF ACCOUNTS WIT H THE P&L ACCOUNT, BALANCE-SHEET, CAPITAL ACCOUNT AND SUPPORTING BILLS & VOUCHERS WHI CH WERE EXAMINED BY THE AO ON TEST CHECK BASIS. 4. THE ASSESSEE HAS SHOWN GROSS TOTAL INCOME OF RS. 33,66,846/- AND CLAIMED DEDUCTION U/S.80P(2) OF THE ACT. UNDER A SHOW-CAU SE NOTICE DATED 17.01.2014, THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY THE DEDUCTI ON CLAIMED U/S.80P(2)(A)(I) AND U/S.80P(2)(D) OF THE ACT SHOULD NOT BE WITHDRAWN AS PER AMENDMENT. IN RESPONSE WHEREOF, THE ASSESSEE MADE THE FOLLOWING SUBMISSION: THE ARBUDA CREDIT CO-OPERATIVE SOCIETY LTD., DHAN ERA IS REGISTERED UNDER THE CO- OPERATIVE SOCIETY ACT, BEARING REGISTRATION NO. S-2 8761 DATED. 01/07/1996. THE CO-OPERATIVE CREDIT SOCIETY ARE ENTITLED A DEDU CTION U/S. 80P(2) AS OUR SOCIETY IS NOT A CO-OPERATIVE BANK REGISTERED UNDER THE BANKING RE GULATION ACT BUT REGISTERED UNDER THE CO-OPERATIVE SOCIETY ACT, SO ALL THE PROVISIONS OF COOPERATIVE SOCIETIES ACT ARE APPLICABLE. SINCE OUR CREDIT SOCIETY IS NOT A CO-OPERATIVE BANK AND CONSEQUENTLY NOT HIT BY PROVISIONS OF SECTION 80P(4) AND AS SUCH DEDUCTION U/S. 80P(2)(A)(I) WILL BE AVAILABLE TO IT FROM A. Y. 2007-08 AND ONWARDS AND ACCORDINGLY I T WAS LEGALLY CLAIMED BY US A CREDIT CO-OP. SOCIETY. FURTHER ACCORDING TO THE BY-LOWS OF THE CO-OPERATIV E CREDIT SOCIETY ONLY MEMBERS SHARE HOLDER ARE ENTITLED TO DEPOSIT OR RECEIVE LOAN FROM THE CREDIT SOCIETY AND THEREFORE PRINCIPAL OF MUTUALITY WILL APPLY AND AS SUCH EXEMP TION CLAIMED U/S. 80P(2)(A)(I) AND AS PER THE SAID PROVISIONS OUR SOCIETY IS DOING THE BU SINESS OF CREDIT FACILITIES TO MEMBERS ONLY AND THEREFORE EXEMPTION CLAIMED BY US IS TOTAL LY JUSTIFIED. IT IS PROVEN FACT THAT THE