M/s. University of Agricultural Employees House Building Co-operative Limited, Bangalore V. Assistant Commissioner Of Income Tax, Circle- 6(3)(1), Bangalore

ITA 2268/BANG/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 2451 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Appeal Filed On: 28-10-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: P.R SURESH
• Section: 154; 143(3); 80P; 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, A BENCH : BANGALORE BEFORE SHRI B.R BASKARAN , ACCOUNTANT MEMBER ITA NO.2268/BANG/2019 ASSESSMENT YEAR : 2016-17 UNIVERSITY OF AGRICULTURAL EMPLOYEES HOUSE BUILDING CO-OP SOCIETY LTD., UNIVERSITY OF AGRICULTURE, HEBBAL, BENGALURU NORTH, BENGALURU. PAN AAAAU 3878 K VS. THE ASST. COMMISSIONER OF INCOME-TAX, CIRCLE-6(3)(1), BENGALURU. APPELLANT RESPONDENT APPELLANT BY : SHRI P.R SURESH, C.A RESPONDENT BY : SHRI GANESH R GHALE, ADVOCATE STANDING COUNSEL TO D EPT. DATE OF HEARING : 28.11.2019 DATE OF PRONOUNCEMENT : 03.12.2019 O R D E R PER B.R BASKARAN, ACCOUNTANT MEMBER THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 29-08-2019 PASSED BY LD CIT(A)-6, BENGALURU AND IT RELATES TO THE ASSESSMENT YEAR 2016-17. THE GROUNDS OF APPEAL URG ED BY THE ASSESSEE READ AS UNDER:- 1. THE ORDER OF APPEAL OF THE LEARNED CIT(A), BENGALURU 6, BENGALURU PASSED UNDER SECTION 250 THE ACT IN SO FAR AS IT IS AGAINST THE APPELLANT IS OPP OSED TO ITA NO.2268 /BANG/2019 PAGE 2 OF 8 LAW, EQUITY, WEIGHT OF EVIDENCE, FACTS AND CIRCUMSTANCES IN THE APPELLANT'S CASE. 2. THE LEARNED CIT(A), BENGALURU - 6 , BENGALURU HA S ERRED IN LAW IN NOT ADJUDICATING ON GROUNDS 1, 2, 3 &5OF THE APPEAL FILED. 3. THE LEARNED CIT(A) BENGALURU - 6, BENGALURU IS N OT JUSTIFIED IN LAW IN DENYING THE ELIGIBLE DEDUCTION CLAIMED BY THE APPELLANT AS PER PROVISIONS OF SECTI ON 80P(2)(D) OF THE ACT, ON MERITS. 4. THE ORDER OF ASSESSMENT PASSED BY THE LEARNED ASSESSING OFFICER IS BAD IN LAW IN ADDING A SUM OF RS.21,99,628 AS 'INCOME FROM OTHER SOURCES', VOLUNTARILY DISCLOSED BY THE APPELLANT IN HIS RETUR N OF INCOME, AS AGAINST HIS PROPOSITION TO DISALLOW DEDUCTION CLAIMED UNDER SECTION 80P(2)(D) BY THE APPELLANT. 5. THE APPELLANT DENIES ITSELF LIABLE TO BE ASSESSE D ON TOTAL INCOME OF RS. 43,99,256/- AS DETERMINED BY TH E LEARNED ASSESSING OFFICER AS AGAINST THE RETURNED INCOME BY THE APPELLANT OF RS. NIL!- UNDER THE FACT S AND CIRCUMSTANCES OF THE CASE. 6. THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW A ND FACTS OF THE CASE, FAILED TO APPRECIATE THAT THE IN TEREST INCOME EARNED BY THE APPELLANT OUT OF THE DEPOSITS KEPT IN THE CO-OPERATIVE BANKS ARE ALL OUT OF THE MONIES OF THE MEMBERS OF THE APPELLANT SOCIETY, AND ARE NOT O UT OF ANY LIABILITY DUE BY THE SOCIETY, CONSEQUENTLY T HE AO OUGHT TO HAVE ALLOWED DEDUCTION UNDER SECTION ITA NO.2268 /BANG/2019 PAGE 3 OF 8 80P(2)(D) ON SUCH INTEREST INCOME EARNED BY THE APPELLANT, PER LAW ON FACTS AND CIRCUMSTANCES OF TH E CASE. 7. THE LEARNED ASSESSING OFFICER ERRED IN LAW IN FA ILING TO CONSIDER APPELLANTS SUBMISSION OF FACTS OF THEIR CASE BEING IDENTICAL TO M!S. TUMKUR MERCHANTS SOUHARDA CREDIT CO-OPERATIVE DECISION OF HON'BTE HIGH COURT OF KARNATAKA, CONSEQUENTLY DEDUCTION UNDER SECTION 80P(2)(D) WAS NOT TO BE DENIED TO THE APPELLANT. 8. THE LEARNED ASSESSING OFFICER HAS ERRED IN LAW I N DISALLOWING THE APPELLANTS CLAIM UNDER SECTION 80P(2)(D) IN VIEW OF THE HON'BLE SUPREME COURT DECI SION IN TOTGARS SALES CO-OPERATIVE LTD IN VS ITO REPORTE D IN 322 ITR 283 BEEN DISTINGUISHED IN DECISION OF KARNATAKA HIGH COURT IN TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD VS ITO, TUMKUR (ITA NO.307 O F 2014) AND IN CATENA OF CASES OF THIS HON'BLE BENCH IN M/S. KANYAKAPARAMESWARI CREDIT COOPERATIVE SOCIETY LTD VS ITO IN ITA NO.2900/BANG/2017 DATED 22.03.2018. 9. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER AS PER THE PARITY OF REASONING OF THE DECISION OF THE HON' BLE APEX COURT IN THE CASE OF KARANVIR SINGH 349 ITR 69 2, THE APPELLANT DENIES ITSELF LIABLE TO BE CHARGED TO INTEREST UNDER SECTION 234A & 234 B OF THE INCOME T AX ACT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. 10. THE APPELLANT CONTENDS THAT THE LEVY OF INTERES T UNDER SECTION 234A & 234 B OF THE ACT IS ALSO BAD I N ITA NO.2268 /BANG/2019 PAGE 4 OF 8 LAW AS THE PERIOD, RATE, QUANTUM AND METHOD OF CALCULATION ADOPTED BY THE LEARNED ASSESSING OFFICE R ON WHICH INTEREST IS LEVIED ARE NOT DISCERNIBLE AND AR E WRONG ON THE FACTS OF CASE. 11.THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND, SUBSTITUTE OR DELETE ANY OR ALL OF THE GROUNDS OF A PPEAL URGED ABOVE. 12. FOR THE ABOVE AND OTHER GROUNDS TO BE URGED DUR ING THE COURSE OF HEARING OF THE APPEAL THE APPELLANT P RAYS THAT THE APPEAL BE ALLOWED IN THE INTEREST OF EQUIT Y AND JUSTICE. 3. THE ASSESSEE IS A CO-OPERATIVE SOCIETY. THE ASSESSMENT OF THE YEAR UNDER CONSIDERATION WAS COMPLETED BY THE AO U/ S 143(3) OF THE ACT ON 13-12-2018. THE ASSESSEE HAD CLAIMED DE DUCTION U/S 80P(2)(D) OF THE ACT IN ITS RETURN OF INCOME IN RES PECT OF INTEREST INCOME EARNED BY IT FROM DEPOSITS KEPT WITH CO-OPER ATIVE BANKS. THE INTEREST INCOME WAS RS.23,14,771/- AND THE BUSI NESS LOSS WAS RS.1,15,143/-. AFTER SETTING OFF BUSINESS LOSS AGA INST INTEREST INCOME, THE GROSS TOTAL INCOME WAS ARRIVED AT RS.21 ,99,628/-. IN THE STATEMENT OF TOTAL INCOME, THE ASSESSEE HAS SHO WN DEDUCTION ELIGBLE U/S 80P OF THE ACT AT RS.49,28,237/-, BUT R ESTRICTED THE SAME TO THE AMOUNT OF GROSS TOTAL INCOME OF RS.21,9 9,628/-. ACCORDINGLY THE TOTAL INCOME WAS DETERMINED AT NIL. THE AO, HOWEVER, PRESUMED THAT THE ASSESSEE HAS CLAIMED DED UCTION U/S 80P OF THE ACT AT RS.49,28,237/-. THE AO, BY PLAC ING RELIANCE ON THE DECISION RENDERED BY HON'BLE KARNATAKA HIGH COU RT IN THE CASE OF THE PR. COMMISSIONER OF INCOME TAX VS. THE TOTGA RS CO-OPERATIVE ITA NO.2268 /BANG/2019 PAGE 5 OF 8 SALE SOCIETY, SIRSI (CITATION NOT GIVEN) AND THE DE CISION RENDERED BY HON'BLE SUPREME COURT IN THE CASE OF TOTGARS CO-OP ERATIVE SALE SOCIETY LTD (CITATION NOT GIVEN), HELD THAT THE ASS ESSEE IS NOT ENTITLED FOR DEDUCTION U/S 80P OF THE ACT. THOUGH THE AO HA S STATED IN PARAGRAPH 9 OF ITS ORDER THAT HE IS ADDING AN AMOUN T OF RS.21,99,628/- AS INCOME FROM OTHER SOURCES, YET W HILE COMPUTING TOTAL INCOME THE AO DETERMINED TOTAL INCOME AT RS.4 3,99,256/- (RS.45,14,399/- LESS SET OFF OF CURRENT YEAR LOSS O F RS.1,15,143/-) 4. THEREAFTER, THE ASSESSEE FILED A RECTIFICATI ON PETITION U/S 154 OF THE ACT BEFORE THE ASSESSING OFFICER, WHEREIN IT WA S POINTED OUT THAT (A) THE AO HAVING STATED THAT HE IS ADDING A SUM OF RS.21,99,628/- HAS ACTUALLY ADDED RS.45,14,399/- RE SULTING IN EXCESS ASSESSMENT OF RS.23,14,771/-. (B) THE ASSESSEE HAS DEPOSITED ITS SURPLUS FUNDS O NLY BY WAY OF INVESTMENTS AND HENCE INTEREST INCOME IS DEDUCTI BLE U/S 80P(2)(D) OF THE ACT. IT WAS SUBMITTED THAT THIS V IEW IS SUPPORTED BY THE DECISION RENDERED BY BANGALORE BEN CH OF ITAT IN THE CASE OF KANYAKAPARAMESWARI CREDIT CO-OP ERATIVE SOCIETY LETD (ITA NO.2900/BANG/2017 DATED 22-03-201 8). HOWEVER, THE AO REJECTED THE RECTIFICATION PETITION FILED BY THE ASSESSEE. 5. THE ASSESSEE CHALLENGED THE RECTIFICATION PE TITION FILED BY THE ASSESSEE BY FILING APPEAL BEFORE LD CIT(A). WITH R EGARD TO THE FIRST MISTAKE STATED AS ITEM (A) IN THE PRECEDING PARAGRA PH, THE FIRST APPELLATE AUTHORITY DIRECTED THE AO TO RECTIFY THE MISTAKE REGARDING ITA NO.2268 /BANG/2019 PAGE 6 OF 8 THE QUANTUM OF ADDITION MADE IN THE COMPUTATION OF STATEMENT. WITH REGARD TO THE SECOND MISTAKE STATED AS ITEM (B ) IN THE PRECEDING PARAGRAPH, THE LD CIT(A) HELD THAT THE SA ME IS DEBATABLE IN NATURE AND HENCE THE SAME WOULD FALL OUTSIDE PUR VIEW OF SEC.154 OF THE ACT. ACCORDINGLY, THE LD CIT(A) ALLOWED THE APPEAL OF THE ASSESSEE IN PART. THE ASSESSEE IS AGGRIEVED BY THE DECISION RENDERED BY LD CIT(A) ON THE SECOND ISSUE. 6. IT IS PERTINENT TO NOTE THAT THE ASSESSEE D ID NOT PREFER SEPARATE APPEAL AGAINST THE ORIGINAL ASSESSMENT ORDER PASSED U/S 143(3) OF THE ACT. THE LD A.R APPEARING BEFORE ME SUBMITTED THAT THE GROUNDS OF APPEAL RAISED BEFORE LD CIT(A) WERE RELA TED TO BOTH THE ORDERS PASSED U/S 143(3) AS WELL AS U/S 154 OF THE ACT. 7. AS NOTICED EARLIER, THE LD CIT(A) HAS CONSI DERED ONLY THE ORDER PASSED BY THE AO U/S 154 OF THE ACT. ACCORDINGLY H E HAS DIRECTED THE AO TO RECTIFY THE MISTAKE WITH REGARD TO THE QU ANTUM OF ADDITION. WITH REGARD TO THE CLAIM FOR DEDUCTION U /S 80P(2)(D) OF THE ACT, THE LD CIT(A) HAS HELD THAT THE SAID CLAIM IS DEBATABLE IN NATURE. 8. I HAVE CONSIDERED RIVAL SUBMISSIONS. IN MY VIEW, THERE IS NO INFIRMITY IN THE ORDER PASSED BY LD CIT(A), AS THE SECOND ISSUE IS DEBATABLE IN NATURE AND HENCE THE SAME WOULD FALL O UTSIDE THE PURVIEW OF SEC.154 OF THE ACT. ACCORDINGLY, I CONF IRM THE ORDER PASSED BY LD CIT(A). ITA NO.2268 /BANG/2019 PAGE 7 OF 8 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD DECEMBER, 2019. SD/- (B.R BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED, THE 3RD DECEMBER, 2019. /VMS/ COPY TO: 1. APPELLANT (S) / CROSS OBJECTOR(S) 2. RESPONDENT(S) 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE ITA NO.2268 /BANG/2019 PAGE 8 OF 8 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE.. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DICTATION NOTE ENCLOSED DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. .. 14. DICTATION NOTE ENCLOSED