Asstt. Commissioner of Income tax, Hoshiarpur V. The Hoshiarpur Central Coop. Bank, Hoshiarpur

ITA 232/ASR/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5780 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 01-11-2010
• Assessment Year: 1994-1995
• Appeal Filed On: 17-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIK CHAND
• Assessee Lawyers: ANAND M CHOPRA
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.L. KARWA, VICE PRESIDENT AND SH. MEHAR SINGH, ACCOUNTANT MEMBER I.T.A. NO. 232(ASR)/2010 ASSESSMENT YEAR:1994-95 PAN : NIL ASSTT. COMMR. OF INCOME-TAX, VS. THE HOSHIARPUR CEN TRAL CO-OP.BANK, HOSHIARPUR CIRCLE, HOSHIARPUR. HOSHIARPUR. (APPELLANT) (RESPONDENT) DEPARTMENT BY:SH. AMRIK CHAND, DR ASSESSEE BY:SH. ANAND M. CHOPRA, CA ORDER PER MEHAR SINGH, AM, BY THIS ORDER, WE SHALL DISPOSE OF THIS APPEAL OF THE REVENUE FILED AGAINST THE ORDER OF CIT (A), JALANDHAR, DATED 22. 02.2010, PASSED UNDER SECTION 250(6) OF THE INCOME-TAX ACT, 1961 (HEREINA FTER REFERRED TO IN SHORT THE ACT) FOR THE ASSESSMENT YEAR 1994-95. 2. IN THIS APPEAL, THE REVENUE HAS RAISED FOLLOWING TWO EFFECTIVE GROUNDS: 1. THAT, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN ALLOWING DEDUCTION U/S 90P OF T HE ACT ON NON-ELIGIBLE PAYMENTS. 2 1(A) WHILE ALLOWING DEDUCTION U/S 80P ON NON STATUT ORY RESERVES THE LD. CIT(A) HAS FAILED TO APPRECIATE THE FACT THAT T HE HONBLE SUPREME COURT IN THE CASE OF CIT VS. KARNATAKA STAT E CO- OPERATIVE BANK 251 ITR 194 HAS REMANDED THE MATTER CONCERNING INTEREST INCOME ON NON STATUTORY RESERVE S TO THE FILE OF THE LD. CIT(A) TO ASCERTAIN WHETHER THE INCOME F ROM INVESTMENTS OF VOLUNTARY RESERVES WAS UTILIZED IN T HE COURSE OF ORDINARY BANKING RESERVES BUSINESS. 2. THE LD. CIT(A) HAS FURTHER ERRED IN VIEW OF THE FOLLOWING FACTS AND CIRCUMSTANCES: (I) THE LD. CIT(A) HAS GONE BEYOND THE SCOPE OF TH E SECTION 154 WHERE AN ORDER PASSED BY IT CAN BE RECTIFIED AN D NOT AN ORDER PASSED BY THE LOWER AUTHORITY. THE ASSESSEE H AD CHALLENGED THE SO CALLED LETTER OF THE AO WRITTEN O N 8.3.2005, DISPOSING OF RECTIFICATION APPLICATION OF THE ASSES SEE FILED ON 23.2.2009. IF THE SO CALLED LETTER IS TREATED A AN ORDER, THE LD. CIT(A) WOULD HAVE BEEN FAIR TO DIRECT FOR CARRYING OUT THE RECTIFICATION AFTER GOING THROUGH FACTS OF THE CASE AND NOT STRAIGHTWAY ALLOW THE RELIEF TO THE ASSESSEE AGAINS T ORDER PASSED U/S 143(3) OF THE ACT. (II) IT IS A FACT THAT ALL THE ISSUES AND LEGAL PR ONOUNCEMENTS INCLUDING THAT OF HONBLE SUPREME COURT TAKEN UP BY THE ASSESSEE HAVE BEEN DULY DISCUSSED IN THE ASSESSMENT ORDER AND THERE WAS NO SUCH LEGAL OR FACTUAL ERROR PRIMA FACI E APPARENT FROM THE RECORDS, WHICH COULD HAVE BEEN RECTIFIED U /S 154 OF THE ACT. AS A MATTER OF FACT, THE RELEVANT FACTS OF THE CASE WERE DULY DISCUSSED AND DISTINGUISHED FROM THE FACTS OF THE C ASES RELIED UPON BY THE ASSESSEE. EVEN THE ASSESSEE COULD NOT D RAW DIRECT ANALOGY FROM THE CASE OF THE NAWANSHAHAR CENTRAL CO OP BANK BECAUSE OF CLEARLY DISTINGUISHABLE FACTS AND THE VE RY BASIS OF THESE INVESTMENTS MADE BY THE ASSESSEE. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CO-OPERATIVE BANK AND IN THE RETURN OF INCOME FILED HAD CLAIMED DEDUCTION IN RESPECT OF INTEREST ON IDBI BOUNDS ON THE GROUND THAT THE SAME FORMED PAR T OF THE PROFIT FROM 3 BANKING BUSINESS. SUCH DEDUCTION WAS CLAIMED U/S 80 P(2)(A)(I) OF THE INCOME-TAX ACT. HOWEVER, THE AO WAS OF THE VIEW THA T INTEREST INCOME FROM IDBI BOUNDS DID NOT QUALIFY FOR DEDUCTION U/S 80P( 2)(A)(I) IN VIEW OF THE JUDGEMENT OF HONBLE SUPREME COURT IN THE CASE OF MADHYA PRADESH CO- OPERATIVE BANK LTD; VS. ADDL. CIT, 218 ITR 438. AC CORDINGLY, THE AO DISALLOWED THE CLAIM BY TREATING THE INTEREST INCOM E ON INVESTMENT IN IDBI BONDS AMOUNTING TO RS. 49 LACS AS INCOME FROM OTHER SOURCES. 4. BEING AGGRIEVED, THE ASSESSEE FILED AN APPEAL B EFORE THE CIT(A), WHO ALLOWED THE SAME BY RELYING ON THE ORDER IN THE CA SE OF THE ASSESSEE FOR THE ASSESSMENT YEARS 1990-91, 1991-92, 1992-93, 1993-94 , 1995-96, 1996-97 AND 1997-98. THE REVENUE IS AGGRIEVED BY THE ORDER OF THE CIT(A). HENCE, THIS APPEAL BEFORE THE BENCH. 3. IN THE COURSE OF PRESENT APPELLATE PROCEEDINGS, BOTH THE LD. DR AND LD. COUNSEL FOR THE ASSESSEE CONCEDED THAT THE ISSU E IN DISPUTE STANDS ALREADY ADJUDICATED BY THE ITAT, AMRITSAR BENCH, I N ASSESSEES OWN CASE IN APPEAL NOS.328/ASR/2000 FOR A.Y. 1996-97, 400/AS R//2000 FOR A.Y. 1997-98, 525/ASR/2000 FOR A.Y. 1993-94, 292/ASR/200 4 FOR THE A.Y. 1991- 92, 286/ASR/2000 FOR A.Y. 1996-97, IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE, BY HOLDING THAT INTEREST INCOME OF A CO-OP ERATIVE BANK FROM IDBI AND PSEB BONDS IS ELIGIBLE FOR DEDUCTION UNDER SECT ION 80P(2)(A)(I) OF THE ACT. 3.1. THE LD. COUNSEL ALSO PLACED RELIANCE ON THE DE CISION OF ITAT AMRITSAR BENCH, IN THE CASE OF THE NAWANSHHAR CEN TRAL CO-OP BANK LTD. (ITA NO.537/ASR/1997 FOR THE A.Y. 1994-95), WHEREIN IT HAS BEEN HELD THAT THAT DEDUCTION U/S 80P(2)(A)(I) IS AVAILABLE FOR SU CH INTEREST. 4 3.2. HE, FURTHER, PLACED RELIANCE ON THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT, IN THE CASE OF CIT VS. THE NAWA NSHHAR CENTRAL CO-OP BANK LTD. (INCOME TAX APPEAL NO.155 OF 2002 FOR THE A.Y. 1994-95), ORDER DATED 6 TH JANUARY, 2003, WHEREIN THE HIGH COURT, HAS CLEARLY HELD THAT DEDUCTION U/S 80P(2)(A)(I) IN RESPECT OF INCOME DER IVED FROM THE BONDS IS CLEARLY ADMISSIBLE IN VIEW OF THE DECISIONS OF THE APEX COURT IN THE CASES OF CIT VS. KARNATAKA STATE CO-OPERATIVE APEX BANK (200 1) 251 ITR 194 AND MEHSANA DISTRICT CENTRAL CO-OPERATIVE BANK LTD. VS. ITO (2001) 251 ITR 522. 4. WE HAVE HEARD BOTH THE PARTIES AND CONSIDERED TH E RIVAL CONTENTIONS. WE FIND THAT ISSUE IN QUESTION IS SQUARELY COVER ED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE ORDER OF THE ITAT, AMRITSAR BENCH, IN ASSESSEES OWN CASE IN APPEAL NO.328/ASR/2000 FO R A.Y. 1996-97, 400/ASR//2000 FOR A.Y. 1997-98, 525/ASR/2000 FOR A. Y. 1993-94, 292/ASR/2004 FOR THE A.Y. 1991-92, 286/ASR/2000 FOR A.Y. 1996-97, IN THE CASE OF THE NAWANSHHAR CENTRAL CO-OP BANK LTD. (ITA NO.537/ASR/1997 FOR THE A.Y. 1994-95) AND THE DECISION OF HONBLE P UNJAB & HARYANA HIGH COURT, IN THE CASE OF CIT VS. THE NAWANSHHAR CENTRA L CO-OP BANK LTD. (INCOME TAX APPEAL NO.155 OF 2002 FOR THE A.Y. 1994 -95), ORDER DATED 6 TH JANUARY, 2003, WHEREIN THE HIGH COURT, HAS CLEARLY HELD THAT DEDUCTION U/S 80P(2)(A)(I) IN RESPECT OF INCOME DERIVED FROM THE BONDS IS CLEARLY ADMISSIBLE IN VIEW OF THE DECISIONS OF THE APEX COU RT IN THE CASES OF CIT VS. KARNATAKA STATE CO-OPERATIVE APEX BANK (2001) 2 51 ITR 194 AND MEHSANA DISTRICT CENTRAL CO-OPERATIVE BANK LTD. VS. ITO (2001) 251 ITR 522. THE FACTS OF THE CASE FOR THE ASSESSMENT YEAR UNDER REFERENCE ARE IN PARI MATERIA WITH THE FACTS FOR THE ABOVE MENTIONED ASSE SSMENT YEARS. THEREFORE, THE ABOVE MENTIONED DECISIONS ARE SQUARELY APPLICAB LE TO THE FACTS OF THE 5 CASE FOR THE ASSESSMENT YEAR UNDER REFERENCE. RESPE CTFULLY FOLLOWING THE SAME, THE ORDER OF THE CIT(A), IS UPHELD AND THE GR OUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. 5. IN THE RESULT, THE APPEAL FILE BY THE REVENUE I S DISMISSED DECISION PRONOUNCED IN THE OPEN COURT ON 16 TH JUNE, 2011. SD/- SD/- (H.L. KARWA) (MEHAR SINGH) VICE PRESIDENT ACCOUNTANT MEMBER DATED: 16 TH JUNE, 2011 /SKR/ COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE:THE HOSHIARPUR CENTRAL COOP BANK , HOS HIARPUR. 2. THE ACIT, HOSHIARPUR CIRCLE, HOSHIARPUR. 3. THE CIT(A), JALANDHAR. 4. THE CIT, JALANDHAR. 5. THE SR DR,ASR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH : AMRITSAR.