M/s Vysya Co-operative Bank Limited , Tumkur V. Assistant Commissioner of Income Tax Circle-1 , Tumkur

ITA 2392/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7914 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-04-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-04-2019
• Assessment Year: 2015-2016
• Appeal Filed On: 16-08-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RENUGADEVI
• Keywords: Business expenditure
• Section: 37; 143(3); 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES A BENCH: BANGALORE BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA. NO. 2392 /BANG/2018 ASSESSMENT YEAR: 2015 - 16 M/S. VYSYA COOPERATIVE BANK LIMITED, SHIVAKUMARA SWAMIJI CIRCLE, TUMKUR 572 102. PAN: AAAJV 0024 D VS. ACIT, CIRCLE - 1, TUMAKURU - 572105. (APPELLANT) (RESPONDENT) FOR ASSESSEE: NONE FOR REVENUE : SMT. RENUGA DEVI, JCIT DATE OF HEARING : 10 .04.2019 DATE OF PRONOUNCEMENT : 15 .04.2019 ORDER PER PAVAN KUMAR GADALE, JM . THE ASSESSEE HAS FILED AN APPEAL AG AINST THE ORDER OF THE CIT (A) - 7 , BANGALORE, DATED 20/06 /2018 PASSED U/S 143(3) AND U/S 250 OF THE IT ACT, 1961 FOR THE ASSESSMENT YEAR 2015 - 16. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. SECTION 80P(4) RS. 50,000/ - BASIC EXEMPTION THE LD AO / CIT (A) ERRED IN NOT APPRECIATING THAT SECTION 80P(4) DID NOT EXISTS FOR THE AY 2015 - 16 AND IT CAME INTO EFFECT ONLY FROM 01/04/2017 DENYING EXEMPTION TO COOPERATIVE BANKS. HENCE, THE APPLICATION OF THAT SECTION FOR DENYING THE EXEMPTION IS BA D IN LAW. THE APPELLANT IS A 2 COOPERATIVE SOCIETY ANSWERING TO THE REQUIREMENT MENTIONED IN SECTION 80P(2)(A)(I)J OF THE ACT. 2. CONTRIBUTION TO EDUCATION FUND RS. 7,04,080/ - THE LD AO / CIT (A) ERRED IN DISALLOWING A SUM OF RS. 7,04,080/ - CONTRIBUTED TO THE COOPERATIVE EDUCATION FUND UNDER THE KARNATAKA COOPERATIVE SOCIETIES ACT, 1959; SINCE IT IS A STATUTORY PAYMENT AND DEDUCTIBLE U/S 37 OF THE INCOME TAX ACT, 1961; THE CONTRIBUTION IS NECESSARY TO CARRY THE BUSINESS OF COOPERATIVE SOCIETY. (II) THE LD AO AND CIT (A) ERRED IN DISREGARDING THE KARNATAKA HIGH COURT DECISION IN PANDAVAPUR SAKKARA SAHAKARA KHARKHANE 174 ITR 475 ON THE IDENTICAL ISSUE AND THE REASONS GIVEN THEREOF ARE BAD IN LAW. 3. RS. 6,59,000/ - PAYMENT OF SCHOLARSHIP OF CHILDREN OF ME MBERS. THE LD AO / CIT (A) ERRED IN DISALLOWING SUM OF RS. 6,59,000 PAID AS SCHOLARSHIP TO MEMBERSS CHILDREN WHICH BEING AN INCENTIVE AND LEGITIMATE BUSINESS EXPENDITURE WAS DEDUCTIBLE SHOULD HAVE CONSIDERED THE PRECEDENT; THE HONBLE ITAT (AHMEDABA D) DECISION IN THE ACIT, CIRCLE - 1(3), AHMEDABAD VS. KALUPUR COMMERCIAL COOPERATIVE BANK LTD ITA NO. 1234 (DECISION ON 6 JUNE, 2018) IDENTICAL EXPENDITURE HAS BEEN INCURRED IN THE ASSESSMENT YEAR 2008 - 09 WHICH WAS DECIDED BY THE ITAT VIDE ITS ORDER DAT ED 17/08/2016J PASSED IN ITA NO.2614/AHD/2011. DISSATISFIED WITH THE ORDER OF THE ITAT, REVENUE WENT IN APPEAL BEFORE THE HONBLE HIGH COURT IN TAX APPEAL NO. 596 OF 2017. WHILE EXAMINING THE CORRECTNESS OF THE ITATS ORDER, THE HONBLE HIGH COURT HAS O BSERVED THAT FOR THE PURPOSE BUSINESS, THE ASSESSEE HAS TO MAINTAIN GOODWILL AND CONTINUITY OF BUSINESS BEING PROVIDED BY IMPORTANT MEMBERS. THUS, IN ORDER TO BOOST ITS BUSINESS, THE ASSESSEE COULD PLANT FOR PROVIDING CERTAIN INCENTIVES TO THE MEMBERS. FOLLOWING DECISION OF THE ITA NO.1234 AND 1934/AHD/2016 HONBLE JURISDICTIONAL HIGH COURT IN THE ASSESSEES OWN CASE, WE ALLOW THIS GROUND OF APPEAL AND DELETE DISALLOWANCE. 2. AT THE TIME OF HEARING NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY ADJOURNMENT PETITION WAS FILED. ON PERUSAL OF THE RECORD, WE FOUND 3 THAT INITIALLY THE DATE OF HEARING WAS FIXED ON 05/12/2018 BUT CONSIDERING THE LD ARS REQUEST THE CASE WAS ADJOURNED TO10/04/2019 AND THE SAME WAS INFORMED TO BOTH THE PARTIES. CONSIDERING THE FACTS AND CIRCUMSTANCES AND NON - APPEARANCE OF THE ASSESSEE, WE ARE OF OPINION THAT THE ASSESSEE IS NOT SERIOUSLY INTERESTED IN PURSUING THE APPEAL. THE LAW AIDS THOSE WHO ARE VIG ILANT, NOT THOSE WHO SLEEP UPON THEIR RIGHTS. THIS PRINCIPLE IS EMBODIED IN WELL KNOWN DICTUM, VIGILANTIBUS EXPORT TURNOVER NONDORMIENTIBUS JURA SUB VENIUNT. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND KEEPING IN VIEW THE PROVISIONS OF RULE 19(2) OF THE INCOME TAX APPELLATE TRIBUNAL RULES AS WERE CONSIDERED IN THE CASE OF CIT VS. MULTIPLAN INDIA LTD. (38 ITD 320) (DEL), WE DISMISS THE APPEAL FOR NON - PROSECUTION. 3. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED I N THE OPEN COURT ON 1 5 T H DAY OF APRIL, 2019. S D / - S D / - (A.K. GARODIA) (PAVAN KUMAR GADALE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 1 5 T H APRIL , 2019 . OKK, SR.PS 4 COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT (A) 4. PR. CIT 5. DR, ITAT, BANGALORE. 6. GUARD FILE