Mahuva Vibhag People Co.-Op. Credit Society Ltd., Surat V. The Dy. Commissioner of Income Tax, Circle-2(3), Surat

ITA 2438/AHD/2016

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 1975 (ITAT-SURAT)
• Duration Of Justice: 2 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-10-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 27-09-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS SMITHA NAIR
• Assessee Lawyers: RASESH SHAH
• Keywords: Co-operative Credit Society
• Section: 80P

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT , , BEFORE SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI O.P.MEENA, ACCOUNTANT MEMBER . / ITA NO.2438/AHD/2016/SRT / ASSESSMENT YEAR: 2013-14 MAHUVA VIBHAG PEOPLE CO-OP. CREDIT SOCIETY LTD., BAZAR STREET, MAHUVA, SURAT 394 250. [PAN: AAAAM 1329B] VS. DY. COMMISSIONER OF INCOME TAX, CIRCLE-2(3), SURAT. ( ' / APPELLANT) ( #$' /RESPONDENT) / APPELLANT BY : SHRI RASESH SHAH, C.A /RESPONDENT BY : MRS. SMITHA NAIR, SR. D.R /DATE OF HEARING : 15-10-2018 / DATE OF PRONOUNCEMENT : 26-10-2018 / ORDER PER C.M. GARG, JUDICIAL MEMBER: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-1, SURAT (CIT (A) FOR SHORT) DATED 27.07.2016 FOR THE ASSESSMENT YEAR (A.Y) 2013-14. 2. THE GROUNDS RAISED BY THE ASSESSEE READ AS FOLLO WS: 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WE LL AS LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE ACTION OF ASSESSING OFFICER IN MAKING THE DISALLOWANCE OF RS. 86,704/- ON ACCOUNT OF DEDUCTIO N CLAIMED U/S. 80P(2)(A)(I). 2 ITA NO.2438/AHD/2016/SRT (A.Y: 2013-14) M/S. MAHUVA VIBHAG PEOPLE CO-OP. CREDIT SOCIETY LTD . 2. IT IS THEREFORE PRAYED THAT ABOVE DISALLOWANCE M ADE BY ASSESSING OFFICER AND CONFIRMED BY LEARNED COMMISSI ONER OF INCOME-TAX (APPEALS) MAY PLEASE BE DELETED. 3. WE HAVE HEARD THE ARGUMENTS OF BOTH SIDES AND CA REFULLY PERUSED THE RELEVANT MATERIAL PLACED ON THE RECORD OF THE T RIBUNAL. THE LD. ASSESSEES REPRESENTATIVE (AR) SUBMITTED THAT THE L EARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN C ONFIRMING THE ACTION OF ASSESSING OFFICER IN MAKING THE DISALLOWANCE OF RS. 86,704/- ON ACCOUNT OF DEDUCTION CLAIMED U/S. 80P(2)(A)(I) OF T HE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'). HE FURTHER SUBMITTED TH AT THE SAID DISALLOWANCE MADE BY ASSESSING OFFICER AND CONFIRMED BY LD. CIT( A) MAY KINDLY BE DELETED. THE LD. AR SUBMITTING COPY OF ORDER OF IT AT D BENCH, AHMEDABAD DATED 28.08.2018 IN THE CASE OF SHREE DHANSOBHAVAK CO- OPERATIVE CREDIT SOCIETY LTD. VS. ITO IN ITA NO.337 5/AHD/2016 AND SUBMITTED THAT THE AO HAS TO DETERMINE THE NET INTE REST INCOME AS WELL AS NET MISC. INCOME EARNED BY THE ASSESSEE, AND ONLY T HEREAFTER THAT INCOME HAS TO BE EXCLUDED FROM THE ADMISSIBILITY OF DEDUCT ION U/S. 80P OF THE ACT THEREFORE, THE AO MAY KINDLY BE DIRECTED TO RE-EXAM INE THE ISSUE AS TO WHETHER THE ASSESSEE IS ENTITLED FOR STATUTORY DEDU CTION U/S. 80P(2)(C) OF THE ACT OR NOT AND TO CALCULATE CORRECT AMOUNT OF D ISALLOWANCE AS PER MANDATE OF SAID SECTION TAKING INTO CONSIDERATION N ET INTEREST INCOME AND NET MISC. INCOME. 3 ITA NO.2438/AHD/2016/SRT (A.Y: 2013-14) M/S. MAHUVA VIBHAG PEOPLE CO-OP. CREDIT SOCIETY LTD . 4. REPLYING TO THE ABOVE,, THE LD. DEPARTMENTAL REP RESENTATIVE (DR) STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BE LOW AND SUBMITTED THAT THE AO WAS RIGHT IN MAKING DISALLOWANCE AND THE SAM E WAS RIGHTLY UPHELD BY THE LD. CIT(A). HOWEVER, IN ALL FAIRNESS, THE L D. DR SUBMITTED THAT LOOKING INTO THE INSUFFICIENT VERIFICATION AND EXAM INATION OF THE ISSUE UNDERTAKEN BY THE AO THE DEPARTMENT HAS NO SERIOUS OBJECTION IF THE SOLE ISSUE FOR LIMITED PURPOSE IS RESTORED TO THE FILE O F THE A.O IN VIEW OF PROPOSITION RENDERED BY ITAT D BENCH, AHMEDABAD I N THE CASE OF SHREE DHANSOBHAVAK CO-OPERATIVE CREDIT SOCIETY LTD. (SUPR A) FOR CALCULATION OF CORRECT AMOUNT OF DISALLOWANCE BY CONSIDERING THE N ET INTEREST INCOME AND NET MISC. INCOME. 5. ON CAREFUL CONSIDERATION OF ABOVE RIVAL SUBMISSI ONS, WE ARE OF THE VIEW THAT THE ITAT, AHMEDABAD IN THE ORDER DATED 28 .08.2018 (SUPRA) ON THE SIMILAR FACTS AND CIRCUMSTANCES HAS RESTORED TH E ISSUE TO THE FILE OF THE A.O BY FOLLOWING DECISION OF HONBLE JURISDICTI ONAL HIGH COURT OF GUJARAT IN THE CASE OF STATE BANK OF INDIA CO-OPERATIVE SOCIETY VS. CIT 72 TAXMANN.COM 64 (GUJ.), WHEREIN IT HAS BEEN HELD THAT COOPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF PROVIDING CREDIT FACILIT IES TO ITS MEMBERS WHICH EARNS INTEREST INCOME ON THE SURPLUS FUNDS PARKED W ITH THE NATIONALIZED BANKS, IS NOT ELIGIBLE FOR DEDUCTION/S. 80P(2)(A)(I ) OF THE ACT. THEREFORE, RESPECTFULLY FOLLOWING THE RATIO OF DECISION OF HON BLE JURISDICTIONAL HIGH COURT (SUPRA), WE HOLD THAT THE ORDERS OF THE AUTHO RITIES BELOW IN DENYING 4 ITA NO.2438/AHD/2016/SRT (A.Y: 2013-14) M/S. MAHUVA VIBHAG PEOPLE CO-OP. CREDIT SOCIETY LTD . DEDUCTION U/S. 80P(2)(A)(I)OF THE ACT IS QUITE CORR ECT AND IN ACCORDANCE WITH THE RATIO OF DECISION OF HON'BLE HIGH COURT AN D THERE IS NO REASON BEFORE US TO INTERFERE WITH THE SAME AND THUS, WE C ONFIRM THE SAME. 6. BEFORE WE PART WITH THE ORDER, WE FIND IT JUSTIF IED AND NECESSARY TO OBSERVE THAT ANY EXPENDITURE INCURRED BY THE ASSESS EE FOR EARNING SUCH INCOME, WHICH HAS NOT BEEN CLAIMED AND ALLOWED, COU LD BE ALLOWED TO THE ASSESSEE MEANING THEREBY THE AO HAS TO DETERMINE TH E NET INTEREST INCOME AS WELL AS NET MISCELLANEOUS INCOME EARNED B Y THE ASSESSEE AND ONLY THEREAFTER THAT NET INCOME HAS TO BE EXCLUDED FROM THE CLAIM OF DEDUCTION U/S. 80P OF THE ACT. WE, THEREFORE, DIREC T THE AO TO EXAMINE AND RECALCULATE THE CORRECT AMOUNT OF DISALLOWANCE AS PER DIRECTIONS NOTED HEREIN ABOVE. THE ISSUE IS RESTORED TO THE F ILE OF THE A.O FOR LIMITED PURPOSES. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED WITH THE DIRECTIONS TO THE AO AS MENTIONED HEREIN ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 6 TH OCTOBER, 2018. / SURAT ; DATED : 26 TH OCTOBER, 2018 / EDN # & / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT ; 3. $ ( ) / THE CONCERNED CIT(A); 4. THE CONCERNED PRL. CIT; 5. , , / DR, ITAT, SURAT; 6. / GUARD FILE . SD/- SD/- ( ) ( O.P.MEENA ) / ACCOUNTANT MEMBER ( ) (C.M.GARG) /JUDICIAL MEMBER