Solapur nagari Audyogik Sahakari Bank Niymit, Solapur V. Asst. Commissioner Of Income Tax, Solapur

ITA 244/PUN/2011

• Counselvise Citation: 24424514 RSA 2011
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Next Hearing Date: 08-11-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 07-03-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Assessee Lawyers: R N BHATTAD

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER , AND SHRI G.S.PANNU, ACCOUNTANT MEMBER. ITA.NO.244/PN/2011 (ASSTT. YEAR : 2006-07) SOLAPUR NAGARI AUDYOGIK SAHKARI BANK LTD., 340 A, SAKHAR PETH, SOLAPUR. .. APPELLANT VS. ACIT, CIRCLE-2, SOLAPUR. .. RESPONDENT ASSESSEE BY : SHRI R.N.BHATTAD DEPARTMENT BY : MS.ANN KAPTHUAMA DATE OF HEARING : 21.03.2013 DATE OF PRONOUNCEMENT : 29.04.2013 ORDER PER SHAILENDRA KUMAR YADAV, JM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE CIT PERTAINING TO A.Y. 2006-07 ON THE FOLLOW ING GROUNDS: 1. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERR ED IN FACTS AND IN LAW WHILE CONFIRMING THE ADDITIONS OF RS.252606/- ON ACCOUNT OF INCOME ATTRIBUTABLE TO VOLUNTARY RESE RVES. 2. THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ERR ED IN FACT AND IN LAW WHILE PARTLY ALLOWING THE ADDITION OF RS.879958/- ON ACCOUNT OF DISALLOWANCES OF AMORTIZA TION CLAIMED ON GOVT. SECURITIES. 2. AT THE OUTSET OF HEARING, THE LD. AUTHORISED REP RESENTATIVE SUBMITTED THAT THE FIRST ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE ITAT PUNE BENCH IN THE ASSESSEE S OWN CASE IN ITA.NO.58/PN/2009 FOR THE A.Y. 2005-06, WHEREIN THE TRIBUNAL HAS HELD AS UNDER: 2 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF THE PA RTIES IN THE LIGHT OF MATERIAL ON RECORD AND THE PRECEDENTS CITE D. WE FIND THAT THE ISSUES INVOLVED IN THIS CASE ARE COVERED I N FAVOUR OF THE ASSESSEE BY THE JUDGMENTS OF THE SUPREME COURT IN THE FOLLOWING CASES: I) CIT VS. NAWASHANKAR CENTRAL CO-OP BANK LTD. (2007) 289 ITR 6 (SC) II) CIT VS. RAMANATHAPURAM DIST. CO-OP CENTRAL BANK LTD . (2002) 255 ITR 423 (SC). III) CIT VS. KARNATAKA STATE CO-OP APEX BANK (2001) 251 ITR 194 (SC). FURTHER, THE ITAT AHMEDABAD SPECIAL BENCH IN THE CA SE OF SURAT DISTRICT CO-OP BANK LTD. VS. ITO (2003) 85 ITD 1 (AHD)(SB) OBSERVED IN PARAGRAPH 57 OF ITS ORDER AS UNDER: IN VIEW OF THE AFORESAID DISCUSSIONS, WE ARE OF TH E CONSIDERED OPINION THAT THE ENTIRE INCOME IN QUESTI ON VIZ. INTEREST INCOME ON INVESTMENTS IN GOVERNMENT SECURITIES, FIXED DEPOSITS, KVPS AND IVPS, INVESTME NTS IN UTI, ETC. OUT OF SURPLUS/IDLE MONEY AVAILABLE FROM WORKING CAPITAL INCLUDING VOLUNTARY RESERVES, EXCES S COLLECTION OF INTEREST TAX AND LOCKER RENT ARE ALL INCOME ATTRIBUTABLE TO BUSINESS OF BANKING AND ARE ELIGIBL E FOR GRANT OF DEDUCTION U/S.80P(2)(A)(I) OF THE ACT. SIMILARLY, THE ITAT RAJKOT BENCH IN THE CASE OF RA JKOT NAGRIK SAHAKARI BANK LTD. (2005) 98 TTJ (RJT) 330 H ELD THAT INCOME FROM TRADING IN GOVERNMENT SECURITIES FORMS PART OF BANKING BUSINESS IN VIEW OF THE PROVISIONS OF SECTI ON 6 OF THE BANKING REGULATION ACT. SIMILARLY, IN THE CASE OF FARRUKHABAD GRAMIN BANK (SUPRA) THE HON'BLE THIRD MEMBER OF ITAT AGRA BENCH HAS HELD THAT ACQUIRING AND HOLDING OF SECURITIES AND INVEST MENTS OF ALL KINDS, WHICH IS A BUSINESS PERMITTED TO BE CARRIED ON BY A REGIONAL RURAL BANK U/S.6(1)(A) OF BANKING REGULATI ON ACT, READ WITH SECTION 18(1) OF REGIONAL RURAL BANKS ACT, IS AN ACTIVITY WHICH IS CLOSELY AND INEXTRICABLY CONNECTED WITH BU SINESS OF BANKING AND AS SUCH ACTIVITY OF INVESTING EITHER IN SLR OR IN NON-SLR INVESTMENT CANNOT BE DIVERTED FROM BUSINESS OF BANKING. RESPECTFULLY FOLLOWING THE SAID DECISIONS, THE GRO UNDS RAISED ARE DECIDED IN FAVOUR OF THE ASSESSEE 3. NOTHING CONTRARY WAS BROUGHT TO OUR KNOWLEDGE. F ACTS BEING SAME, SO RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE TRIBUNAL, THE FIRST GROUND OF APPEAL IS DECIDED IN FAVOUR OF THE ASSESSEE. 3 4. THE NEXT ISSUE IS WITH REGARD TO THE ADDITION OF RS.8,79,958/- ON ACCOUNT OF DISALLOWANCES OF AMORTIZATION CLAIMED ON GOVT. SECURITIES. IN THIS REGARD, LD. AUTHORISED REPRESE NTATIVE SUBMITTED THAT THE CIT(A) CONFIRMED THE ABOVE ADDITION MADE B Y THE ASSESSING OFFICER, SIMULTANEOUSLY ISSUED DIRECTION TO THE ASS ESSING OFFICER TO ALLOW DEDUCTION U/S.80P(2)(A)(I) IN RESPECT OF ENHA NCED INCOME ARISING OUT OF SUCH DISALLOWANCE OF AMORTIZATION OF PREMIUM ON GOVERNMENT SECURITIES. HENCE, THE ASSESSEE DID NOT PRESS THIS GROUND. ACCORDINGLY, SAME IS DISMISSED AS NOT PRES SED. 5. AS A RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED. PRONOUNCED IN THE OPEN COURT ON THIS THE 29 TH DAY OF APRIL, 2013. SD/- SD/- ( G.S.PANNU ) ( SHAILENDRA KUMAR YAD AV ) ACCOUNTANT MEMBER JUDICIAL MEMBER GSPS PUNE, DATED THE 29 TH APRIL, 2013 COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE ACIT, CIRCLE-2, SOLAPUR. 3. THE CIT(A)-III, PUNE. 4. THE CIT-IV, PUNE. 5. THE DR A BENCH, PUNE. 6. GUARD FILE. BY ORDER //TRUE COPY// PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE.