Shri Sahajanand Co. Op. Credit Society Ltd., Vadodara V. The Dy. CIT, Circle-3(1), Vadodara

ITA 2449/AHD/2017

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 3696 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 06-11-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MRS AMRIN PATHAN
• Keywords: Set aside
• Section: 271(1)(c); 234B; 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH (BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER) ( THROUGH VIRTUAL COURT ) ITA. NO: 2449/AHD/2017 (ASSESSMENT YEAR: 2014-15) SHRI SAHAJANAND CO-OP CREDIT SOCIETY LTD. NAVA BAZAR, KARJAN, DIST- VADODARA 391240 V/S DY. COMMISSIONER OF INCOME-TAX, CIRCLE-3(1), VADODARA (APPELLANT) (RESPONDENT) PAN: AAAAS1764L APPELLANT BY : MRS. AMRIN PATHAN, AR RESPONDENT BY : SHRI VINOD TANWANI, SR. D.R. ( )/ ORDER DATE OF HEARING : 07 -10-2020 DATE OF PRONOUNCEMENT : 28-10-2020 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) (HEREINAFTER CALLED CIT(A)) ORDER NO. CIT(A)-VADODARA-3/10260/16-17 ORDER DATED 31/07/2017 ARISING OUT OF ITA NO. 2449/AHD/2017 . A.Y. 2014-15 2 ASSESSMENT ORDER DATED 17/10/2016. ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEAL: 1.THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -3, VADODARA [THE CIT(A)] ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF DY. COMMISSIONER OF INCOME TAX, CIRCLE-3(1) BARODA [THE AO] IN NOT ALLOWING THE DEDUCTION U/S 80P(2)(A)(I) OF RS. 58,10,410/- CLAIMED BY THE APPELLANT. 2.THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF THE AO HOLDING THAT THE INTEREST EARNED BY THE APPELLANT FROM DEPOSITS MADE WITH NATIONALIZED BANKS IS ASSESSABLE U/S 56 AND NOT ELIGIBLE FOR DEDUCTION U/S 80P(2)(A)(I) AS IT IS NOT RELATED TO THE BUSINESS OF PROVIDING CREDIT FACILITIES TO THE MEMBERS OF THE APPELLANT. 3.THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN IGNORING THE PROVISIONS OF SECTION 80(2)(A)(I) WITH CLEARLY PROVIDES THAT THE DEDUCTION IS AVAILABLE TO A CO OPERATIVE SOCIETY WHICH IS ENGAGED IN CARRYING ON THE BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS. 4. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF AO IN CHARGING INTEREST U/S 234B OF THE ACT. 5. THE LEARNED CIT(A) ERRED IN FACT AND IN LAW IN CONFIRMING THE ACTION OF AO IN INITIATING PENALTY PROCEEDING U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 ( THE ACT). 2. FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT IS SEEN ON VERIFICATION OF THE DETAILS FILED BY THE ASSESSEE THAT ASSESSEE HAD EARNED INTEREST INCOME TOTALING TO RS. 62,49,236/- FROM NATIONALIZED BANK & CO.OP. BANK. IT IS ALSO SEEN FROM THE RETURN OF INCOME FILED THAT THE ASSESSEE HAS CLAIMED DEDUCTION UNDER CHAPTER-VI-A OF THE INCOME TAX ACT I.E. U/S 80P(2)(A)(I). THE SAID INTEREST INCOME OF RS. 62,49,236/- IS EARNED FROM SURPLUS FUNDS INVESTED IN BANK DEPOSITS/SAVINGS BANK ACCOUNT WITH THE NATIONALIZED BANK. ITA NO. 2449/AHD/2017 . A.Y. 2014-15 3 3. THEREAFTER A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE IN SUPPORT OF ITS CONTENTION, ASSESSEE STATED THAT IT IS CO-OP. SOCIETY AND DOING THE BUSINESS OF BANKING. AS PER THE PROVISIONS OF SECTION 80P(2)(A)(I) OF THE ACT, THE SOCIETY IS ELIGIBLE FOR WHOLE OF THE INCOME FOR DEDUCTION UNDER ABOVE REFERRED SECTION AND THE CASE OF CO-OPERATIVE SOCIETIES ENGAGED IN CARRYING ON BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS. BUT LD. A.O. WAS NOT AGREED WITH THE CONTENTION THAT IN VIEW OF THE CASE LAWS OF TOTGAR CO-OP. SALE SOCIETY LTD. VS. ITO (SC) AND STATE BANCK OF INDIA EMPLOYEES CO-OP. CREDIT & SUPPLY SOCIETY LTD. VS. CIT IN TAX APPEAL NOS. 486 & 487, THE HONBLE GUJARAT HIGH COURT HAS HELD THAT SUCH INCOME IS NOT ELIGIBLE FOR DEDUCTION U/S 80P(2)(A)(I) OF THE ACT AND DISMISS THE CLAIM OF THE ASSESSEE AND MADE ADDITION OF RS. 62,42,049/-. 4. THEREAFTER ASSESSEE PREFERRED FIRST STATUTORY APPEAL BEFORE THE LD. CIT(A) WHO CONFIRMED THE ORDER OF THE LD. ASSESSING OFFICER. 5. NOW ASSESSEE HAS PREFERRED SECOND STATUTORY APPEAL BEFORE US. AT THE OUTSET, LD. A.R. MRS. AMRIN PATHAN STATED THAT IN ITA NO. 2754/AHD/2016 FOR ASSESSMENT YEAR 2013-14, THIS BENCH HAS DECIDED APPEAL AGAINST THE ASSESSEE FOR SIMILAR FACTS AND CIRCUMSTANCE AND ON 21/12/2017 AND BEFORE US IN SUBSEQUENT ASSESSMENT YEAR I.E. 2014-15 AND SHE REQUESTED THAT THIS CASE MAY KINDLY BE SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR NETTING OFF INTEREST INCOME EARNED BY THE ASSESSEEE. IN OUR CONSIDERED OPINION, HER PRAYER SEEMS TO BE GENUINE AND WHATEVER EXPENDITURE ASSESSEE HAS MADE IN ORDER TO EARN INTEREST INCOME SAME SHOULD BE ALLOWED. ITA NO. 2449/AHD/2017 . A.Y. 2014-15 4 6. IN VIEW OF THE ABOVE, WE SET ASIDE THIS MATTER TO THE FILE OF THE ASSESSING OFFICER TO ALLOW ANY EXPENDITURE BEING MADE TO EARN INTEREST INCOME. 7. IN THE RESULT, APPEAL FIELD BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON 28- 10- 2020 SD/- SD/- (AMARJIT SINGH) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 28 /10/2020 RAJESH COPY OF THE ORDER FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD