The ACIT, Circle-5, Surat V. The Surat Vankar Sahakari Sangh Ltd., Surat

ITA 2532/AHD/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 85507 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 06-01-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 28-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SONIA KUMAR
• Assessee Lawyers: R N VEPARI
• Section: 260A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER AND SHRI N.S. SAINI , ACCOUNTANT MEMBER ITA NO . 2532 /AHD/20 1 3 A. Y. 20 10 - 11 ACIT, CIRCLE - 5, SURAT. VS THE SURAT VANKAR SAHAKARI SANGH LTD., OPP. RE SHAMWALA MARKET, RING ROAD, SURAT. PAN: AAAAT 3159L (APPELLANT) (RESPONDENT) REVENUE BY : SMT. SONIA KUMAR , SR. D.R. , ASSESSEE(S) BY : SHRI R.N. VEPARI , A.R. / DATE OF HEARING : 06 / 01 /201 5 / DATE OF PRONOUNCEMENT: 16 / 01 /201 5 / O R D E R PER SHRI MUKUL KUMAR SHRAWAT, JUDICIAL MEMBER THIS IS AN A PPEAL FILED BY THE REVENUE ARISING FROM THE ORDER OF THE L EARNED CIT(A ) - I, SURAT AND THE GROUNDS RAISED ARE AS FOLLOWS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD.CIT(A) HAS ERRED IN DELETING THE ADDITION MADE BY DISALLOWING THE DEDUCTION CLAIMED U/S.80P(2)(A)(I) OF RS.4,73,131/ - , U/S.80P(2)(D) OF RS.63,49,433/ - AND U/S.80P(2)(C)(I) OF RS.1,00,000/ - OF THE ACT. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN APPRECIATING THE FACT FOUND BY THE AO AND IGNORED EVIDENCES COLLECTED BY THE AO FOR MAK ING ADDITION OF RS.69,22,564/ - BY DISALLOWING THE DEDUCTION CLAIMED U/S. 80P(2)(A)(I), 80P(2)(D) & 80P(2)(C)(I) OF THE ACT. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, DEDUCTION U/S. 80P(2)(A) & 80P(2)(D) & 80P(2)(C) BEING TAKEN ON GROSS VALU ES WHEN THE WORD USED IN SECTION IS 'INCOME' WHICH WOULD MEAN 'NET' OF EXPENSES. THIS GROUND BE TAKEN WITHOUT PREJUDICE TO THE GROUNDS AND BECAUSE OF THE FACT THAT WHOLE OF THE AMOUNT WAS DISALLOWED IN VIEW OF SEC.80P(4). ITA NO. 2532 /AHD/201 3 ACIT, CIRCLE - 5, SURAT VS. THE SURAT VANKAR SAHAKARI SANGH LTD. . FOR A.Y. 20 10 - 11 - 2 - 2. FROM THE SIDE OF THE REVENUE, LEARNED SR.D.R., MRS. SONIA KUMAR AND FROM THE SIDE OF THE RESPONDENT - ASSESSEE, LEARNED A.R., MR. R.N. VEPARI APPEARED. AT THE OUTSET, OUR ATTENTION HAS BEEN DRAWN AT PARAGRAPH - 7 OF THE STATEMENT OF FACTS, FOR READY REFERENCE REPRODUCED BELOW: 7. IN THIS CASE ON THE SAME ISSUE FOR THE A.YS. 2008 - 09 AND 2009 - 10 THE HON BLE ITAT HAS DECIDED THE APPEAL IN FAVOUR OF THE ASSESSEE. HOWEVER, THE DEPARTMENT HAS NOT ACCEPTED THE DECISION OF THE HON BLE ITAT AND THE APPEAL UNDER THE PROVISIONS OF SECTION 260A OF TH E ACT IS BEING PREFERRED BEFORE THE HON BLE GUJARAT HIGH COURT. BEING COVERED THIS ISSUE IN THIS CASE AND TO KEEP THE ISSUE ALIVE, FOR THE A.Y. 2010 - 11 ALSO, THE 2 ND APPEAL IS REQUIRED TO BE FILED BEFORE THE HON BLE ITAT. 3. IN SHORT, IT IS PLEADED FROM THE SIDE OF THE LEARNED AR THAT THE ISSUE AS RAISED BY THE REVENUE DEPARTMENT HAS ALREADY BEEN DECIDED IN ASSESSEE S FAVOUR BY THE RESPECTED TRIBUNAL AS WELL AS BY THE HON BLE GUJARAT HIGH COURT. AN ORDER OF HON BLE ITAT B BENCH AHMEDABAD BEARING ITA NO. 578,579/AHD/2013 (A.Y. 2008 - 09 AND 2009 - 10) TITLED A S ACIT, SURAT VS. THE SURAT VANKAR SAHAKARI SANGH LTD. DATED 10.05.2013 HAS BEEN CITED WHEREIN VIDE PARAGRAPHS 6 AND 7 THIS ISSUE WAS DECIDED IN ASSESSEE S FAVOUR AS UNDER: 6. WE HAVE HEARD LD. DR OF T HE REVENUE AND PERUSED THE MATERIALS AVAILABLE ON RECORD. THE ASSESSING OFFICER HAD DISALLOWED THE CLAIM OF ASSESSEE MADE U/S. 80P OF THE ACT ON THE BASIS THAT ASSESSEE IS A CO OPERATIVE CREDIT SOCIETY AND NOT A PRIMARY CO - OPERATIVE CREDIT SOCIETY, CARRYIN G ON BANKING BUSINESS, THE COOPERATIVE SOCIETY EARNING IS TREATED AS INCOME, IF THE SAME IS DERIVED BY THE CO - OPERATIVE CREDIT SOCIETY FROM ITS MEMBERS, WITHIN THE DEFINITION OF SECTION 2(24)(VIIA) OF THE ACT WITH EFFECT FROM AY 2007 - 08 AND ALL THE CONDITI ONS ARE SATISFIED TO TAX, THE INCOME OF THE ASSESSEE - CO - OPERATIVE CREDIT SOCIETY AS INCOME FROM BANKING BUSINESS, HOWEVER, LD. CIT(A) ALLOWED THE DEDUCTION. THE OBJECTION OF ASSESSING OFFICER WAS THAT THE PROVISIONS OF SECTION 80P(4) ARE APPLICABLE AND ASS ESSEE IS NOT ENTITLED FOR SUCH DEDUCTION. WE FIND THAT HON'BLE CO - ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF ACIT V. THE JAFRI MOMIN VIKAS CREDIT CO - OP. SOCIETY LTD. (SUPRA) HAS HELD THAT THE LD. CIT(A) HAS VERIFIED THE NATURE OF ACTIVITY AND HELD THAT ASSESSEE IS A CO - OPERATIVE CREDIT SOCIETY NOT IN BANKING BUSINESS. THE PROVISIONS OF SECTION 80P(4) WILL HAVE NO APPLICATION IN THE ASSESSEE'S CASE, ITA NO. 2532 /AHD/201 3 ACIT, CIRCLE - 5, SURAT VS. THE SURAT VANKAR SAHAKARI SANGH LTD. . FOR A.Y. 20 10 - 11 - 3 - THEREFORE, IT IS ENTITLED FOR THE DEDUCTION U/S. 80P(2) OF THE ACT. WE FIND IN THE PRESENT CASE, ALSO LD. CIT(A) HAS GIVEN A FINDING THAT THE ASSESSEE DOES NOT MEET THE CONDITION AS LAID IN THE BANKING REGULATION ACT, 1949 FOR A CO - OPERATIVE BANK. MOREOVER, THE REVENUE HAS NOT PLACED ANY MATERIAL CONTROVERTING THE FINDING OF LD. CIT(A). THEREFORE, WE DO NOT FI NDING ANY INFIRMITY INTO THE ORDER PASSED BY LD. CIT(A) AND SAME IS HEREBY UPHELD. THESE GROUNDS OF REVENUE'S APPEAL ARE DISMISSED. 7. TAKING A CONSISTENT VIEW IN REVENUE S APPEAL IN ITA NO.578/AHD/2013 IN PARA - 6 OF THIS ORDER, THE APPEAL OF THE REVENUE IN ITA NO.579/AHD/2013 IS DISMISSED AS INDICATED ABOVE. SINCE, NO CHANGE INTO FACTS AS CIRCUMSTANCES HAS BEEN POINTED BY LD. AR OF THE ASSESSEE. 3.1 MOREOVER, THE HON BLE GUJARAT HIGH COURT IN TAX APPEAL NO.1149 OF 2013 TITLED AS CIT - II VS. SURAT VANKAR S AHKARI SANGH LTD., VIDE ORDER DATED 17 TH JANUARY, 2014 HELD VIDE PARAGRAPH 7 AS UNDER: 7. FROM THE ABOVE CLARIFICATION, IT CAN BE GATHERED THAT SUB - SECTI O N(4) OF SECTION 80 P WILL NOT APPLY TO AN ASSESSEE WHICH IS NOT A CO - OPERATIVE BANK. IN THE CASE CLARI FIED BY CBDT, DELHI COOP URBAN THRIFT & CREDIT SOCIETY LTD. WAS UNDER CONSIDERATION. CIRCULAR CLARIFIED THAT THE SAID ENTITY NOT BEING A CO - OPERATIVE BANK, SECTION 80 P (4) OF THE ACT WOULD NOT APPLY TO IT. IN VIEW OF SUCH CLARIFICATION, WE CANNOT ENTERTAIN THE REVENUES CONTENTION THAT SECTION 80P(4) WOULD EXCLUDE NOT ONLY THE CO - OPERATIVE BANKS OTHER THAN THOSE FULFILLING THE DESCRIPTION CONTAINED THEREIN BUT ALSO CREDIT SOCIETIES, WHICH ARE NOT CO OPERATIVE BANKS. IN THE PRESENT CASE, RESPONDENT ASSESSEE I S ADMITTEDLY NOT A CREDIT CO - OPERATIVE BANK BUT A CREDIT CO - OPERATIVE SOCIETY. EXCLUSION CLAUSE OF SUB - SECTION (4) OF SECTION 80P, THEREFORE, WOULD NOT APPLY. IN THE RESULT, TAX APPEALS ARE DISMISSED. 4. IN THE LIGHT OF THE ABOVE BACKGROUND AND THE ARGUM ENTS RAISED BEFORE US, WE HAVE DULY CONSIDERED THE GROUNDS RAISED FROM THE SIDE OF THE REVENUE. WHAT WE HAVE NOTED THAT THE REVENUE HAS CHALLENGED THE CALCULATION OF DEDUCTION U/S.80P(2) SINCE THE ASSESSEE HAS CLAIMED DEDUCTION UNDER CHAPTER VIA IN THE RET URN FILED BY INVOKING SECTION 80P(2) WHICH WAS DIS ALLOWED BY THE AO. BUT WHEN THE MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AUTHORITY, LEARNED CIT(A) HAS GIVEN HIS FINDING AS FOLLOWS: AS REGARDS THE INCOME U/S.80P(2)(A)(I) AND SECTION 80P(2)(C), THERE IS NOTHING ON RECORD WHICH CAN ESTABLISH WHETHER IT IS A GROSS INCOME OR NET ITA NO. 2532 /AHD/201 3 ACIT, CIRCLE - 5, SURAT VS. THE SURAT VANKAR SAHAKARI SANGH LTD. . FOR A.Y. 20 10 - 11 - 4 - INCOME AS PER SECTION 80P(2)(C), THE APPELLANT IS FIRST REQUIRED TO WORK OUT THE PROFIT FORM ACTIVITIES PERTAINING TO THAT SECTION AND THEN CLAIM DEDUCTION IF ANY. SUCH DETAILS A RE ALSO NOT AVAILABLE ON RECORDS. HOWEVER, THESE ISSUES ARE NOT DIRECTLY ARISING FROM THE GROUNDS OF APPEAL. THEREFORE, THIS ORDER SHOULD NOT BE CONSTRUCTED AS A FINDING ON THESE ISSUES AND IT WILL NOT PREJUDICE ANY ACTION, THE ASSESSING OFFICER MAY TAKE I N ACCORDANCE WITH LAW ON THESE ISSUES. 4.1 IN THE LIGHT OF THE ABOVE DISCUSSION, A CLEAR PICTURE EMERGES THAT THE PROVISIONS OF SECTION 80P(4) ARE NOT TO BE APPLIED ON THIS ASSESSEE AS HELD BY THE HON BLE GUJARAT HIGH COURT. THEREAFTER THE QUESTION ARISE S ABOUT THE CLAIM OF EXEMPTION AS PRESCRIBED U/S.80P(2) OF IT ACT. THE REVENUE HAS NOT RAISED ANY GROUND IN RESPECT OF THE APPLICABILITY OF THE PROVISIONS OF SECTION 80P(4) BUT RAISED THE GROUND ABOUT THE QUANTUM OF RELIEF GIVEN BY LD. CIT(A) U/S.80P(2) OF THE ACT. HOWEVER AS SEEN FROM THE FINDINGS OF LD. CIT(A), PARAGRAPH REPRODUCED ABOVE , I T WAS COMMENTED THAT THOSE DETAILS WERE NOT AVAILABLE ON RECORD HENCE HE HAS SIMPLY MENTIONED THAT THE AO CAN DO IN ACCORDANCE OF LAW. UNDER SUCH CIRCUMSTANCES, ESPECIA LLY WHEN NOTHING SPECIFIC IS BROUGHT TO OUR NOTICE FROM THE SIDE OF THE REVENUE DEPARTMENT, WE DEEM IT PROPER NOT TO INTERFERE WITH THE FINDINGS OF LD. CIT(A). RATHER, WE FEEL THAT THE REVENUE DEPARTMENT SHOULD NOT HAVE ANY GRIEVANCE AGAINST SUCH FINDING. RESULTANTLY, THE GROUNDS RAISED BY THE REVENUE ARE HEREBY DISMISSED. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. SD/ - SD/ - ( N.S. SAINI ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBE R JUDICIAL MEMBER AHMEDABAD; DATED 16 / 01 / 20 1 5 PRABHAT KR. KESARWANI , SR. P . S . / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT ITA NO. 2532 /AHD/201 3 ACIT, CIRCLE - 5, SURAT VS. THE SURAT VANKAR SAHAKARI SANGH LTD. . FOR A.Y. 20 10 - 11 - 5 - 2. / THE RESPONDENT. 3. / CONCERNED CIT 4. ( ) / THE CIT(A) - III, AHMEDABAD 5. , , / DR, ITAT, AHMEDABAD 6. / GUARD FILE . / BY ORDER, / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD