Income Tax Officer-Ward-46(4), Kolkata, Kolkata V. The Baksara Co-Operative Credit society Ltd., Howrah

ITA 2581/KOL/2013

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4363 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2016
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 10-08-2016
• Assessment Year: 2010-2011
• Appeal Filed On: 12-11-2013
• Court: TRIBUNAL
• Department Lawyers: DEBASISH LAHIRI CIT LD
• Assessee Lawyers: A K TIBREWAL FCA LD
• Keywords: Business income; Additional evidence
• Section: 56; 2

Judgement Text

ITA NO. 2581/KOL/2013 THE BAKSARA CO-OP CREDIT SOCIETY LTD 1 IN THE INCOME TAX APPELLATE TRIBUNAL,A BENCH, KOLKATA BEFORE SHRI WASEEM AHMED, ACCOUNTANT MEMBE R AND SHRI S.S.VISWANETHRA RAVI, JUDICIAL MEMBE R I.T.A. NO. 2581/KOL/2013 A.Y: 2010-11 I.T.O WARD 46(4), VS. THE BAKSARA CO-OPERATIVE KOLKATA CREDIT SOCIETY LTD PAN: AAAJT 0469J (APPELLANT) (RESPONDENT) APPEARANCES BY: SHRI DEBASISH LAHIRI, ADDL.CIT, LD.SR.DR FOR THE RE VENUE SHRI A.K. TIBREWAL, FCA, LD.AR FOR THE ASSESSE E DATE OF HEARING : 10-08-2016 DATE OF PRONOUNCEMENT : 19-10-2016 O R D E R SHRI S.S. VISWANETHRA RAVI, JM :- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), KOLKATA D ATED 30- 08-2013 FOR THE ASSESSMENT YEAR 2010-11. 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOL LOWING GROUNDS OF APPEAL:- 1. THAT THE LD. CIT(A) HAD ERRED IN LAW AND IN FACT S BY ALLOWING THE CLAIM OF THE ASSESSEE OF RS. 1,28,71,8 85/- AS DEDUCTION U/S. 80P(2)(A)(I) OF THE INCOME-TAX ACT W ITHOUT APPRECIATING THE FACT THAT THE ASSESSEE BEING CO-OP ERATIVE SOCIETY IN THE BANKING BUSINESS, FALLS UNDER THE DE FINITION OF 'CO-OPERATIVE BANK' UNDER CLAUSE (CCV) OF SECTIO N 5 OF THE BANKING REGULATION ACT, 1959 AND THEREFORE , IS NOT ELIGIBLE FOR RELIEF UNDER THIS SECTION AS IT IS NEITHER A 'PRIMARY AGRICULTURAL CO-OPERATIVE SOCIETY' NOR A ' PRIMARY CO- OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BA NK', THE ONLY TWO CATEGORIES OF CO- OPERATIVE BANK EXEMP TED ITA NO. 2581/KOL/2013 THE BAKSARA CO-OP CREDIT SOCIETY LTD 2 UNDER SECTION 80P(4) OF THE INCOME-TAX ACT, A PROVI SION INSERTED IN THE ACT W.E.F. 1-4-2007. 2. THAT THE CIT(A) ERRED IN LAW IN MERELY RELYING O N THE DECISION OF HIS PREDECESSOR IN THE ASSESSEE'S OWN C ASE FOR THE A.Y. 2009-10 IN GIVING RELIEF UNDER SECTION 80P(2)(A)(I) AND COMPLETELY IGNORED THE DECISION OF ITAT, JAIPUR BENCH IN THE CASE OF KEKRI SAHAKARI BHUMI VI KASH BANK LTD. REPORTED IN 22 TAXMANN.COM 63(JP)(2012) RELIED UPON BY THE ASSESSING OFFICER. 3. THAT THE CIT(A) ERRED IN LAW BY NOT APPRECIATING THE PURPORT OF THE PROVISION OF SUB- SECTION 24(VII) OF SECTION 2 OF INCOME TAX ACT, WHI CH WAS INSERTED W.E.F. 1.4.2007, ALONG WITH SECTION 80P(4) , IN THE INCOME TAX ACT WHICH CLEARLY DECLARES THE LEGISLATI VE INTENT OF WITHDRAWING THE BENEFIT UNDER SECTION 80P(2)(A)(I) W.E.F. A.Y. 2007-08 IN RESPECT OF ALL CO-OPERATIVE BANK EXCEPT 'PRIMARY AGRICULTURAL CRED IT SOCIETY' OR 'PRIMARY CO- OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK'. 4. THAT THE LD. CIT(A) ERRED IN LAW AND IN FACT IN MERELY RELYING ON THE DECISION OF HIS PREDECESSOR IN THE ASSESSEE'S OWN CASE FOR THE A.Y. 2009-10, IN TREATI NG THE INCOME FROM OTHER SOURCES OF RS.2, 75,18,0991- AS INCOME FROM BUSINESS, AND HIS ORDER SUFFERS FROM PERVERSITY AS HE COMPLETELY IGNORED THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF TOTGARS' CO- OPERATIVE SALE SOCIETY LTD. REPORTED IN 322 ITR 283 (SC) [2010] WHICH HAD HELD THAT INTEREST INCOME OF A CO- OPERATIVE CREDIT SOCIETY ARISING ON THE SURPLUS INV ESTED IN SHORT-TERM DEPOSITS AND SECURITIES, WOULD COME UNDE R THE CATEGORY OF 'INCOME FROM OTHER SOURCES' TAXABLE UND ER SECTION 56 OF THE INCOME TAX ACT. 5. THAT THE REVENUE CRAVES LEAVE TO ADD, ALTER, INC LUDE OR MODIFY THE GROUNDS OF APPEAL. 3. FROM THE ABOVE GROUNDS OF APPEAL, IT IS SEEN THA T THE ONLY GROUND TO BE DECIDED AS TO WHETHER THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION U/S.80P(2)(A)(I) OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CO- OPERATIVE SOCIETY AND ITS BUSINESS IS BANKING AND P ROVIDING CREDIT FACILITIES TO ITS MEMBERS. THE ASSESSEE FILE D ITS RETURN OF ITA NO. 2581/KOL/2013 THE BAKSARA CO-OP CREDIT SOCIETY LTD 3 INCOME ON 06-10-2010 DECLARING A TOTAL INCOME AT RS . NIL AFTER CLAIMING DEDUCTION U/S. 80P OF THE ACT. THE AO DENI ED TO ALLOW SUCH CLAIM OF DEDUCTION IN VIEW OF PROVISO TO SECTI ON 80P(4) OF THE ACT. THEREBY THE AO DISALLOWED THE CLAIM OF DED UCTION U/S. 80P OF THE ACT TO THE EXTENT OF RS.1,28,71,885/- AN D ADDED THE SAME TO THE TOTAL INCOME OF THE ASSESSEE. 5. AGGRIEVED BY SUCH ORDER OF THE AO IN DOING SO TH E ASSESSEE CHALLENGED THE SAME BEFORE THE CIT-A AND C ONTENDED THE SAME SUBMISSIONS AS MADE BEFORE THE AO. THE CIT -A AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE BY RELY ING ON THE DECISION IN ASSESSEES OWN CASE FOR THE AY 2009-10 BY THE 1 ST APPELLATE AUTHORITY DELETED THE IMPUGNED ADDITION B Y HOLDING THAT INTEREST EARNED FROM INVESTMENT ON SAVINGS BAN K IS A BUSINESS INCOME OF THE ASSESSEE. 6. AGGRIEVED BY SUCH ORDER OF THE CIT-A, NOW THE RE VENUE IS IN APPEAL BEFORE US BY RAISING THE ABOVE MENTIONED GROUNDS OF APPEAL. 7. BEFORE US THE LD.DR FILED AN ADDITIONAL EVIDENCE BEING MEMO NO.5433 DATED 12/09/13 ISSUED BY THE ADDL. RE GISTRAR OF CO-OPERATIVE SOCIETIES, WEST BENGAL, ON RECORD AND PRAYED TO ADMIT THE SAME AS AN ADDITIONAL EVIDENCE. BY RELYIN G ON SUCH MEMO, HE FURTHER ARGUED THAT THE ASSESSEE IS NOT A CO- OPERATIVE SOCIETY AND IS AN URBAN CO-OP BANK. FURTH ER ARGUED THAT SINCE THE ASSESSEE IS NOT A CO-OPERATIVE SOCIE TY, IT CANNOT AVAIL ANY CLAIM OF DEDUCTION IN THE RETURN OF INCOM E U/S. 80P OF THE ACT. IN VIEW OF SUCH ADDITIONAL EVIDENCE AS FIL ED BY THE ITA NO. 2581/KOL/2013 THE BAKSARA CO-OP CREDIT SOCIETY LTD 4 LD.DR PRAYED TO REMAND THE CASE TO THE FILE OF THE AO FOR VERIFICATION. 8. THE LD.AR RELIED ON VARIOUS CASE LAWS AND DREW O UR ATTENTION TO THE ORDER OF THE TRIBUNAL DATED 18-11- 2015 IN ITA NO. 1890/KOL/2012 FOR THE AY 2009-10 IN ASSESSEES OWN CASE. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ASSE SSEE HAS CLAIMED DEDUCTION OF RS.1,28,71,885/- U/S. 80P(2)(A )(I) OF THE ACT. THE ASSESSEE EARNED INCOME FROM INVESTMENT ON SAVINGS BANK ACCOUNT. ACCORDING TO THE AO, THE ASSESSEE IS NOT ENTITLED TO CLAIM SUCH DEDUCTION U/S. 80P(2)(A)(I) OF THE AC T AS THE ASSESSEE IS A CO-OPERATIVE BANK AS PROVIDED U/S. 80 P(4) OF THE ACT. FURTHER SECTION 80P OF THE ACT PROVIDES THE DE DUCTION IN RESPECT OF INCOME OF CO-OPERATIVE SOCIETIES AND SUC H CO- OPERATIVE SOCIETY CAN CLAIM OF DEDUCTION OF ANY INC OME EARNED FROM THE ACTIVITIES AS PROVIDED UNDER SUB SECTION ( 2) OF SECTION 80P. IN THE PRESENT CASE, THE ASSESSEE CLAIMED DEDU CTION UNDER SUB CLAUSE(I) IN CLAUSE (A) OF SUB-SECTION(2), WHER EIN IT PROVIDES A DEDUCTION IF THE ASSESSEE CARRIES ON BUS INESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBE RS AND INCOME THEREON CAN BE CLAIMED AS DEDUCTION. AS PER ADDITIO NAL EVIDENCE AS FILED BY THE LD.DR BEING MEMO NO.5433 D ATED 12/09/13 ISSUED BY THE ADDL. REGISTRAR OF CO-OPERA TIVE SOCIETIES, WEST BENGAL, GOES TO SHOW THAT THE ASSE SSEE IS NOT A CO-OPERATIVE SOCIETY AND IS AN URBAN CO-OP BANK. THUS, WE ARE OF THE VIEW THAT SINCE ADDITIONAL EVIDENCE WAS FILED FOR THE FIRST TIME BEFORE US BY THE LD.DR AND THE SAME IS N OT ON RECORD OF THE AO AT THE TIME OF ASSESSMENT PROCEEDINGS, TH EREFORE, WITH THE CONSENT OF THE PARTIES, WE DEEM IT FIT AND PROPER TO ITA NO. 2581/KOL/2013 THE BAKSARA CO-OP CREDIT SOCIETY LTD 5 REMAND THE MATTER TO THE FILE OF THE AO FOR VERIFIC ATION. THUS, THE ADDITIONAL EVIDENCE AS FILED BY THE LD.DR IN ME MO NO.5433 DATED 12/09/13 ISSUED BY THE ADDL. REGISTRAR OF CO -OPERATIVE SOCIETIES, WEST BENGAL IS ADMITTED AND IN THE INTER EST OF JUSTICE THE CASE IS REMITTED TO THE FILE OF THE AO FOR VERI FICATION AND TO PASS AN ORDER IN ACCORDANCE WITH LAW AFTER GIVING T HE ASSESSEE ADEQUATE OPPORTUNITY OF HEARING. THE ASSESSEE SHALL BE AT LIBERTY TO FILE REQUISITE EVIDENCES, IF ANY, TO SUB STANTIATE ITS CLAIM. 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH OCTOBER, 2016. SD/- SD/- WASEEM AHMEED S.S.V ISWANETHRA RAVI ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19 /10/2016 1. THE APPELLANT/DEPARTMENT: INCOME TAX OFFICER, WARD 46(4), 3 GOVT PLACE WEST, KOL-700 001. 2 . THE RESPONDENT/ASSESSEE: THE BAKSRA CO-OPERATIVE C REDIT SOCIETY LTD, LMC SARANI, BAKSARA, HOWRAH-711110. 3. CIT 4. CIT(A) 5. THE DEPARTMENTAL REPRESENTATIVE 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGIS TRAR ** PRADIP SPS INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES, KOLKATA COPY OF THE ORDER FORWARDED TO:-