The Radhanpur Nagrik Sahkari Sharafi Mandli Ltd., Banaskantha V. The Income Tax Officer, Ward-3, Patan

ITA 2604/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9372 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 26-02-2016
• Assessment Year: 2012-2013
• Appeal Filed On: 09-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALBINUS TIRKEY DR
• Keywords: Question of law

Judgement Text

,, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD . BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER ./ I.T.A. NO.2603 & 2604/AHD/2015 ( / ASSESSMENT YEARS : 2011-12 & 2012-13 RESPECTIVELY) THE RADHANPUR NAGARIK SAHKARI SARAFI MANDLI LTD. 1 ST FLOOR, MANUBHAI COMPLEX OPP.PO RADHANPUR 385 340 (DIST.BK) / VS. THE ITO WARD-2 PATAN 384 265 (N.G.) ./ ./ PAN/GIR NO. : AABAT 4538 J ( / APPELLANT ) .. ( !' / RESPONDENT ) # / APPELLANT BY : SHRI VIVEK CHAVDA, AR !' $# / RESPONDENT BY : SHRI ALBINUS TIRKEY, DR % &'( $)* / DATE OF HEARING 26/02/2016 +,- $)* / DATE OF PRONOUNCEMENT 26/02/2016 / O R D E R BY WAY OF THESE APPEALS, THE ASSESSEE-APPELLANT HA S CHALLENGED THE SEPARATE ORDERS OF THE LD.COMMISSIONER OF INCOME-TA X (APPEALS)- GANDHINAGAR [CIT(A) IN SHORT] IDENTICALLY DATED 0 5/06/2015 PASSED FOR THE ASSESSMENT YEARS 2011-12 & 2012-13 RESPECTIVELY . ITA NOS.2603 & 2604 /AHD/2015 ASST.YEARS 2011-12 & 2012-13 - 2 - 2. BOTH THE PARTIES SUBMITTED THAT THOUGH THE APPEA LS OF THE ASSESSEE RELATE TO TWO DIFFERENT YEARS BUT THE ISSUE INVOLVE D IN BOTH THE APPEALS ARE IDENTICAL EXCEPT FOR THE ASSESSMENT YEAR AND THE AM OUNT INVOLVED. I, THEREFORE, PROCEED TO DISPOSE OF BOTH THE APPEALS B Y A CONSOLIDATED ORDER, FOR THE SAKE OF CONVENIENCE. 3. THE ASSESSEE, IN ITA NO.2603/AHD/2015 FOR ASSESS MENT YEAR 2011-12, HAS RAISED THE FOLLOWING GRIEVANCES :- [1] THE DIRECTION GIVEN TO THE LD.AO BY THE LD.CIT (A) ON PARA6 OF THE APPELLATE ORDER IN RESPECT OF THE PROPOSED ADDI TION OF THE INTEREST UNDER THE HEAD INCOME FROM OTHER SOURCES OF RS.3,78,776/- IS ILLEGAL, UNLAWFUL AND HENCE BAD IN LAW. [2] THE LD.CIT(A) HAS GROSSLY EXCEEDED THE JURISDI CTION IN GIVING THE DIRECTION TO THE LD.AO FOR VERIFYING ANY INTERE ST RECEIVED BY THE APPELLANT ON SHORT TERM DEPOSIT AND GOVERNMENT SECU RITIES AND ASSESS SUCH INTEREST UNDER THE HEAD INCOME FROM OT HER SOURCES WITHOUT GIVING ANY OPPORTUNITY TO THE APPELLANT FOR DEFEND HIS CASE. [3] THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN RELYING ON THE DIRECTION OF HON.SUPREME COURT IN CASE OF TOTGARS CO.OP. SAL ES SOCIETY LTD. WHICH IS NOT RELEVANT IN CASE OF THE APPELLANT . BUT HE HAS NOT CONSIDERED THE DECISION OF JAFARI MOMIN VIKAS CO.OP .CREDIT SOCIETY LTD. OF HON.ITAT(AHD) WHICH IS FAVOUR OF TH E APPELLANT. ITA NOS.2603 & 2604 /AHD/2015 ASST.YEARS 2011-12 & 2012-13 - 3 - [4] IT IS THEREFORE PRAYED THAT THE PROPOSED ADDIT ION OF INTEREST OF RS.3,78,776/- MAY KINDLY BE DELETED LOOKING TO THE MERITS OF THE CASE. 4. THE LD. AUTHORISED REPRESENTATIVE, AT THE OUTSET , SUBMITTED THAT THOUGH THE ASSESSEE HAS RAISED VARIOUS GROUNDS BUT THE ONLY ISSUE WHICH REQUIRE ADJUDICATION IS WITH RESPECT TO DEDUCTION U NDER SECTION 80P(2) OF THE INCOME TAX ACT, 1961. 5. LEARNED REPRESENTATIVE FAIRLY AGREE THAT THE ISS UE IS COVERED IN FAVOUR OF THE ASSESSEE, BY A DECISION OF THE CO-ORD INATE BENCH OF THIS TRIBUNAL IN THE CASE OF AMAALSAD VIBHAG VIVIDH KARY AKARI SAHKARI KHEDUT MANDALI LIMITED VS. ITO IN ITA NOS.1710 & 17 11/AHD/2011 WHEREIN VIDE ORDER DATED 13.08.2015, THE TRIBUNAL H AS, INTER ALIA, OBSERVED AS FOLLOWS :- 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPE CT TO GRANTING OF DEDUCTION UNDER 80P ON THE INTEREST EARNED ON THE D EPOSITS KEPT WITH BANK. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE IS A CO-OPERATIVE SOCIETY. IT IS ASSESSEES SUBMISSION THAT THE AMOUNTS THAT W ERE NOT IMMEDIATELY REQUIRED BY THE ASSESSEE WERE DEPOSITED IN THE BANK SO AS TO EARN INTEREST. THE AFORESAID SUBMISSION OF THE ASSESSEE HAS NOT BEEN CONTROVERTED BY REVENUE. WE FIND THAT THE HONBLE K ARNATAKA HIGH COURT IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CRED IT CO-OPERATIVE LTD. (SUPRA) HAD DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER: 10. IN THE INSTANT CASE, THE AMOUNT WHICH WAS INVE STED IN BANKS TO EARN INTEREST WAS NOT AN AMOUNT DUE TO ANY MEMBERS. IT WAS NOT THE LIABILITY. IT WAS NOT SHOWN AS LIABILIT Y IN THEIR ACCOUNT. IN FACT THIS AMOUNT WHICH IS IN THE NATURE OF PROFITS AND ITA NOS.2603 & 2604 /AHD/2015 ASST.YEARS 2011-12 & 2012-13 - 4 - GAINS, WAS NOT IMMEDIATELY REQUIRED BY THE ASSESSEE FOR LENDING MONEY TO THE MEMBERS, AS THERE WERE NO TAKERS. THER EFORE, THEY HAD DEPOSITED THE MONEY IN A BANK SO AS TO EARN INT EREST. THE SAID INTEREST INCOME IS ATTRIBUTABLE TO CARRYING ON THE BUSINESS OF BANKING AND THEREFORE IT IS LIABLE TO BE DEDUCTED I N TERMS OF SECTION 80P (1) OF THE ACT. I FACT SIMILAR VIEW IS TAKEN BY THE ANDHRA PRADESH HIGH COURT IN THE CASE OF CIT V/S. A NDHRA PRADESH STATE CO-OPERATIVE BANK LTD., [2011] 200 TA XMAN 220/12 TAXMANN.COM 66. IN THAT VIEW OF THE MATTER, THE ORDER PASSED BY THE APPELLATE AUTHORITIES DENYING THE BEN EFIT OF DEDUCTION OF THE AFORESAID AMOUNT IS UNSUSTAINABLE IN LAW. ACCORDINGLY IT IS HEREBY SET ASIDE. THE SUBSTANTIAL QUESTION OF LAW IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAIN ST THE REVENUE. 8. WE ARE OF THE VIEW THAT THE FACTS OF THE CASE A RE IDENTICAL TO THAT IN THE CASE OF TUMKAR MERCHANTS SOUHARDA CREDIT CO- OPERATIVE LTD. (SUPRA) WHICH HAS BEEN DECIDED BY HONBLE KARNATAKA HIGH COURT AND THEREFORE CONSIDERING THE FACTS OF THE PRESENT CASE IN THE LIGHT OF THE AFORESAID DECISION OF HONBLE KARNATAKA HIGH COURT AND IN THE ABSENCE OF ANY CONTRARY BINDING DECISION POINTED OUT BY REV ENUE, WE ARE OF THE VIEW THAT THE INTEREST EARNED BY THE ASSESSEE IS EL IGIBLE FOR DEDUCTION UNDER SECTION 80P. WE THEREFORE SET ASIDE THE ORDE R OF A.O. IN THE RESULT THE GROUND OF THE ASSESSEE IS ALLOWED. 6. I SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE M ATTER THAN THE VIEW SO TAKEN BY THE CO-ORDINATE BENCH(SUPRA). THEREFO RE, RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE TRIBUNAL DATED 13.08.2015, I DISAPPROVE THE ORDER OF THE LD. CIT(A). THUS, APPE AL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2011-12 IS ALLOWED. 7. SINCE THE FACTS OF THE CASE FOR ASSESSMENT YEAR 2012-13 ARE IDENTICAL TO THE FACTS FOR ASSESSMENT YEAR 2011-12 AS ADMITTED BY BOTH THE PARTIES, THEREFORE, FOR THE REASONS STATED HERE INABOVE, WHILE DECIDING ITA NOS.2603 & 2604 /AHD/2015 ASST.YEARS 2011-12 & 2012-13 - 5 - THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 201 1-12, FOR SIMILAR REASONS, I ALLOW THE GROUNDS OF THE ASSESSEE RAISE D FOR ASSESSMENT YEAR 2012-13. 8. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH FEBRUARY, 2016 AT AHMEDABAD. SD/- ( ) ( GEORG E GEORGE K. ) JUDICIAL MEMBER AHMEDABAD; DATED 26/ 02 /2016 1*..&,'.&../ T.C. NAIR, SR. PS. !'#$%&'(!'% / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. 345) % 6) / CONCERNED CIT 4. % 6) ( ) / THE CIT(A)-GANDHINAGAR 5. 7'89!)&45 , *45 - , 3 / DR, ITAT, AHMEDABAD 6. 9; <( / GUARD FILE. !' / BY ORDER, '7)!) //TRUE COPY// / ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION .. 26.2.15 (COVERED CASES) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 26.2.15 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.26.2.15 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 26.2.15 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER