Shree Balaji Urban Co.Op. Credit Society Ltd., Surat V. The Income Tax Officer, Ward-2(2)(4), Surat

ITA 2610/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9390 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 month(s) 15 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: 10-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALBINUS TIRKEY
• Assessee Lawyers: M K PATEL
• Keywords: Business income; Question of law

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER ./ ITA.NO.2610/AHD/2015 / ASSTT. YEAR: 2012-2013 SHREE BALAJI URBAN CO-OP. CREDIT SOCIETY LTD 1 ST FLOOR, NANI HING POLE CHAUTA BAZAR SURAT 395 003. PAN : AAAAS 3446 F VS THE ITO, WARD-2(2)(4) SURAT. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI M.K. PATEL, AR REVENUE BY : SHRI ALBINUS TIRKEY, SR.DR / DATE OF HEARING : 26/02/2016 / DATE OF PRONOUNCEMENT: 26/02/2016 $%/ O R D E R THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAIN ST THE ORDER OF THE LD.CIT(A)-1, SURAT DATED 22.6.2015 PASSED FOR THE A SSESSMENT YEAR 2012-13. 2. THE GROUNDS OF APPEAL OF THE ASSESSEE ARE AS UND ER: 1. THAT ON FACTS AND IN LAW THE LD.CIT(A) HAS GRIE VOUSLY ERRED IN UPHOLDING THAT INTEREST INCOME OF RS.3,24,209/- IS TAXABLE AS INCOME FROM OTHER SOURCES INSTEAD OF BUSINESS INCOME. 2. THAT THE LD.CIT(A) HAS GRIEVOUSLY ERRED IN LAW O N FACTS IN HOLDING THAT THE APPELLANT IS NOT ENTITLED TO DEDUC TION U/S.80P(2)(A)(I) OF THE ACT ON INTEREST INCOME OF RS.3,24,209/-. ITA NO.2610/AHD/2015 2 3. THE LD.COUNSEL FOR THE ASSESSEE, AT THE OUTSET, SUBMITTED THAT THE SOLE ISSUE INVOLVED IN THIS APPEAL IS WITH REGARD TO CLA IM OF DEDUCTION UNDER SECTION 80P OF THE ACT. 4. THE LD.REPRESENTATIVES FAIRLY AGREE THAT THE ISS UE IS COVERED IN FAVOUR OF THE ASSESSEE, BY A DECISION OF THE CO-ORDINATE BENC H OF THIS TRIBUNAL IN THE CASE OF AMAALSAD VIBHAG VIVIDH KARYAKARI SAHKARI KH EDUT MANDALI LIMITED VS. ITO IN ITA NOS.1710 & 1711/AHD/2011 WHEREIN VID E ORDER DATED 13.08.2015, THE TRIBUNAL HAS, 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 ARNATAKAONBLWE KARH HIGH COURT IN THE CASE OF TUMKUR MERCHANTS SOUHAR DA CREDIT CO- OPERATIVE LTD. (SUPRA) HAD DECIDED THE ISSUE IN FAV OUR 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 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 ITA NO.2610/AHD/2015 3 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 OU T BY REVENUE, WE ARE OF THE VIEW THAT THE INTEREST EARNED BY THE ASS ESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80P. WE THEREFORE SET ASID E THE ORDER OF A.O. IN THE RESULT THE GROUND OF THE ASSESSEE IS ALLOWED . 5. THE LD.AR FURTHER RELIED UPON THE DECISION OF TH E ITAT, BENCH IN THE CASE OF MARLI BAZAR VIBHAG VIVIDH KARYAKARI SAHKARI MANDI LTD. VS. ITO, IN ITA NOS.3130/AHD/2014 AND 1834/AHD/2013 ORDER DATED 8.12.2015 WHEREIN ON SIMILAR ISSUE, THE CLAIM OF THE ASSESSEE WAS ALL OWED DEDUCTION UNDER SECTION 80P ACT. HE FURTHER RELIED UPON THE JUDGM ENT OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF GUTTIGEDARARA C REDIT CO-OP. SOCIETY VS. ITO, 377 ITR 464 (KAR) IN SUPPORT OF HIS CONTENTION S. 6. I HAVE CONSIDERED SUBMISSIONS OF BOTH PARTIES AN D GONE THROUGH THE FACTS OF THE CASE AND ALSO CASE LAWS CITED BY THE L D. COUNSEL FOR THE ASSESSEE. I FIND NO REASON TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE ITAT, AHMEDABAD BENCH AND THE HONBLE KARANATAK A HIGH COURT CITED SUPRA ON THIS ISSUE. THEREFORE, RESPECTFULLY THE SA ME, I ALLOW THE CLAIM OF THE ITA NO.2610/AHD/2015 4 ASSESSEE UNDER SECTION 80P AND DISAPPROVE THE ORDER OF THE LD.CIT(A) ON THIS ISSUE. THUS, APPEAL FILED BY THE ASSESSEE IS ALLOW ED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE COURT ON 26TH FEBRUARY, 201 6 AT AHMEDABAD. SD/- ( GEORGE GEORGE K. ) JUDICIAL MEMBER AHMEDABAD; DATED 26/02/2016