The ACIT,B.K.Circle, Patan V. Jafari Momin Vikas Co-op. Credit Co.Op.Society Ltd., Palanpur

ITA 2665/AHD/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 0491 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 29-11-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y P VERMA
• Assessee Lawyers: MUKESH M PATEL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD B BENCH AHMEDABAD BEFORE SHRI G.C.GUPTA , VICE PRESIDENT AND SHRI T.R. MEENA, ACCOUNTANT MEMBER ITA NOS. 2665, 2666 & 2667/AHD/2012 ASSESSMENT YEARS :2007-08, 08-09 & 09- 10 (RESPECTIVELY) ACIT, B.K. CIRCLE, PALANPUR V/S . THE JAFRI MOMIN VIKAS CREDIT CO.OP. SOCIETY LTD., STATION ROAD, NEAR MASJID, PALANPUR. PAN NO. AA E F J2304G (APPELLANT) .. (RESPONDENT) BY APPELLANT SHRI Y. P. VERMA, SR. D.R. /BY RESPONDENT SHRI MUKESH M. PATEL, A.R. /DATE OF HEARING 22.01.2013 /DATE OF PRONOUNCEMENT 01.03.2013 O R D E R PER : T.R.MEENA, ACCOUNTANT MEMBER THESE ARE THREE APPEALS AT THE BEHEST OF REVENUE WH ICH HAVE EMANATED FROM THE ORDERS OF CIT(A)-XX, AHMEDABAD, D ATED 21.09.2012 FOR ALL THREE ASSESSMENT YEARS. ALL THREE APPEALS WERE HEA RD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS COMMON ORDER FOR THE SAK E OF CONVENIENCE. THE SOLE GROUND OF APPEAL IS AGAINST DELETING THE DISAL LOWANCE OF RS. 21,76,526/- FOR A.Y. 07-08, RS.18,23,372/- FOR A.Y. 08-09 & RS. 21,98,927/- FOR A.Y. 09-10 MADE U/S. 80P(2)(A)(I) OF THE ACT. ITA NOS. 2665, 2666 & 2667/AHD/2012 A.YS. 07-08, 08-09 & 09-10 PAGE 2 2. THE APPELLANT IS A SOCIETY IS CARRYING OUT BUSIN ESS OF BANKING AND CLAIMED DEDUCTION U/S. 80P(2) OF THE ACT. THE A.O. OBSERVED THAT SECTION 2(24) OF THE ACT HAS BEEN AMENDED W.E.F. 1.4.2007, WHICH READS AS UNDER: (VIIA) THE PROFIT AND GAIN OF ANY BUSINESS OF BANK ING (INCLUDING PROVIDING CREDIT FACILITY) CARRIED ON BY CO-OPERATI VE SOCIETY WITH ITS MEMBERS. FURTHER, SUB-SECTION (4) OF 80P INSERTED WITH EFFEC T FROM 1.4.2007 READS AS UNDER: (4) THE PROVISION OF THIS SECTION SHALL NOT APPLY IN RELATION TO ANY CO-OPERATIVE BANK OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY, OR A PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVEL OPMENT BANK. AFTER ANALYZING BOTH THE SECTIONS, THE LD. A.O. FOU ND THAT THE APPELLANT IS NOT A CO-OPERATIVE SOCIETY NEITHER A PRIMARY AGRICULTURAL CREDIT SOCIETY NOR A PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BAN K. THE CLARIFICATION ISSUED BY THE CBDT IS ALSO NOT APPLICABLE IN CASE O F ASSESSEE. AS PER A.O., THE AMENDED PROVISION IS APPLICABLE ON THE APPELLAN T AND INCOME EARNED BY THE CO-OPERATIVE CREDIT SOCIETY IS NOT EXEMPT UNDER THE PROVISIONS OF SECTION 80P(2)(A)(I) OF THE ACT, BUT COVERS U/S. 80P(4) OF THE IT ACT. THUS, HE DENIED THE DEDUCTION U/S. 80P(2)(A)(I) OF THE ACT IN ALL T HE YEARS. 3. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. C IT(A), WHO HAD PARTLY ALLOWED THE APPEAL AFTER CONSIDERING THE DETAILED R EPLY OF THE APPELLANT AND ALSO CBDT CLARIFICATION VIDE LETTER DATED 09.05.200 7 IN F.NO. 133/06/2007-TPL ISSUED. HE ALSO CONSIDERED RESPECTED BANGALORE B BENCH DECISION IN CASE OF ACIT VS. BANGALORE COMMERCIAL TRANSPORT CREDIT CO-O PERATIVE SOCIETY LTD. IN ITA NO. 1069/BANG/2010 FOR A.Y. 2007-08, DATED 0 8.04.2011, WHEREIN THE ITA NOS. 2665, 2666 & 2667/AHD/2012 A.YS. 07-08, 08-09 & 09-10 PAGE 3 DIFFERENCE BETWEEN THE CO-OPERATIVE BANK AND CO- OPERATIVE SOCIETY HAS BEEN DISCUSSED IN DETAIL. HE ALSO RELIED IN CASE O F DY.CIT, CENTRAL CIRCLE, PANAJI, GOA VS. JAYALAKSHMI MAHILA VIVIDODESHAGALA SOUHARDA SAHAKARI LTD. (137 ITD 163), ITO, WARD-1(4) VS. JANKALYAN NAGRI S AHAKARI PAST SANSTHA LTD. (24 TAXMAN 127), ITAT, PUNE BENCH & JAFARI MOM IN VIKASH CO-OP. CREDIT SOCIETY LTD. VS. CIT, AHMADABAD TRIBUNAL, OR DER DATED 20.06.2012 IN ITA NO. 902/AHD/2012. LD. CIT(A) HAS HELD AS UNDER: KEEPING IN VIEW THE ABOVE MENTIONED CBDTS CIRCUL AR, CLARIFICATION AND THE CASE-LAWS, AOS FINDING THAT IN VIEW OF THE AMENDMENTS MADE IN SECTION 2(24) AND 80P, APPELLANT IS NOT ELIGIBLE FOR DEDUCTION U/S.80P IS NOT IN ACCORDANCE WITH LAW. IN VIEW OF THE AMENDMENT TO SEC.2(24), THE PROFITS AND GAIN S OF THE APPELLANT ARE ITS INCOME. HOWEVER, SINCE THE APPEL LANT IS NOT COVERED BY SECTION 80P(4), IT IS ENTITLED TO THE DE DUCTION U/S. 80P(2). THE DISALLOWANCE IS DELETED. AO IS DIRECTED TO ALL OW THE DEDUCTION IN ACCORDANCE WITH THE SAID SECTION. HOWEVER, HONBLE SUPREME COURT DECISION IN CASE OF TOTGARS CO-OPERATIVE SALE SOCIETY LTD. VS. ITO (322 ITR 283) (2010), WHEREIN THE INTEREST INCOME ON SHORT TERM DEPOSITS AND IN GOVERNMENT SECURITIES IS TO BE TREATED AS INCOME FROM OTHER SOURCES. THUS, THE CIT(A) ALLOWE D THE APPEAL PARTLY. 4. NOW THE REVENUE IS BEFORE US. LD. SR. D.R. RELI ED UPON THE ORDER OF THE A.O., HOWEVER, LD. COUNSEL FOR THE APPELLANT RELIED ON THE ORDER OF THE CBDT CIRCULAR AS WELL AS VARIOUS CASE LAWS CITED BY THE APPELLANT BEFORE THE CIT(A) AND REQUESTED TO CONFIRM THE ORDER OF THE CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE LD. CIT(A) HAS VERIFIED THE NATURE OF ACTIVITY AND HELD THAT THE ITA NOS. 2665, 2666 & 2667/AHD/2012 A.YS. 07-08, 08-09 & 09-10 PAGE 4 ASSESSEE COMPANY IS A CO-OPERATIVE SOCIETY NOT IN B ANKING BUSINESS. THE PROVISIONS OF SECTION 80P(4) WILL NOT HAVE ANY APPL ICATION IN THE ASSESSEES CASE. THEREFORE, IT IS ENTITLED TO DEDUCTION U/S. 80P(2)(A)(I) OF THE ACT. THUS, WE CONFIRM THE ORDER OF THE CIT(A). 6. IN THE COMBINED RESULT, THE REVENUES APPEALS AR E DISMISSED IN ALL ASSESSMENT YEARS. THESE ORDERS PRONOUNCED IN OPEN COURT ON 01.03.2013 SD/- SD/- (G.C.GUPTA) (T.R. MEENA) VICE PRESIDENT ACCOUNTANT MEMBER TRUE COPY S.K.SINHA ! ! ! ! '! '! '! '! / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '(' ) * / CONCERNED CIT 4. *- / CIT (A) 5. !./ ), ) , 12( / DR, ITAT, AHMEDABAD 6. /45 67 / GUARD FILE. BY ORDER/ , 8/ 1 ': ) , 12( ;