Appeal details
Counselvise Citation
[2018] 125 COUNSELVISE.COM (IT) 1413 (ITAT-BANGALORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
8 month(s) 23 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
07-09-2018
Appeal Filed By
Department
Order Result
Allowed
Bench Allotted
C
Assessment Year
2013-2014
Appeal Filed On
14-12-2017
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER A ND SHRI LALIET KUMAR, JUDICIAL MEMBER ITA NO S . 2718 & 2719 /BANG/201 7 ASSESSMENT YEAR S : 201 3 - 14 & 2014 - 1 5 THE INCOME TAX OFFICER, WARD 6 (2) (2), BANGALORE. VS. M/S. JANAHITHA CREDIT CO-OP SOCIETY LTD., NO. 53, 10 TH CROSS, 2 ND MAIN ROAD, MAHALAKSHMIPURAM, BANGALORE 560 086. PAN: AAAJJ0302L APPELLANT RESPONDENT APPELLANT BY : SHRI S.T. SESHADRI, JCIT (DR) RESPONDENT BY : SHRI BALRAM R. RAO, ADVOCATE DATE OF HEARING : 21. 0 8 .2018 DATE OF PRONOUNCEMENT : 07 . 0 9 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER BOTH THESE APPEALS ARE FILED BY THE REVENUE WHICH A RE DIRECTED AGAINST TWO SEPARATE ORDERS OF LD. CIT (A) 6, BANGALORE BOTH DATED 21.07.2017 FOR ASSESSMENT YEARS 2013-14 AND 2014-15. BOTH THESE A PPEALS WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY WAY OF THIS C OMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE GROUNDS RAISED BY THE REVENUE FOR ASSESSMENT YEAR 2013-14 IN ITA NO. 2718/BANG/2017 ARE AS UNDER. 1. THE ORDER OF THE CIT (APPEALS) IS OPPOSED TO LAW AND THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) ERRED IN DELETING THE DISALLOWANCE OF DEDUCT ION U/S 80P(2)(A)(I) MADE BY THE AO, WITHOUT APPRECIATING T HE FACT THAT THE ASSESSEE SOCIETY WAS CARRYING ON BUSINESS OF BANKIN G NATURE. ITA NOS. 2718 & 2719/BANG/2017 PAGE 2 OF 4 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) ERRED IN PLACING RELIANCE UPON THE DECISION OF THE HON'BLE HIGH COURT OF KARNATAKA IN THE CASE OF SHRI BILURU GURUBASAVA PATTINA SAHAKARI SANGHA NIYAMITHA WITHOUT APPRECIAT ING THE FACT THAT THE SLP FILED BY THE DEPARTMENT BEFORE THE HON'BLE APEX COURT IS STILL PENDING JUDGMENT. 4. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URG ED AT THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT THE ORDER OF THE CIT(A), IN SO FAR AS IT RELATES TO THE ABOVE GROUNDS MAY BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTORED. 5. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, TO AMEND OR DELETE ANY OF THE GROUNDS THAT MAY BE URGED AT THE TIME OF HEA RING OF THE APPEAL. 3. SIMILARLY THE GROUNDS RAISED BY THE REVENUE FOR ASSESSMENT YEAR 2014-15 IN ITA NO. 2719/BANG/2017 ARE AS UNDER. 1. THE ORDER OF THE CIT (APPEALS) IS OPPOSED TO LAW AND THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) ERRED IN DELETING THE DISALLOWANCE O F DEDUCTION U/S 80P(2)(A)(I) MADE BY THE AO, WITHOUT APPRECIATI NG THE FACT THAT THE ASSESSEE SOCIETY WAS CARRYING ON BUSINESS OF BANKING NATURE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LEARNED CIT(A) ERRED IN PLACING RELIANCE UPON THE D ECISION OF THE HON'BLE HIGH COURT OF KARNATAKA IN THE CASE OF SHRI BILURU GURUBASAVA PATTINA SAHAKARI SANGHA NIYAMITHA WITHOU T APPRECIATING THE FACT THAT THE SLP FILED BY THE DEP ARTMENT BEFORE THE HON'BLE APEX COURT IS STILL PENDING JUDG MENT. 4. FOR THESE AND SUCH OTHER GROUNDS THAT MAY BE URG ED AT THE TIME OF HEARING, IT IS HUMBLY PRAYED THAT THE ORDER OF THE CIT(A), IN SO FAR AS IT RELATES TO THE ABOVE GROUND S MAY BE REVERSED AND THAT OF THE ASSESSING OFFICER BE RESTO RED. 5. THE APPELLANT CRAVES LEAVE TO ADD, TO ALTER, TO AMEND OR DELETE ANY OF THE GROUNDS THAT MAY BE URGED AT THE TIME OF HEA RING OF THE APPEAL. 4. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THE ASSESSEES CLAIM FOR DEDUCTION U/S. 80P (2) IN RESPECT OF INTEREST INCOME SHOULD B E DECIDED IN FAVOUR OF THE ASSESSEE BECAUSE THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED I N THE CASE OF TUMKUR ITA NOS. 2718 & 2719/BANG/2017 PAGE 3 OF 4 MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO AS REPORTED IN 230 TAXMAN 309. AT THIS JUNCTURE, THE BENCH POINTED OU T THAT ON THIS ISSUE, THERE IS ONE MORE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOC IETY AS REPORTED IN 395 ITR 611 (KARN). THE BENCH POINTED OUT THAT IN BOTH THESE JUDGMENTS, THE ULTIMATE CONCLUSION IS DIFFERENT BECAUSE THE FACTS ARE DIFFERENT BUT THERE IS NO CONTRADICTION IN THESE TWO JUDGMENTS. THE BENCH PO INTED OUT THAT IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. V S. ITO (SUPRA), IT WAS FOUND THAT THE AMOUNT DEPOSITED IN BANK WAS OUT OF ASSESSEES OWN FUNDS AND NOT OUT OF ITS LIABILITY AND THEREFORE, THIS ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE BUT IN THE CASE OF PCIT AND ANOTHER VS. TO TAGARS CO-OPERATIVE SALE SOCIETY (SUPRA), IT WAS FOUND THAT THE AMOUNT DEPOS ITED IN BANK WAS OUT OF ASSESSEES LIABILITY AND NOT OUT OF ASSESSEES OWN FUNDS AND THEREFORE, THIS ISSUE WAS DECIDED AGAINST THE ASSESSEE. THE BENCH OBSERVED THAT THERE IS NO FINDING OF ANY OF THE AUTHORITIES BELOW ON THIS FAC TUAL ASPECT AND THEREFORE, IT IS PROPER TO RESTORE BACK THE MATTER TO THE FILE OF CI T (A) FOR FRESH DECISION AFTER EXAMINING THE FACTS OF PRESENT CASE IN THE LIGHT OF THESE TWO JUDGMENTS OF HON'BLE KARNATAKA HIGH COURT. THE LD. AR OF ASSESS EE AGREED TO THIS PROPOSITION PUT FORWARD BY THE BENCH. THE LD. DR O F REVENUE SUBMITTED THAT ON THIS ASPECT, HE IS ALSO IN AGREEMENT WITH THE PROPO SITION PUT FORWARD BY THE BENCH BUT WHEN THE MATTER IS BEING RESTORED BACK TO THE FILE OF CIT(A), HE SHOULD BE DIRECTED TO EXAMINE THE APPLICABILITY OF THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF THE CITIZEN CO-OPERAT IVE SOCIETY LTD. VS. ACIT AS REPORTED IN 397 ITR 1 ALSO BECAUSE AS PER PARA N O. 9 OF THE ASSESSMENT ORDER, IT IS NOTED BY THE AO THAT ANY PERSON FROM T HE PUBLIC WHO IS DESIROUS OF KEEPING DEPOSITS IN THE INSTITUTION CAN KEEP THE DE POSIT BY BECOMING A NOMINAL MEMBER FOR A NOMINAL FEES OF RS. 10 TO RS. 100/-. H E SUBMITTED THAT THEREFORE, IT HAS TO BE SEEN AS TO WHETHER THE FULL AMOUNT OR PART AMOUNT OF INTEREST INCOME FOR WHICH DEDUCTION IS CLAIMED U/S 80P IS EA RNED BY THE ASSESSEE FROM THE NOMINAL MEMBERS OR NOT IN THE PRESENT YEAR AND THEREFORE, THE ISSUE REGARDING THE APPLICABILITY OF THIS JUDGMENT OF HON BLE APEX COURT RENDERED IN THE CASE OF THE CITIZEN CO-OPERATIVE SOCIETY LTD. V S. ACIT (SUPRA) SHOULD ALSO BE EXAMINED BY CIT (A). IN THE REJOINDER, THE LD. AR OF ASSESSEE ALSO AGREED ITA NOS. 2718 & 2719/BANG/2017 PAGE 4 OF 4 THAT THE CIT (A) MAY BE DIRECTED TO EXAMINE THE FAC TS OF PRESENT CASE IN THE LIGHT OF THIS JUDGMENT OF HONBLE APEX COURT ALSO. 5. IN VIEW OF THE ABOVE DISCUSSION, WE SET ASIDE TH E ORDER OF CIT(A) AND RESTORE THE MATTER BACK TO THE FILE OF CIT(A) FOR FRESH DEC ISION AFTER EXAMINING THE FACTS OF PRESENT CASE FIRST IN THE LIGHT OF JUDGMENT OF H ONBLE APEX COURT RENDERED IN THE CASE OF THE CITIZEN CO-OPERATIVE SOCIETY LTD. V S. ACIT (SUPRA) AND THEN ALSO EXAMINE THE FACTS OF PRESENT CASE IN THE LIGHT OF THESE TWO JUDGMENTS OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE O F TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO (SUPRA) AN D PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY (SUPRA). THEREA FTER THE CIT (A) SHOULD PASS NECESSARY ORDER AS PER LAW AFTER PROVIDING ADE QUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. 6. IN THE RESULT, BOTH THE APPEALS FILED BY THE REV ENUE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DA TE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (LALIET KUMAR) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT ME MBER BANGALORE, DATED, THE 7 TH SEPTEMBER, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT (A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.
