Gujarat Laxmi Majur Kamgar Sahakari Mandli Ltd., Gandhinagar V. The Income tax Officer,Ward-2, Gandhinagar

ITA 2756/AHD/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 1883 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-12-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 01-12-2009
• Assessment Year: 2006-2007
• Appeal Filed On: 06-10-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C
• Assessee Lawyers: MANOJ LEKINWALA
• Keywords: Business income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER DATE OF HEARING:10.12.2009 DRAFTED ON: 10.12.2 009 ITA NO.2756/AHD/2009 ASSESSMENT YEAR : 2006-2007 GUJARAT LAXMI MAJUR KAMGAR SAHAKARI MANDALI LTD., C/O. CA. MANOJ LEKINWALA, PLOT NO.289, NR. GH-6, SECTOR-29, GANDHINAGAR-382029 VS. ITO-WARD-2, AT BLOCK NO.14, 5 TH FLOOR, UDHYOGHBHAVAN, SECTOR-11, GANDHINAGAR. PAN/GIR NO. : AAAAG 1218P (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI MANOJ LEKINWALA RESPONDENT BY: SHRI M.C.PANDIT SR. D.R. O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD.CIT(APPEALS), GANDHINAGAR, DATED 02.07.2009 IN A PPEAL NO.CIT(A)GNR/249/2008-09. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL OF THE AS SESSEE IS THAT WHETHER THE INTEREST INCOME EARNED ON FIXED DEPOSITS KEPT W ITH THE GOVERNMENT DEPARTMENT AS TENDER DEPOSIT, EARNEST MONEY DEPOSIT , SECURITY DEPOSIT, ETC. IS BUSINESS INCOME OR INCOME FROM OTHER SOURCES THEREB Y DISALLOWING THE DEDUCTION UNDER SECTION 80P(2)(A)(VI) OF THE ACT. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS THE CO-OPERATIVE SOCIETY, HAVING MEMBERS OF LABOUR COMMUNITY. THE AS SESSEE IS ENGAGED IN ITA NO .2756/AHD/2009 M/S.GUJARAT LAXMI MAJUR KAMGARSAHAKARI MANDLI LTD. ASST.YEAR -2006-07 - 2 - DRAINAGE AND PIPE LINE WORK OF THE GOVERNMENT DEPAR TMENT. THE ASSESSEE HAD PUT DEPOSIT OR GIVEN FIXED DEPOSIT OF BANK WITH THE GOVERNMENT DEPARTMENT AS TENDER DEPOSIT, EARNEST MONEY DEPOSIT , SECURITY DEPOSIT, ETC. AND ON SUCH DEPOSIT IT EARNED INTEREST INCOME. THE FIXED DEPOSIT IS ALSO GIVEN TO GOVERNMENT DEPARTMENT FOR REGISTRATION OF SOCIET Y AS A CONTRACTOR SO THAT GOVERNMENT WORK COULD BE OBTAINED AND EXECUTED. TH E LD. ASSESSING OFFICER HAD CONSIDERED INTEREST INCOME OF RS.1,67, 218/- EARNED ON SUCH DEPOSITS AS INCOME FROM OTHER SOURCES AND NOT INCOM E FROM BUSINESS AND THEREBY DISALLOWED DEDUCTION FOR THE SAME UNDER SEC TION 80P(2)(A)(VI) OF THE ACT. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CONFIRMED THE ORDER OF THE LEARNED ASSESSING OFFICE R. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RE CORD. BOTH THE PARTIES AGREED BEFORE US THAT THE ISSUE IS COVERED BY THE D ECISION OF THIS TRIBUNAL IN THE ASSESSEES OWN CASEIN ITA NO.1065/AHD/2008 IN A SSESSMENT YEAR 2002- 03, 1192/AHD/2008 IN ASSESSMENT YEAR 2004-05 AND 3 575/AHD/2008 IN ASSESSMENT YEAR 2005-06 BY THE CONSOLIDATED ORDER O F THE TRIBUNAL DATED 04.09.2009 IN FAVOUR OF THE ASSESSEE. WE FIND THAT THE TRIBUNAL IN THE SAID ORDER HAS HELD AS UNDER: THE ASSESSEE HAD PUT DEPOSIT OR GIVEN FIXED DEPOSI T OF BANK WITH THE GOVERNMENT DEPARTMENT AS TENDER DEPOSIT, EARNEST M ONEY DEPOSIT, SECURITY DEPOSIT ETC. AND ON SUCH DEPOSIT IT EARNE D INTEREST INCOME. THE ASSESSING OFFICER HAD CONSIDERED INTEREST INCOME AS INCOME FROM OTHER SOURCES AND NOT INCOME FROM BUSINESS AND TAXED IT A CCORDINGLY. THE ASSESSEE HAD TAKEN DEPOSIT OF BANK IN NORMAL COURSE OF HIS BUSINESS AND GIVEN FD TO GOVERNMENT DEPARTMENT TO COMPLY WITH TH E TERMS OF SANCTION OF WORK EXECUTED BY THE MANDLI. WE ARE OF THE VIEW THAT THE INTEREST INCOME OF THE ASSESSEE IS BUSINESS INCOME OF THE MANDLI AND THE INTEREST IS NOT FOR THE INVESTMENT OF SURPLUS FUND BUT IT IS FOR THE BUSINESS INCOME OF THE MANDLI. ON THIS INCOME THE ASSESSEE I S ENTITLED FOR DEDUCTION U/S.80P(2)(A)(VI) AND ACCORDINGLY WE DIRE CT THE ASSESSING OFFICER TO ALLOW THE CLAIM OF THE ASSESSEE. ITA NO .2756/AHD/2009 M/S.GUJARAT LAXMI MAJUR KAMGARSAHAKARI MANDLI LTD. ASST.YEAR -2006-07 - 3 - 5. THE FACTS BEING IDENTICAL, RESPECTFULLY FOLLOWIN G THE PRECEDENT, WE DIRECT THE LEARNED ASSESSING OFFICER TO ALLOW DEDUC TION UNDER SECTION 80P(2)(A)(VI) OF THE ACT ON INTEREST INCOME EARNED BY THE ASSESSEE ON FIXED DEPOSITS KEPT WITH GOVERNMENT DEPARTMENT AS TENDER DEPOSIT, EARNEST MONEY DEPOSIT, SECURITY DEPOSIT ETC.. THUS, THE GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE H EARING IN THE PRESENCE OF THE PARTIES ON 10.12.2009. SD/- SD/- ( MAHAVIR SINGH) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 10.12.2009 PREPARED AND COMPARED BY : PARAS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)- 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD