M/s. Kanyakaparameshwari Credit Co-operative Society Limited, Chitradurga V. Income Tax Officer, Ward-2, Chitradurga

ITA 2900/BANG/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5437 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 28-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L V BHASKAR REDDY
• Assessee Lawyers: S V RAVISHANKAR
• Keywords: Reasonable cause
• Section: 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 2900 / BANG/201 7 ASSESSMENT YEAR : 2012 - 13 M/S. KANYAKAPARAMESHWARI CREDIT CO-OPERATIVE SOCIETY LTD., NEHRU CIRCLE, HIRIYUR, CHITRADURGA DISTRICT. PAN: AAAAK3692D VS. THE INCOME TAX OFFICER, WARD 2, CHITRADURGA. APPELLANT RESPONDENT APPELLANT BY : SHRI S.V. RAVISHANKAR, ADVOCATE RESPONDENT BY : SHRI L.V. BHASKAR REDDY, ADDL. CIT (DR) DATE OF HEARING : 2 2 . 0 3 .2018 DATE OF PRONOUNCEMENT : 22 . 0 3 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE ORDER OF LD. CIT(A),DAVANGEREDATED29.06.2017 FOR ASSESSMENT YEAR 2012-13. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDER OF THE LEARNED COMMISSIONER OF INCOME- TAX [APPEALS], DAVANGERE, IN SO FAR IT IS AGAINST THE APPELLANT IS OPPOSED TO LAW, WEIGHT OF EVIDENCE, FACTS AND CIRCUMSTANCES OF THE APPELLANT'S CASE. 2. THE APPELLANT DENIES ITSELF LIABLE TO BE ASSESSE D OVER AND ABOVE THE INCOME RETURNED INCOME BY THE APPELLANT OF RS.NIL/- AFTER CLAIMING ELIGIBLE DEDUCTION UNDER SECTION 80 P [2] OF THE AC T, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] IS NOT JUSTIFIED IN LAW IN DENYING THE ELIGIBLE DEDUCTION CLAIMED BY THE APPELLANT UNDER SECTION 80 P [2] OF THE ACT AMOUNTING TO RS. 8,96,580/- UNDER THE PROVISIONS OF SECTION 80 P [2][D] OF THE ACT BE ING THE INTEREST EARNED BY THE APPELLANT ON DEPOSITS MADE BY THE APP ELLANT ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] FAILED TO APPRECIATE THAT THE PROVISIONS OF SECTION 80P OF TH E ACT ALLOWS 'THE WHOLE OF THE AMOUNT OF PROFITS AND GAINS OF BUSINES S ATTRIBUTABLE TO ITA NO.2900/BANG/2017 PAGE 2 OF 4 ANY ONE OR MORE OF SUCH ACTIVITIES' IN MAKING A CLA IM OF DEDUCTION, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] FAILED TO APPRECIATE THAT THE INTEREST INCOME EARNED BY THE A PPELLANT OUT OF THE DEPOSITS KEPT IN THE BANKS AND CO-OPERATIVE BANKS A RE ALL OUT OF THE MONIES OF THE MEMBERS OF THE APPELLANT SOCIETY, CON SEQUENTLY THE LEARNED AUTHORITIES BELOW OUGHT TO HAVE ALLOWED DED UCTION UNDER SECTION 80 P [2] OF THE ACT ON SUCH INTEREST INCOME EARNED BY THE APPELLANT ON THE FACTS AND CIRCUMSTANCES OF THE CAS E. 6. THE LEARNED COMMISSIONER OF INCOME-TAX [APPEALS] , IS NOT JUSTIFIED IN CONFIRMING THE ADDITIONS MADE BY THE LEARNED ASS ESSING OFFICER AND TREATING THE SAID ELIGIBLE RECEIPTS OF INTEREST EAR NED FROM BANKS AND CO-OPERATIVE BANKS AS INCOME UNDER THE HEAD 'INCOME FROM OTHER SOURCES' AS PER THE PROVISIONS OF SECTION 56 OF THE ACT, ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 7. WITHOUT PREJUDICE TO THE RIGHT TO SEEK WAIVER AS PER THE PARITY OF REASONING OF THE DECISION OF THE HON'BLE APEX COURT IN THE CASE OF KARANVIR SINGH 349 ITR 692, THE APPELLANT DENIES IT SELF LIABLE TO BE CHARGED TO INTEREST UNDER SECTION 234 B OF THE INCO ME TAX ACT UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE. FURTHER TH E LEVY OF INTEREST UNDER SECTION 234 B OF THE ACT IS ALSO BAD IN LAW A S THE PERIOD, RATE, QUANTUM AND METHOD OF CALCULATION ADOPTED ON WHICH INTEREST IS LEVIED ARE ALL NOT DISCERNIBLE AND ARE WRONG ON THE FACTS OF THE CASE. 8. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, SUBSTI TUTE AND DELETE ANY OR ALL OF THE GROUNDS OF APPEAL URGED ABOVE. 9. FOR THE ABOVE AND OTHER GROUNDS TO BE URGED DURI NG THE HEARING OF THE APPEAL THE APPELLANT PRAYS THAT THE APPEAL BE A LLOWED IN THE INTEREST OF EQUITY AND JUSTICE. 3. THIS APPEAL IS FILED LATE BY THE ASSESSEE AND TH E DELAY IS OF 77 DAYS. THE ASSESSEE HAS SUBMITTED AN APPLICATION FOR CONDONATI ON OF DELAY ALONG WITH AN AFFIDAVIT. IN THE SAME, IT IS STATED THAT THE ORDER OF CIT(A) ORDER DATED 29.06.2017 WAS RECEIVED BY THE ASSESSEE ON 14.08.20 17 AND THEREFORE, THE APPEAL AGAINST THIS ORDER WAS TO BE FILED BEFORE TH E TRIBUNAL ON OR BEFORE 13.10.2017 BUT THE SAME WAS FILED ON 28.12.2017 AND THEREFORE, THERE IS DELAY OF 77 DAYS IN FILING THE APPEAL. REGARDING THE REA SONS FOR THIS DELAY, IT IS SUBMITTED THAT SOON AFTER THE RECEIPT OF THIS APPEL LATE ORDER IN AUGUST 2017, THE ASSESSEE COULD NOT FILE THE APPEAL IN TIME BECAUSE THE CHARTERED ACCOUNTANT WAS PREOCCUPIED WITH THE TAX AUDIT AND COULD NOT GU IDE THE ASSESSEE AS REGARD TO THE NEXT COURSE OF ACTION AND LATER, THE CA ASKE D THE ASSESSEE TO APPROACH ITA NO.2900/BANG/2017 PAGE 3 OF 4 THE PRESENT COUNSEL AND ASKED THE ASSESSEE TO PREFE R AN APPEAL BEFORE THE TRIBUNAL. IT IS SUBMITTED THAT UNDER THESE FACTS, THISDELAY OF 77 DAYS SHOULD BE CONDONED. THE LD. DR OF REVENUE SUBMITTED THAT THE RE IS NO REASONABLE CAUSE SHOWN BY THE ASSESSEE REGARDING THIS DELAY OF 77 DA YS AND THEREFORE, THE DELAY SHOULD NOT BE CONDONED. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CONS IDERING THE FACTS OF THE PRESENT CASE, I FEEL IT PROPER TO CONDONE THISDELAY OF 77 D AYS AND ACCORDINGLY, I CONDONE THE DELAY AND ADMIT THE APPEAL. 5. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT AS P ER PARA 4D OF THE ORDER OF CIT(A), THE ASSESSEE SOCIETY HAS EARNED INTEREST ON DEPOSITS WITH BANKS FOR ITS SURPLUS FUNDS. HE SUBMITTED THAT THE LD. CIT(A) HA S FOLLOWED THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE O F PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY AS REPORTED IN 3 95 ITR 611 (KARN) BUT IN THE FACTS OF THE PRESENT CASE, THE JUDGMENT OF HON' BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF TUMKUR MERCHANTS SOUHARDA C REDIT COOPERATIVE LTD. VS. ITO AS REPORTED IN 230 TAXMAN 309 IS APPLICABLE AND THEREFORE, THE ADDITION MADE BY THE AO AND CONFIRMED BY CIT(A) SHO ULD BE DELETED. AS AGAINST THIS THE LD. DR OF REVENUE SUPPORTED THE OR DER OF CIT(A). 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS. I HAVE GONE THROUGH THE JUDGMENTS OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE O F PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY(SUPRA) AND TUMKU R MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO(SUPRA). I FIND THA T THERE IS NO CONFLICT IN THESE TWO JUDGMENTS OF HON'BLE KARNATAKA HIGH COURT. BOT H THESE JUDGMENTS ARE ON SAME LINE BUT ULTIMATE CONCLUSION IS DIFFERENT BECA USE THE FACTS ARE DIFFERENT. IN THE CASE OF PCIT AND ANOTHER VS. TOTAGARS CO-OPERAT IVE SALE SOCIETY(SUPRA), IT WAS NOTED THAT THE AMOUNT WHICH WAS INVESTED WAS NO T THE OWN MONEY OF THE ASSESSEE BUT IT WAS LIABILITY OF THE ASSESSEE SOCIE TY AND THEREFORE, THE ISSUE WAS DECIDED AGAINST THE ASSESSEE WHEREAS IN THE CAS E OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO (SUPRA), I T WAS NOTICED THAT THE MONEY DEPOSITED IN BANK WAS NOT LIABILITY OF THE AS SESSEE AND IT WAS ASSESSEES OWN MONEY AND THEREFORE, THE ISSUE WAS D ECIDED IN FAVOUR OF THE ITA NO.2900/BANG/2017 PAGE 4 OF 4 ASSESSEE. IN THE PRESENT CASE, A CATEGORICAL FINDI NG WAS GIVEN BY CIT(A) THAT THE AMOUNT DEPOSITED IN BANK WAS SURPLUS OF THE ASS ESSEE AND THIS IS NOT THE CASE OF THE REVENUE THAT AMOUNT WAS LIABILITY OF TH E ASSESSEE. HENCE IN MY CONSIDERED OPINION, THE JUDGMENT OF HON'BLE KARNATA KA HIGH COURT RENDERED IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPER ATIVE LTD. VS. ITO(SUPRA) IS APPLICABLE AND NOT THE JUDGMENT OF HO N'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF PCIT AND ANOTHER VS. TOTAGA RS CO-OPERATIVE SALE SOCIETY(SUPRA). RESPECTFULLY FOLLOWING THIS JUDGME NT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF TUMKUR MERCHANTS SOUH ARDA CREDIT COOPERATIVE LTD. VS. ITO(SUPRA), I DECIDE THE ISSUE IN FAVOUR O F THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 22 ND MARCH, 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.