The Sant Taluka Teachers Co.Op.Credit Society Ltd., V. The Income tax Officer, Lunawada

ITA 2914/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6022 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 09-11-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VILAS SHINDE

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ITA.NO.2914/AHD/2016 / ASSTT.YEAR : 2012-13 THE SANT TALUKA TEACHERS CO-OP. CREDIT SOCIETY LTD. OPP: PANCHAYAT BHAVAN AT & PO : SANTRAMPUR 389 260 DIST. MAHISAGAR, GUJARAT. PAN : AABTS 2076 F VS ITO, LUNAWADA. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI SAKAR SHARMA, AR REVENUE BY : SHRI VILAS SHINDE, SR.DR / DATE OF HEARING : 22/02/2018 / DATE OF PRONOUNCEMENT: 01/03/2018 !'/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.CIT(A),4 VADODARA DATED 20.6.2016 PASSED FOR THE ASSTT.YEAR 2012-13. 2. SOLE ISSUE INVOLVED IN THIS APPEAL IS WHETHER IN TEREST INCOME EARNED ON FIXED DEPOSITS WITH NATIONALIZED BANKS WOULD QUALIF Y FOR DEDUCTION UNDER SECTION 80P(2) OR NOT. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS A C O-OPERATIVE CREDIT SOCIETY ENGAGED IN THE BUSINESS OF BANKING AND PROVIDING CR EDIT FACILITIES TO ITS MEMBERS. ASSESSEE FILED ITS RETURN OF INCOME ON 2. 9.2012 DECLARING TOTAL INCOME AT RS.NIL AFTER CLAIMING DEDUCTION OF RS.1,5 6,39,310/- UNDER SECTION 80P(2) OF THE INCOME TAX ACT. THE CASE OF THE ASSE SSEE WAS SELECTED FOR ITA NO.2914/AHD/2016 2 SCRUTINY ASSESSMENT. IN THE SCRUTINY ASSESSMENT, I T WAS REVEALED TO THE AO THAT MAJOR PART OF THE INCOME OF THE ASSESSEE IS FR OM INTEREST INCOME INCLUDING INVESTMENTS WITH NATIONALIZED BANKS OF RS.5,48,303/ -, WHICH ACCORDING TO THE AO WAS NOT ALLOWABLE UNDER SECTION 80P(2)(D) OF THE ACT SINCE THE SAME WAS EARNED FROM INVESTMENT WITH COMMERCIAL BANK. HE AC CORDINGLY MADE ADDITION TO THE EXTENT TO THE TOTAL INCOME OF THE A SSESSEE. ACTION OF THE AO WAS CONFIRMED BY THE LD.CIT(A). AGGRIEVED ASSESSEE IS NOW BEFORE US. 4. WE HAVE HEARD BOTH PARTIES AND GONE THROUGH RECO RD. IT HAS BEEN CONCEIVED BEFORE US THAT THIS CONTROVERSY HAS BEEN SILENCED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF STATE BANK OF INDIA VS. CIT, 389 ITR 578. THEREFORE, ASSESSEE IS NOT ENTITLED FOR DEDUC TION UNDER SECTION 80P(2) ON THE INTEREST INCOME EARNED FROM THE FIXED DEPOSITS MADE WITH THE NATIONALIZED BANKS. HOWEVER, ANY EXPENDITURE INCURRED BY THE ASS ESSEE FOR EARNING SUCH INCOME COULD BE ALLOWED TO IT. IN OTHER WORDS, THE LD.AO HAS TO DETERMINE THE NET INTEREST INCOME EARNED BY THE ASSESSEE ON SUCH INVESTMENT WITH BANK, AND ONLY THEREAFTER THAT INCOME HAS TO BE EXCLUDED FROM THE ADMISSIBILITY OF DEDUCTION UNDER SECTION 80P(2). ACCORDINGLY, WE AL LOW THE APPEAL OF THE ASSESSEE PARTLY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE COURT ON 1 ST MARCH, 2018 AT AHMEDABAD. SD/- SD/- ( AMARJIT SINGH ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 01/03/2018