The Income Tax Officer Ward-6(3)(2), Bangalore V. M/s Ministry of Communication Employee Co-operative Housing Society , Bangalore

ITA 2940/BANG/2018

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 1671 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s) 1 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-12-2020
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 29-10-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: BALARAM R RAO
• Assessee Lawyers: ELAMURUGU
• Keywords: Opportunity of being heard
• Section: 80P; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.2940/BANG/2018 ASSESSMENT YEAR : 2007 08 THE INCOME TAX OFFICER, WARD-6(3)(2), BENGALURU. VS. M/S MINISTRY OF COMMUNICATION EMPLOYEES CO-OPERATIVE HOUSING SOCIETY, NO.419, 1 ST FLOOR, 12 TH CROSS, SADASHIVANAGAR, BENGALURU-560 080. PAN AAAAM 0353 M APPELLANT RESPONDENT APPELLANT BY : SHRI BALARAM R RAO, ADVOCATE RESPONDENT BY : SHRI ELAMURUGU, JCIT (DR) DATE OF HEARING : 02-12-2020 DATE OF PRONOUNCEMENT : 11-12-2020 ORDER PER BEENA PILLAI, JUDICIAL MEMBER PRESENT APPEAL HAS BEEN FILED BY REVENUE AGAINST OR DER DATED 06/07/2018 PASSED BY LD. CIT (A)-11, BANGALOR E FOR ASSESSMENT YEAR 2007-08 ON FOLLOWING GROUNDS OF APP EAL: 1.THE ORDER OF THE CIT (APPEALS) IS OPPOSED TO LAW AND THE FACTS AND CIRCUMSTANCES OF THE CASE. 2.ON THE FACTS AND CIRCUMSTANCES OF THE CASE, WHETH ER THE LD CIT(A) IS JUSTIFIED IN HOLDING THAT THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S 80P (2)(D) OF THE ACT WHEREIN THE ASS ESSEE IS NOT IN THE BUSINESS OF BANKING OR NOT PROVIDING CREDIT FACILIT IES TO ITS MEMBERS? PAGE 2 OF 5 ITA NO.2940/BANG/2018 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, WHET HER THE LD CIT(A) IS JUSTIFIED IN HOLDING THAT THE ASSESSEE IS ELIGIBLE TO CLAIM DEDUCTION U/S 80P OF THE ACT WHEREIN THE ASSESSEE H AS DERIVED INTEREST INCOME FROM THE INVESTMENT IN DIFFERENT CO-OPERATIV E BANKS AND NOT FROM COOPERATIVE SOCIETIES? 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 HEARING OF THE APPEAL. BRIEF FACTS OF THE CASE ARE AS UNDER: 2. ASSESSEE IS A CO-OPERATIVE SOCIETY AND FILED ITS RETURN OF INCOME ON 31/03/2008 DECLARING GROSS TOTAL INCOME O F RS.2,36,22,915/-. THE TOTAL INCOME OF RUPEES IN NI L WAS DECLARED AFTER CLAIMING DEDUCTION UNDER SECTION 80 P OF THE ACT. 3. LD.AO DISALLOWED RS.2,52,46,536/- BEING INTEREST EARNED FROM OTHER COOPERATIVE SOCIETIES.LD.AO DISALLOWED T HE CLAIM U/S.80 P(2) (A)(I) OF THE ACT, AS AGAINST THE CLAIM OF ASSESSEE U/S.80P(2)(D) OF THE ACT. 4. AGGRIEVED BY ORDER OF LD.AO, ASSESSEE PREFERRED APPEAL BEFORE LD.CIT(A). 5. LD.CIT(A) HELD AS UNDER: ON GOING THROUGH THE APPELLANTS CLAIM, THE LD.AO H AS ERRED AND ALLOWED THE DEDUCTION CLAIMED BY THE APPELLANT SAYI NG THAT THE APPELLANT IS NOT ELIGIBLE TO CLAIM DEDUCTION U/S.80 P(2)(A)(I) WHEN THE APPELLANT HAS CLAIMED DEDUCTION U/S.80P(2)(D). ALSO , THE LD.AO HAS QUOTED CASE OF TOTGARS' CO-OPERATIVE SALE SOCIETY L TD. V. ITO WHERE THE CLAIM IS U/S 8OP(2)(A)(I) DOES NOT HOLD GOOD FOR TH E PRESENT CASE AS THE APPELLANT HAS CLAIMED DEDUCTION U/S.80P(2)(D). ON C ONSIDERING THE SUBMISSIONS MADE BY THE AR OF THE APPELLANT THAT TH E DEDUCTION HAS BEEN CLAIMED U/S.80P(2)(D) WHICH IN MY VIEW IS ELIG IBLE. PAGE 3 OF 5 ITA NO.2940/BANG/2018 6. AGGRIEVED BY ORDER OF LD.CIT(A) REVENUE IS IN AP PEAL BEFORE US NOW. 7. LD.SR.DR SUBMITTED THAT LD.CIT(A) WITHOUT VERIFY ING THE CLAIM IN LIGHT OF VARIOUS DECISIONS OF THIS TRIBUNAL AS WELL AS HONBLE KARNATAKA HIGH COURT GRANTED DEDUCTION TO ASSESSEE. HE SUBMITTED THAT THE ISSUE MAY BE REMANDED TO LD.AO F OR CONSIDERING THE CLAIM IN ACCORDANCE WITH THE VIEW T AKEN BY THIS TRIBUNAL ON THIS ISSUE. 8. LD.AR ON THE CONTRARY RELIED ON ORDER PASSED BY LD.CIT(A). WE HAVE PERUSED THE SUBMISSIONS OF BOTH SIDES IN LI GHT OF RECORDS PLACED BEFORE US. 9. ADMITTEDLY, ASSESSEE IS ELIGIBLE FOR DEDUCTION U /S.80 P(2) (D) OF THE ACT. HOWEVER THE QUANTUM THAT IS ALLOWABLE I S TO BE COMPUTED IN ACCORDANCE WITH THE RATIO LAID DOWN BY FOLLOWING DECISIONS. WE THEREFORE REMAND THIS ISSUE TO LD.AO FOR COMPUTING THE DEDUCTION AS DIRECTED HEREIN. 10. LD.AO IS DIRECTED TO EXAMINE THE FACTS IN THE L IGHT OF DECISION OF HONBLE KARNATAKA HIGH COURT IN CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT CO-OPERATIVE LTD VS ITO , REPORTED IN 230 TAXMANN 309 , WHEREIN DECISION BY HONBLE SUPREME COURT IN CASE OF TOTGARS CO-COOPERATIVE SALE SOCIETY LTD., REPORTED IN 322 ITR 283 HAS BEEN DULY CONSIDERED. WE NOTE THAT HONBLE KARNATAKA HIGH COURT IN CASE OF PR.CIT VS TOTGARS CO-OPERATIVE SALE SOCIETY REPORTED IN 392 ITR 74 CONFIRMED THE ORDER OF THIS TRIBUNAL ALLOWING DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT ON PAGE 4 OF 5 ITA NO.2940/BANG/2018 INTEREST RECEIVED ON INVESTMENTS MADE IN CO-OPERATI VE BANK. THIS DECISION WAS HOWEVER NOT FOLLOWED IN THE SUBSEQUENT JUDGMENT IN CASE OF PR.CIT VS TOTGARS CO-OPERATIVE SALE SOCIETY REPORTED IN 395 ITR 611. 11. WE THEREFORE RESTORE THE ISSUE BACK TO LD.AO FOR FRESH CONSIDERATION IN THE LIGHT OF ABOVE DECISIONS AFTER PROVIDING ORDER QUIT OPPORTUNITY OF BEING HEARD TO ASSESSEE IN ACCO RDANCE WITH LAW. ACCORDINGLY GROUNDS RAISED BY ASSESSEE STANDS ALLOW ED FOR STATISTICAL PURPOSES. IN THE RESULT APPEAL FILED BY ASSESSEE IS ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11 TH DEC, 2020 SD/- SD/- (CHANDRA POOJARI) (BEENA PILLAI) ACCOUNTANT MEMBER JUDICIAL ME MBER BANGALORE, DATED, THE 11 TH DEC, 2020. /VMS/ COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE PAGE 5 OF 5 ITA NO.2940/BANG/2018 DATE INITIAL 1. DRAFT DICTATED ON ON DRAGON SR.PS 2. DRAFT PLACED BEFORE AUTHOR -11-2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER -11-2020 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. -11-2020 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS -11-2020 SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON -11-2020 SR.PS 7. DATE OF UPLOADING THE ORDER ON WEBSITE -11-2020 SR.PS 8. IF NOT UPLOADED, FURNISH THE REASON -- SR.PS 9. FILE SENT TO THE BENCH CLERK -11-2020 SR.PS 10. DATE ON WHICH FILE GOES TO THE AR 11. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 12. DATE OF DISPATCH OF ORDER. 13. DRAFT DICTATION SHEETS ARE ATTACHED NO SR.PS