The Sardar Co. Op. Society Ltd., Mahisagar V. The Income Tax Officer, Lunawada, Vadodara

ITA 2969/AHD/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 6069 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 15-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VILAS SHINDE
• Keywords: Opportunity of being heard

Judgement Text

, ,L ,L,L ,L- -- -,E ,E,E ,E- -- -LH LHLH LH IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD LOZJH EGKOHJ IZLKN] U;KF;D LNL; ,OA VEJTHR FLAG] LOZJH EGKOHJ IZLKN] U;KF;D LNL; ,OA VEJTHR FLAG] LOZJH EGKOHJ IZLKN] U;KF;D LNL; ,OA VEJTHR FLAG] LOZJH EGKOHJ IZLKN] U;KF;D LNL; ,OA VEJTHR FLAG] YS [KK LNL; DS LE{KA YS[KK LNL; DS LE{KA YS[KK LNL; DS LE{KA YS[KK LNL; DS LE{KA (BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER & SHRI AMARJIT SINGH, ACCOUNTANT MEMBER ) ITA NO.2969/AHD/2016) (ASSESSMENT YEAR :2012-13) THE SARDAR CO.OP CREDIT SOCIETY LTD., BORIYAWAL SHOPPING CENTRE, AT & POST LUNAWDA, DIST. MAHISAGAR. / VS. INCOME TAX OFFICER, LUNAWADA. ./ ./ PAN/GIR NO. : AABAS 5732 K ( / APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI BANDISH SOPARK, AR / RESPONDENT BY : SHRI VILAS SHINDE, SR. DR / DATE OF HEARING 23/02/2018 !'# / DATE OF PRONOUNCEMENT 23/02/2018 $% / O R D E R PER MAHAVIR PRASAD, JUDICIAL MEMBER : THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPEALS)-4, VADODARA, VI DE APPEAL NO.CAB/4-114/2015-16 DATED 20/06/2016 FOR THE ASSES SMENT YEAR (AY) 2012-13. 2. ASSESSEE HAS TAKEN FOLLOWING GROUNDS OF APPEALS: 1. LD. CIT (A) ERRED IN LAW AND ON FACTS IN CONFIR MING DISALLOWANCE MADE BY AO OF RS.30,18,636/- DEDUCTION CLAIMED U/S 80P(2)(A)(I) OF THE ACT. LD. CIT (A) OUGHT TO HAVE ALLOWED DEDUC TION CLAIMED OF INTEREST RECEIVED FROM NATIONALIZED HANKS ON THE OPERATIONAL FUNDS BY THE APPELLANT. ITA NO.296 9/AHD/2016 THE SARDAR CO-OP CREDIT SOCIETY LTD. A.Y. 2012-13 - 2 - 2. LD.CIT(A) ERRED IN LAW AND ON THE FACTS CONFI RMING DISALLOWANCE BY AO TREATING INTEREST EARNED AS INCOME FROM OTHER SOURCES. LD.CIT (A) OUGHT TO HAVE HELD INTEREST EARNED AS PR OFITS & GAINS OF BUSINESS. 3. LD.CIT(A) ERRED IN LAW AND ON FACTS HOLDIN G THAT INTEREST DERIVED BY DEPOSITING SURPLUS FUNDS WITH NATIONALIZED BANKS IS NOT ATTRIBUTABLE TO THE BUSINESS CARRIED ON BY THE APPE LLANT CREDIT SOCIETY AND HENCE NOT DEDUCTIBLE U/S.80P(2)(A)(I)OF THE ACT. 4. LD.CIT (A) ERRED IN LAW AND ON FACTS IN NOT ADJUDICATING GROUND # 3 OF THE APPEAL CHALLENGING ACTION OF AO DISALLOW ING RS.2,26,492/- EXPENDITURE INCURRED BY THE APPELLANT FOR EARNING OF THE INCOME. 5. LD.CIT(A) ERRED IN LAW AND ON FACTS CONFIRMI NG DISALLOWANCE OF THE CLAIM OF DEDUCTION RELYING ON JUDGMENT RENDERED IN REVISIONARY PROCEEDINGS NOT APPLICABLE TO THE FACTS OF THE CASE. LD.CIT(A) OUGHT TO HAVE APPRECIATED RATIO OF THE JU DICIAL CITATIONS DIRECTLY ON THE ISSUE & ALLOWED DEDUCTION . 6. LEVY OF INTEREST U/S.234A/234B/234C & 234D OF THE ACT IS NOT JUSTIFIED. 7. INITIATION OF PENALTY U/S 271(L)(C) OF THE ACT IS NOT JUSTIFIED. 3. BRIEFLY STATED FACTS AS CULLED OUT FROM THE RECO RDS ARE THAT THE APPELLANT IS A CO-OPERATIVE CREDIT SOCIETY ENGAGED IN THE BUSINESS OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS AS PER T HE BY-LAWS OF THE SOCIETY AS APPROVED UNDER GOVERNMENT OF GUJARAT CO-OPERATIV E ACT. THE APPELLANT HAS FILED RETURN OF INCOME FOR THE AY 201 2-13 ON 18/08/2012 DECLARING TOTAL INCOME AT RS. NIL AFTER CLAIMING DE DUCTION U/S.80P(2) OF THE ACT OF RS.15,26,216/- AND THE ASSESSMENT ORDER U/S.143(3) OF THE I.T. ACT WAS FINALIZED ON 16/03/2015 AND DETERMINING TOT AL INCOME OF RS.14,76,220/-. MAKING DISALLOWING RS.30,18,636/- C LAIMED BY THE APPELLANT U/S.80(P)(2)(A)(I) OF THE I.T. ACT. 4. THEREAFTER, APPELLANT PREFERRED AN APPEAL AGAINS T THE SAID DISALLOWANCE AND LD. CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE. 5. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMP UGNED ORDER. LD. AR CITED AN ORDER OF OUR CO-ORDINATE BENCH IN I TA ITA NO.296 9/AHD/2016 THE SARDAR CO-OP CREDIT SOCIETY LTD. A.Y. 2012-13 - 3 - NO.2814/AHD/2016 FOR A.Y.2013-14 IN THE MATTER OF V ADODARA MAHANAGAR SEVA SADAN EMPLOYEES CO. OPERATIVE CREDIT SOCIETY LTD. VS. INCOME TAX OFFICER, IN WHICH, IT IS HELD AS UNDER: 4. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IM PUGNED ORDER. IN THIS CASE, INTEREST AMOUNT OF RS.1,20,422/-, RS. 39,209/- & RS. 471/- WAS RECEIVED FORM ALLAHABAD BANK, BANK OF BARODA AN D BARODA CENTER CO-OP. BANK RESPECTIVELY. FROM THE DETAILS, IT CAN BE SEEN THAT THE RECEIPTS OF INTEREST OF RS.1,20,422/- & RS.39,209/- (TOTALING TO RS. 1,59,671/-) HAS BEEN RECEIVED FROM OTHER THAN CO-OP ERATIVE ORGANIZATION I.E. FROM NATIONALIZED BANKS ON FDRS, WHICH IS NOTHING BUT INTEREST EARNED ON SURPLUS FUNDS INVESTED IN BANK D EPOSITS I.E. FDRS. 5. LD. AR FILED AN ORDER OF CO-ORDINATE BENCH IN IT A NO.2426/AHD/2013 FOR A.Y.2009-10 DATED 24/01/2017 W HEREIN, SIMILAR ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE AND IT WAS HELD AS BELOW: (3) ASSESSEE WILL ALSO BE ELIGIBLE TO CLAIM PRO RA TA EXPENSES FOR EARNING INTEREST INCOME OF RS.8,55,854/- ASSESS EE'S CLAIM OF PRO RATA EXPENSES OF RS.5,77,423/- AGAINST THE INTE REST INCOME OF RS.8,55,854/- AFTER DUE VERIFICATION BY THE LEARNED ASSESSING OFFICER. WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO VERI FY ASSESSEE'S CLAIM OF PRO RATA EXPENSES BY EXAMINING THE RECORD TO BE SHOWN FOR VERIFICATION BY THE ASSESSEE. NEEDLESS TO MENTI ON PROPER OPPORTUNITY OF BEING HEARD IS TO BE GIVEN TO THE AS SESSEE. WE ORDER ACCORDINGLY. THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. 6. RESPECTFULLY FOLLOWING THE AFORESAID ORDER, WE D IRECT THE ASSESSING OFFICER TO VERIFY THE ASSESSEES CLAIMS O F PRO RATA EXPENSES BY EXAMINATION THE RECORD TO BE SHOWN FOR VERIFICATION BY THE ASSESSEE AND ACCORDINGLY, NETTING OF TO BE ALLOWED. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. 6. FOLLOWING THE OBSERVATION, WE DISPOSE OFF ABOVE SAID APPEAL. ACCORDINGLY, FOLLOWING THE PAST PRECEDENCE, WE DIRE CT THE ASSESSING OFFICER TO VERIFY THE ASSESSEES CLAIM OF PRO RATA EXPENSES BY EXAMINATION ITA NO.296 9/AHD/2016 THE SARDAR CO-OP CREDIT SOCIETY LTD. A.Y. 2012-13 - 4 - THE RECORD TO BE SHOWN FOR VERIFICATION BY THE ASSE SSEE AND ACCORDINGLY, NETTING OF TO BE ALLOWED BY THE LD. ASSESSING OFFIC ER. 7. IN THE RESULT, APPEAL FILED BY THE APPELLANT IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 23 / 0 2 /201 8 SD/- SD/- VEJTHR FLAG VEJTHR FLAG VEJTHR FLAG VEJTHR FLAG &' $ ( $ ) ()* $ ) ( AMARJIT SINGH ) ( MAHAVIR PR ASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 23/02/2018 PRITI YADAV, SR.PS ! ' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. , -. / / CONCERNED CIT 4. / () / THE CIT(A)-4, VADODARA. 5. 012 **-. , -.# , '&$,$ / DR, ITAT, AHMEDABAD 6. 245 6 / GUARD FILE. # $ / BY ORDER, 0 * //TRUE COPY// %/$ &' ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD