District Cooperative Bank Ltd., Meerut V. ACIT, Najibabad

ITA 2984/DEL/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81546 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 07-08-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 14-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PARWINDER KAUR
• Assessee Lawyers: P S KASHYAP

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH B BB B : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND PRESIDENT AND PRESIDENT AND PRESIDENT AND SHRI SHRI SHRI SHRI CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG, JUDICIAL , JUDICIAL , JUDICIAL , JUDICIAL MEMBER MEMBER MEMBER MEMBER ITA NO ITA NO ITA NO ITA NOS SS S. .. .2984/DEL/2013 & 2985/DEL/2013 2984/DEL/2013 & 2985/DEL/2013 2984/DEL/2013 & 2985/DEL/2013 2984/DEL/2013 & 2985/DEL/2013 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEARS SS S : : : : 2009 2009 2009 2009- -- -10 & 2007 10 & 2007 10 & 2007 10 & 2007- -- -08 0808 08 M/S DISTRICT COOPERATIV M/S DISTRICT COOPERATIV M/S DISTRICT COOPERATIV M/S DISTRICT COOPERATIVE E E E BANK LIMITED, BANK LIMITED, BANK LIMITED, BANK LIMITED, CIVIL LINES CIVIL LINES CIVIL LINES CIVIL LINES- -- -II, II,II, II, BIJNOR. BIJNOR. BIJNOR. BIJNOR. PAN : AABFD2205R. PAN : AABFD2205R. PAN : AABFD2205R. PAN : AABFD2205R. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, NAJIBABAD. NAJIBABAD. NAJIBABAD. NAJIBABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI P.S. KASHYAP, CA. RESPONDENT BY : SMT. PARWINDER KAUR, SR.DR. ORDER ORDER ORDER ORDER PER G.D. PER G.D. PER G.D. PER G.D. AGRAWAL, VP AGRAWAL, VP AGRAWAL, VP AGRAWAL, VP : : : : THESE APPEALS BY THE ASSESSEE ARE DIRECTED AGAINST THE O RDER OF LEARNED CIT(A), BAREILLY DATED 1 ST MARCH, 2013 FOR THE AY 2009-10 & 2007-08. 2. THE ONLY GROUND RAISED IN BOTH THESE APPEALS BY THE ASSESSEE IS FOR SEEKING EXEMPTION OF DIVIDEND RECEIVED BY THE ASSE SSEE COOPERATIVE SOCIETY AMOUNTING TO ` 70,56,000/- FOR AY 2007-08 AND ` 3,06,200/- FOR AY 2009-10. 3. SINCE THE FACTS IN BOTH THE YEARS ARE ALMOST SIMILAR , WE SHALL DEAL HEREIN BELOW THE FACTS RELATING TO AY 2007-08. 4. FOR THE YEAR UNDER CONSIDERATION, THE ASSESSEE RECEIV ED THE DIVIDEND OF ` 70,56,200/- FROM THE FOLLOWING THREE COMPANIES:- ITA-2984 & 2985/D/2013 2 (I) ` 67,50,000/- U.P. COOP. BANK LTD. (II) ` 1,00,000/- KRIBHCO (III) ` 2,06,200/- INDIAN FERTILIZERS. 5. THE ASSESSEE CLAIMED THE SAME TO BE EXEMPT WHICH WAS D ENIED BY THE ASSESSING OFFICER AND LEARNED CIT(A). HENCE, TH IS APPEAL BY THE ASSESSEE. 6. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND P ERUSED RELEVANT MATERIAL PLACED BEFORE US. AT THE TIME OF HEARING BEFORE US, LEARNED COUNSEL FAIRLY CONCEDED THAT THE DIVIDEND IS NOT EXEMPT UNDER SECTION 10(34) READ WITH SECTION 115-O BECAUSE THE C OMPANIES FROM WHOM THE ASSESSEE RECEIVED THE DIVIDEND HAS NOT PAID DIV IDEND DISTRIBUTION TAX. HIS CLAIM IS THAT THE DIVIDEND REC EIVED BY THE ASSESSEE COMPANY IS EXEMPT ON ACCOUNT OF MUTUALITY BECAU SE THOSE COMPANIES WHICH PAID DIVIDEND TO THE ASSESSEE ARE ALSO EI THER COOPERATIVE BANKS OR THE COMPANIES WHICH ARE BASICALLY RENDERING SERVICES TO THE COOPERATIVE SOCIETIES. WE ARE UNABLE T O ACCEPT THE CONTENTION OF THE ASSESSEE. WHEN THE ASSESSEE CLAIMS ANY E XEMPTION ON THE GROUND OF MUTUALITY, THE BURDEN IS UPON THE A SSESSEE TO ESTABLISH SO. IN THIS CASE, THE LEARNED COUNSEL COULD N OT JUSTIFY HOW THE DIVIDEND RECEIVED BY THE ASSESSEE FROM THREE DIFFERENT COMPANIES IS COVERED UNDER THE CONCEPT OF MUTUALITY. THE ASSESSEE H AS RECEIVED THE DIVIDEND ON ACCOUNT OF ASSESSEES INVESTMENT IN THOSE COMPANIES. THE DIVIDEND IS NOT THE CONTRIBUTION TO THE ASSESSEE BY THOSE COMPANIES AND MOREOVER, THE ASSESSEE IS NOT RENDERING SER VICES TO THEM. IN VIEW OF THE ABOVE, WE HOLD THAT THE ASSESSEE S CONTENTION THAT DIVIDEND RECEIVED FROM THOSE COMPANIES IS EXEMPT ON ACCOUNT OF MUTUALITY IS UNTENABLE. THE SAME IS REJECTED. ITA-2984 & 2985/D/2013 3 7. THE FACTS ARE SIMILAR IN AY 2009-10 WITH THE ONLY DIFFERENCE IN THE QUANTUM OF DIVIDEND WHICH IS ` 3,06,200/- INSTEAD OF ` 70,56,000/- IN AY 2007-08. FOR THE DETAILED DISCUSSION IN PARAGRAPH 6 A BOVE, WE HOLD THAT THE DIVIDEND RECEIVED IN AY 2009-10 ALSO CANNOT BE SAID TO BE EXEMPT WITHIN THE CONCEPT OF MUTUALITY. ACCORDINGL Y, THE APPEALS OF THE ASSESSEE IN BOTH THE YEARS ARE DISMISSED. 8. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE DISMISSED. DECISION PRONOUNCED IN THE OPEN COURT ON 8 TH AUGUST, 2014. SD/- SD/- ( (( (CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG) )) ) (G.D. A (G.D. A (G.D. A (G.D. AGRAWAL GRAWAL GRAWAL GRAWAL) )) ) JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 08.08.2014 VK. COPY FORWARDED TO: - 1. APPELLANT : M/S DISTRICT COOPERATIVE BANK LIMI TED, M/S DISTRICT COOPERATIVE BANK LIMITED, M/S DISTRICT COOPERATIVE BANK LIMITED, M/S DISTRICT COOPERATIVE BANK LIMITED, CIVIL LINES CIVIL LINES CIVIL LINES CIVIL LINES- -- -II, BIJNOR. II, BIJNOR. II, BIJNOR. II, BIJNOR. 2. RESPONDENT : ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, NAJIBABAD. NAJIBABAD. NAJIBABAD. NAJIBABAD. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR