The Karamsad Nagrik Co. Op. Credit Society Ltd., Anand V. The Income Tax Officer, Ward-2, Anand

ITA 2985/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8312 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 15-11-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRASSON KABRA
• Assessee Lawyers: BHARGAV THAKKAR

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO. 2985/AHD/2016 / ASSESSMENT YEAR: 2012-13 THE KARAMSAD NAGRIK CO-OP. CREDIT SOCIETY LTD. SHREE VITHAL SEVA SAMAJ BUILDING NR. BUS STAND KARAMSAD 388 325 PAN : AAAAT 4728 K. VS ITO, WARD-2 ANAND. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI BHARGAV THAKKAR, AR REVENUE BY : SHRI PRASSON KABRA, SR.DR / DATE OF HEARING : 23/05/2018 /DATE OF PRONOUNCEMENT : 23/05/2018 O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER : PRESENT APPEAL IS DIRECTED AT THE INSTANCE OF THE ASSESSEE AGAINST OR DER OF LD.CIT(A)-4, BARODA DATED 27.6.2016 PASSED FOR THE ASSTT.YEAR 20 12-13. THE ASSESSEE IS AGGRIEVED BY THE ACTION OF THE REVENUE AUTHORITI ES IN DENYING THE BENEFIT UNDER SECTION 80(2)(A)(I) OF THE INCOME TAX ACT, 1961 IN RESPECT OF INTEREST INCOME EARNED FROM BANK DEPOSITS. 2. SHRI DHIREN SHAH, LEARNED COUNSEL FOR THE ASSESS EE FILED A LETTER DATED 21.5.2018 SEEKING ADJOURNMENT OF THE CASE. R EQUEST FOR ADJOURNMENT IS REJECTED. FURTHER, IT HAS BEEN POIN TED OUT BY THE REGISTRY THAT APPEAL OF THE ASSESSEE IS TIME BARRED BY ONE D AY. THOUGH NO REASON ITA NO.2985/AHD/2016 - 2 - HAS BEEN ADVANCED BY THE ASSESSEE FOR THE DELAY IN FILING APPEAL, DELAY OF ONE DAY BEING MINIMAL, WE ARE NOT INCLINED TO TREAT THE APPEAL INADMISSIBLE AT THE THRESHOLD. IT HAS BEEN POINTED BY THE LD.DR THAT THE ISSUE INVOLVED IN THIS APPEAL IS OTHERWISE ALSO COV ERED IN FAVOUR OF THE REVENUE BY THE DECISION OF HONBLE JURISDICTIONAL H IGH COURT IN THE CASE OF STATE BANK OF INDIA VS. CIT, 389 ITR 578 FOR THE PROPOSITION THAT IN CASE OF CO-OP CREDIT SOCIETY, WHOSE ACTIVITY RELATE S TO RECEIVING DEPOSITS AND LENDING MONEY TO ITS MEMBERS, INTEREST DERIVED BY DEPOSITING SURPLUS FUNDS WITH THE NATIONALIZED BANKS, NOT BEIN G ATTRIBUTABLE TO THE BUSINESS CARRIED ON BY THE ASSESSEE, CANNOT BE DEDU CTED UNDER SECTION 80P(2)(A)(I) OF THE ACT. 3. HAVING HEARD LD. DR AND GONE THROUGH THE RECORD, WE FIND THAT ASSESSEE IS A COOPERATIVE SOCIETY ENGAGED IN PROVID ING CREDIT FACILITIES TO ITS MEMBERS. THE ASSESSEE HAS FILED ITS RETURN OF I NCOME ON 28.9.2012 DECLARING TOTAL INCOME AT RS.NIL BY CLAIMING ENTIRE NET INCOME DEDUCTIBLE UNDER SECTION 80P(2)(A) OF THE INCOME TA X ACT. THIS CLAIM WAS DENIED BY THE AO ON THE GROUND THAT ASSESSEE BE ING A COOPERATIVE CREDIT SOCIETY ENGAGED IN PROVIDING CREDIT FACILITI ES TO ITS MEMBERS DEPOSITS ITS SURPLUS FUND IN FDRS/SB ACCOUNTS WITH NATIONALIZED BANK AND EARN INTEREST OUT OF SUCH DEPOSITS, THEN SUCH I NTEREST INCOME WOULD NOT QUALIFY FOR DEDUCTION UNDER THE RELEVANT PROVIS IONS APPENDED TO SECTION 80P OF THE ACT. THE AO ACCORDINGLY REJECTED THE CLAIM OF THE ASSESSEE. THE LD.CIT(A) UPHELD THE ORDER OF THE AO BY TAKING SUPPORT FROM THE DECISION OF THE HONBLE JURISDICTIONAL HIG H COURT IN THE CASE OF CIT VS. STATE BANK OF INDIA (SUPRA). WE FIND THAT HONBLE JURISDICTIONAL HIGH COURT HAS HELD THAT INTEREST EARNED FROM INVES TMENT MADE IN NATIONALIZED BANK BY A COOPERATIVE SOCIETY ENGAGED IN PROVIDING CREDIT ITA NO.2985/AHD/2016 - 3 - FACILITIES TO ITS MEMBERS, IS NOT DEDUCTIBLE UNDER SECTION 80P(2)(D). IN RECENT PAST THE TRIBUNAL IN SLEW OF DECISIONS HAS T AKEN A CONSISTENT VIEW ON THIS ISSUE BY FOLLOWING ABOVE JUDGMENT OF THE HO NBLE JURISDICTIONAL HIGH COURT. IN THIS VIEW OF THE MATTER, WE DO NOT I NCLINE TO DISTURB THE ORDERS OF THE REVENUE AUTHORITIES ON THIS ISSUE, WH ICH WE UPHOLD. HOWEVER, ANY EXPENDITURE INCURRED BY THE ASSESSEE F OR EARNING SUCH INCOME COULD BE ALLOWED TO IT. IN OTHER WORDS, THE LD.AO HAS TO DETERMINE THE NET INTEREST INCOME EARNED BY THE ASS ESSEE ON SUCH INVESTMENT WITH BANK, AND ONLY THEREAFTER THAT INCO ME HAS TO BE EXCLUDED FROM THE ADMISSIBILITY OF DEDUCTION UNDER SECTION 80P(2) OF THE ACT. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. PRONOUNCED IN THE OPEN COURT ON 23 RD MAY, 2018. SD/- SD/- (WASEEM AHMED) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER