Deputy Commissioner of Income tax, Pune V. Jai Hind Co-operative Bank Ltd, Pune

ITA 300/PUN/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 8804 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 01-07-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 06-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N ASHOK BABU
• Keywords: Earning of tax free income; Rule 8D
• Section: 14A; 43D

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE , , , BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 300 /P U N/201 7 / ASSESSMENT YEAR : 20 12 - 13 DY. COMMISSIONER OF INCOME TAX, CIRCLE 9, PUNE ....... / APPELLANT / V/S. JAI HIND CO - OPERATIVE BANK LTD., CHAPEKAR CHOWK, PUNE 411033 PAN : AAAAJ0952H / RESPONDENT ASSESSEE BY : SHRI KISHOR PHADKE REVENUE BY : SHRI N. ASHOK BABU / DATE OF HEARING : 01 - 07 - 2019 / DATE OF PRONOUNCEMENT : 10 - 0 7 - 2019 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 13, PUNE DATED 23 - 11 - 2016 FOR THE ASSESSMENT YEAR 20 12 - 13. 2 ITA NO .300/PUN/2017, A.Y. 2012 - 13 2. THE REVENUE IN APPEAL HAS ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) BY RAISING FOUR GROUNDS ON TWO ISSUES. THE GROUND NOS. 1 TO 3 OF THE APPEAL ARE ON THE ISSUE OF INTEREST ON STICKY LOANS. THE SECOND ISSUE RAISED IN GROUND NO. 4 IS QUA DISALLOWANCE U/S. 14A R.W. RULE 8D. 3. SHRI KISHOR PHADKE APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED OUT THE OUTSET THAT THE FIRST ISSUE RELATIN G TO INTEREST ON STICKY LOANS RAISED IN GROUND NOS. 1 TO 3 OF THE APPEAL BY THE REVENUE IS COVERED BY THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. DEOGIRI NAGARI SAHAKARI BANK LTD. REPORTED AS 379 ITR 24 AND IN TH E DECISION OF PRINCIPAL COMMISSIONER OF INCOME TAX VS. SOLAPUR DISTRICT CENTRAL CO - OP. BANK LTD. REPORTED AS 261 TAXMAN 476 (BOM). THE LD. AR SUBMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS DECIDED THIS ISSUE IN FAVOUR OF ASSESSEE BY FOLLOWING VARIOUS DECISIONS OF HONBLE BOMBAY HIGH COURT INCLUDING THE DECISION RENDERED IN THE CASE OF COMMISSIONER OF INCOME TAX VS. DEOGIRI NAGARI SAHAKARI BANK LTD. (SUPRA). 3.1 IN RESPECT OF GROUND NO. 4 OF THE APPEAL THE LD. AR SUBMITTED THAT THE ASSESSING O FFICER HAD MADE DISALLOWANCE OF RS.3,32,385/ - U/S. 14A R.W. RULE 8D. THE ASSESSING OFFICER MADE DISALLOWANCE WITHOUT APPRECIATING THE FACTS THAT THE ASSESSEE HAD NOT EARNED ANY EXEMPT INCOME DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR 2012 - 13. THE COMMISSIONER OF INCOME TAX (APPEALS) DELETED THE DISALLOWANCE AFTER CONSIDERING THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LIMITED VS. COMMISSIONER OF INCOME TAX REPORTED AS 378 ITR 3 ITA NO .300/PUN/2017, A.Y. 2012 - 13 33. THE LD. AR SUBMITTED THAT IT IS A WELL SETTLE D LAW THAT WHERE THE ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME, NO DISALLOWANCE U/S. 14A IS TO BE MADE. 4. ON THE OTHER HAND SHRI N. ASHOK BABU REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE ACTION OF ASSESSING OFFICER IN MAKING THE IMPUGNED ADDITI ONS/DISALLOWANCES. THE LD. DR PRAYED FOR REVERSING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS). 5. BOTH SIDES HEARD. ORDERS OF THE AUTHORITIES BELOW PERUSED. THE ISSUE RAISED IN THE APPEAL BY THE REVENUE AGAINST DELETING OF INTEREST OF ST I CK Y LOANS HAS BEEN LAID TO REST BY HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. DEOGIRI NAGARI SAHAKARI BANK LTD. (SUPRA) . THE HONBLE HIGH COURT HELD THAT CO - OPERATIVE BANKS ARE ELIGIBLE FOR DEDUCTION U/S. 43D IN RESPECT OF INTEREST ON STICKY ADVANCES/ NON PERFORMING ASSETS. THE AFORESAID LAW HAS BEEN REITERATED BY THE HONBLE HIGH COURT IN THE CASE OF PRINCIPAL COMMISSIONER OF INCOME TAX VS. SOLAPUR DISTRICT CENTRAL CO - OP. BANK LTD. (SUPRA). THUS, IN VIEW OF LAW LAID DOW N BY THE HONBLE JURISDICTIONAL HIGH COURT , GROUND NOS. 1 TO 3 OF THE APPEAL BY THE DEPARTMENT ARE DISMISSED. 6. IN GROUND NO. 4 OF THE APPEAL , THE REVENUE HAS ASSAILED DELETING OF DISALLOWANCE MADE U/S. 14A R.W. RULE 8D. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE HAS NOT EARNED ANY EXEMPT INCOME IN THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL. THE HONBLE DELHI HIGH COURT IN THE CASE OF CHEMINVEST LIMITED VS. COMMISSIONER OF INCOME TAX (SUPRA) HAS HELD THAT NO DISALLOWANCE U/S. 14A IS TO BE MADE IN THE ABSENCE OF ANY 4 ITA NO .300/PUN/2017, A.Y. 2012 - 13 EXEMPT INCOME. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS DECIDED THE ISSUE IN LINE WITH THE JUDGMENT OF HONBLE HIGH COURT. WE FIND NO REASON TO INTERFERE WITH THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) ON THIS IS SUE. ACCORDINGLY, THE GROUND NO. 4 OF THE APPEAL IS DISMISSED BEING DEVOID OF ANY MERIT. 7. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 10 TH DAY OF JU LY , 2019. SD/ - SD/ - ( / ANIL CHATURVEDI ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 10 TH JU LY , 2019 . RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 13, PUNE 4. THE PR. COMMISSIONER OF INCOME TAX - 5, PUNE 5 . , , , / DR, ITAT, A BENCH, PUNE. 6 . / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE