The Urban Co-Operative Bank Ltd., Cuttack V. ACIT, Cuttack

ITA 302/CTK/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0767 (ITAT-CUTTACK)
• Duration Of Justice: 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2004-2005
• Appeal Filed On: 06-08-2010
• Court: TRIBUNAL
• Department Lawyers: P C MOHANTY
• Assessee Lawyers: A K PANDA

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK ( ) BEFORE . . , , HONBLE SHRI K.K.GUPTA, ACCOUNTANT MEMBER. /AND . . . , S HRI K.S.S.PRASAD RAO , JUDICIAL MEMBER / I.T.A.NO. 302/CTK/2010 / ASSESSMENT YEAR 2004 - 05 THE URBAN CO - OPERATIVE BANK LTD., TINIKONIA BAGICHA, CUTTACK. AAAAT 0860 E - - - VERSUS - ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 2(2 ), CUTTACK. ( /APPELLANT ) ( / RESPONDENT ) / FOR THE APPELLANT : / SHRI A.K.PANDA, AR / FOR THE RESPONDENT: / SHRI P.C.MOHANTY, DR / ORDER . . , , SHRI K.K.GUPTA, A CCOUNTANT MEMBER. THIS APPEAL BY THE ASSESSEE INDICATES A MISTAKE PERPETUATED BY THE LEARNED CIT(A) INSPITE OF HOLDING THAT THE INCOME OF INTEREST ON THE FIXED DEPOSITS BY THE ASSESSEE BANK ARE PART AND PARCEL OF THE ASSESSEES BUSINESS OF BANKING WHICH E NTITLES IT DEDUCTION U/S.80P(2) OF THE INCOME - TAX ACT,1961. 2. THE LEARNED COUNSEL FOR THE ASSESSEE INITIATING HIS ARGUMENT STATED THAT THE LEARNED CIT(A) ON AN EARLIER OCCASION HAD ACCEPTED THE CASE OF THE ASSESSEE APPELLANT BEFORE HIM THAT THE ONLY INC OME SOUGHT TO BE TAXED BY THE ASSESSING OFFICER U/S.143(3) WAS THE INCOME EARNED BY THE ASSESSEE ON FIXED DEPOSITS IN VARIOUS BANKS WAS PART AND PARCEL OF THE VERY INCOME WHICH WAS THE SUBJECT MATTER OF APPEAL INCLUDED IN THE TOTAL INCOME OF THE ASSESSEE OF 5,48,51,470.THE ASSESSING OFFICER GIVING APPEAL EFFECT SOUGHT TO SEGREGATE THE SAID AMOUNT BY ADDING THE SAME TO THE TOTAL INCOME AS PER ORDER GIVING EFFECT TO THE ORDER OF THE LEARNED CIT(A) DT.15.1.2008. THE I.T.A.NO. 302/CTK/2010 2 LEARNED CIT(A) THEREAFTER PROCEEDED TO CONSI DER THE CASE OF THE ASSESSEE APPELLANT UNDER THE PROVISIONS OF SECTION 143(3)/254 WHEN HE HELD THAT THE ORDER OF THE LEARNED CIT(A) DT.15.1.2008 HAD MERGED WITH THE ORDER OF THE ITAT WHICH ORDER HAS BEEN PLACED ON RECORD BEING ITA NO.28/CTK/2008 FOR ASSESS MENT YEAR 2004 - 05 DT.2.9.2008 WAS TO HIGHLIGHT THAT THE VERY INCOME WHICH HAS BEEN SEPARATELY TREATED AS INCOME BY THE ASSESSING OFFICER WAS NOT RELATING TO THE ASSESSEES BANKING BUSINESS STANDS CLARIFIED. 3. THE LEARNED COUNSEL FOR THE ASSESSEE ARGUED T HAT THE LEARNED CIT(A) APPEARS TO HAVE TURNED A BLIND EYE TO THE FACT THAT THE TRIBUNAL ORDER HAD SPECIFICALLY CONSIDERED THAT THE SAID INCOME CANNOT BE TAXED SEPARATELY WAS PART AND PARCEL OF THE VERY INCOME WHICH HE HAD IN HIS EARLIER DECISION DT.15.1.20 08 SOUGHT TO DELETE FROM TAXATION WAS GIVEN APPEAL EFFECT TO BY THE ASSESSING OFFICER BY BRINGING TO TAX SEPARATELY THE SAID INCOME WHICH WAS ERRONEOUSLY CONSIDERED BY THE ASSESSING OFFICER AS NOT INCLUDED IN THE TOTAL INCOME AMOUNTING TO 4,87,12,141. HE PRAYED THAT THE MERGER THEORY OF THE LEARNED CIT(A) HAD NO LEGS TO STAND ON WHEN THE VERY BODY OF THE MERGER HAS BEEN LOST SIGHT OF. HE PRAYED THAT A SUITABLE DIRECTION MAY KINDLY BE GIVEN TO THE LEARNED CIT(A) FOR RECTIFYING THE FACTUAL M ISTAKE COMMITTED BY HIM WHEN THE AMOUNTS HAVE BEEN CATEGORICALLY SEGREGATED IN HIS ORDER WITHOUT CONSIDERATION OF HOLDING HIS PREDECESSOR CIT(A)S ORDER AND ITATS ORDER ON MERGER THEORY. 4. THE LEARNED DR SUBMITTED THAT HE HAD NO OBJECTION FOR BRINGING O UT CLARITY IN DECIPHERING THE MERGER THEORY VIS - - VIS THE AMOUNT SEGREGATED BY THE ASSESSING OFFICER FOR TAXATION BEING INTEREST ON FIXED DEPOSITS AS PER THE ITATS ORDER TO BE DELETED. I.T.A.NO. 302/CTK/2010 3 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAIL ABLE ON RECORD. ON OUR CAREFUL CONSIDERATION OF THE FACTS AND CIRCUMSTANCE, WE ARE INCLINED TO HOLD THAT THE LEARNED CIT(A) APPEARS TO HAVE LOST SIGHT THE FACTUAL POSITION AS HAS BEEN ENUMERATED BY THE ASSESSING OFFICER VIS - - VIS THE ITAT ORDER WHEN THE IN COME BEING INTEREST ON FIXED DEPOSITS HELD BY THE ASSESSEE IN VARIOUS BANKS WAS GOVERNED BY THE RBI REGULATIONS CANNOT BE SEPARATED FOR THE PURPOSE OF TAXING THE SAME AS UNAPPROVED INVESTMENTS. THE INTEREST EARNED FROM SUCH DEPOSITS IS ON THE BASIS OF REGULAR BANKING BUSINESS OF THE ASSESSEE BANK AND COULD NOT BE CONSIDERED AS UNAPPROVED INVESTMENTS BEING GOVERNED BY RE GULATIONS OF RBI. THE LEARNED CIT(A) HAS NOT CONSIDERED THE SAME IN ACCORDANCE WITH THE PROVISIONS OF THE CASE LAWS CITED THER EFORE IS RESTORED TO HIS FILE FOR CONSIDERATION AFRESH AS PRAYED FOR BY THE LEARNED COUNSEL BEFORE US, IN ORDER TO VERIFY THE VERACITY OF THE CLAIM OF THE ASSESSEE IN ACCORDANCE WITH LAW. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS CONSIDERED AS ALL OWED FOR STATISTICAL PURPOSES. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DT. 25 TH FEBRUARY, 2011 SD/ - SD/ - ( . . . ) , ( K.S.S.PRASAD RAO), JUDICIAL MEMBER ( . . ) , , (K.K.GUPTA ), ACCOUNTANT MEMBER. ( ) DATE: 25 TH FEBRUARY, 2011 ( ), ( H.K.PADHEE ), SENIOR.PRIVATE SECRETARY. I.T.A.NO. 302/CTK/2010 4 - COPY OF THE ORDER FORWARDED TO: 1 . / THE APPELLANT : THE URBA N CO - OPERATIVE BANK LTD., TINIKONIA BAGICHA, CUTTACK 2 / THE RESPONDENT: ASST.COMMISSIONER OF INCOME - TAX, CIRCLE 2(2), CUTTACK. 3 . / THE CIT, 4 . ( )/ THE CIT(A), 5 . / DR, CUTTACK BENCH 6 . GUARD FILE . / TRUE COPY, / BY ORDER, [ ] SENIOR PRIVATE SECRETARY