Shri.Kalidas C-op Credit Society Ltd , Badami V. Income Tax Officer Ward-1 , Bagalkot

ITA 305/BANG/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1081 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 02-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SIDDAPP A JI R N
• Assessee Lawyers: M THIRUMALESH
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 305 /BANG/2018 ASSESSMENT YEAR : 201 2 - 1 3 M/S. SHRI KALIDAS CO-OP. CREDIT SOCIETY LTD., TOTAR STREET, BADAMI, DIST: BAGALKOT PAN: AAHCS6401K VS. THE INCOME TAX OFFICER, WARD - 1, BAGALKOT. APPELLANT RESPONDENT APPELLANT BY : SHRI M. THIRUMALESH, ADVOCATE RESPONDENT BY : SHRI SIDDAPPAJI R.N, ADDL. CIT (DR) DATE OF HEARING : 06 .0 9 .2018 DATE OF PRONOUNCEMENT : 14 .0 9 .2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE ORDER OF LD. CIT(A), GULBARGA DATED 29.11.2017 FOR ASSESSMEN T YEAR 2012-13. 2. THE GROUNDS RAISED BY THE ASSESSEEARE AS UNDER. 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERR ED IN LAW AS WELL AS ON FACTS IN REJECTING THE CLAIM OF THE APPE LLANT IN RESPECT OF GRANT OF DEDUCTION U/S 80P(2)(A)(I) TO THE EXTENT O F RS.9,32,435.00 AS CLAIMED BY THE APPELLANT. THE APPELLANT PRAYS FOR G RANT OF THE DEDUCTION AS CLAIMED. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERR ED IN LAW AS WELL AS ON FACTS IN INTERPRETING THE MEMBERSHIP CLA USE OF THE APPELLANT SOCIETY AND THUS ERRED IN HOLDING THE APPELLANT SOC IETY AS A CO- OPERATIVE BANK IN TERMS OF SECTION 80P (4). 3. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERR ED IN LAW AS WELL AS ON FACTS IN MAKING A DISTINCTION BETWEEN A CO-OPERATIVE BANK AND CO-OPERATIVE SOCIETY. ITA NO.305/BANG/2018 PAGE 2 OF 4 4. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERR ED IN LAW AS WELL AS ON FACTS THAT THE ASSESSEE SOCIETY DO HAVE ONLY REGULAR MEMBERS AND THEY DO NOT HAVE SECOND CATEGORY OF MEM BERS (NOMINAL MEMBERS) AS REFERRED IN HON. SUPREME COURT JUDGEMEN T IN THE CASE OF THE CITIZEN CO-OPERATIVE SOCIETY LTD., HYDERABAD. 5. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ERR ED IN LAW AS WELL AS ON FACTS THAT THE FACTS OF THE ASSESSEE SOC IETY AND THE CITIZEN CO-OPERATIVE SOCIETY LTD., HYDERABAD ARE TOTALLY DI FFERENT. HERE IN THIS CASE ASSESSEE SOCIETY IS ONLY DEALS WITH THE R EGULAR MEMBERS. WHERE AS CITIZEN CO-OPERATIVE SOCIETY IS DEALING WI TH REGULAR & NON- MEMBERS. THEREFORE THE JUDGEMENT OF HON. SUPREME CO URT DOES NOT APPLY TO THE ASSESSEE SOCIETY. 6. EACH OF THE ABOVE GROUNDS IS WITHOUT PREJUDICE T O ONE ANOTHER AND THE APPELLANT CRAVES LEAVE TO ADD, DELETE, AMEND OR OTHERWISE MODIFY OR WITHDRAW ONE OR MORE OF THE ABOVE GROUNDS EITHER BEFORE OR AT THE TIME OF HEARING OF THIS APPEAL. 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THE ASSESSEES CLAIM FOR DEDUCTION U/S. 80P (2) IN RESPECT OF INTEREST INCOME SHOULD B E DECIDED IN FAVOUR OF THE ASSESSEE BECAUSE THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED I N THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO AS REPORTED IN 230 TAXMAN 309. AT THIS JUNCTURE, THE BENCH POINTED OU T THAT ON THIS ISSUE, THERE IS ONE MORE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT R ENDERED IN THE CASE OF PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOC IETY AS REPORTED IN 395 ITR 611 (KARN). THE BENCH POINTED OUT THAT IN BOTH THESE JUDGMENTS, THE ULTIMATE CONCLUSION IS DIFFERENT BECAUSE THE FACTS ARE DIFFERENT BUT THERE IS NO CONTRADICTION IN THESE TWO JUDGMENTS. THE BENCH PO INTED OUT THAT IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. V S. ITO (SUPRA), IT WAS FOUND THAT THE AMOUNT DEPOSITED IN BANK WAS OUT OF ASSESSEES OWN FUNDS AND NOT OUT OF ITS LIABILITY AND THEREFORE, THIS ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE BUT IN THE CASE OF PCIT AND ANOTHER VS. TO TAGARS CO-OPERATIVE SALE SOCIETY (SUPRA), IT WAS FOUND THAT THE AMOUNT DEPOS ITED IN BANK WAS OUT OF ASSESSEES LIABILITY AND NOT OUT OF ASSESSEES OWN FUNDS AND THEREFORE, THIS ISSUE WAS DECIDED AGAINST THE ASSESSEE. THE BENCH OBSERVED THAT THERE IS NO FINDING OF ANY OF THE AUTHORITIES BELOW ON THIS FAC TUAL ASPECT AND THEREFORE, IT IS PROPER TO RESTORE BACK THE MATTER TO THE FILE OF CI T (A) FOR FRESH DECISION AFTER ITA NO.305/BANG/2018 PAGE 3 OF 4 EXAMINING THE FACTS OF PRESENT CASE IN THE LIGHT OF THESE TWO JUDGMENTS OF HON'BLE KARNATAKA HIGH COURT. THE LD. AR OF ASSESS EE AGREED TO THIS PROPOSITION PUT FORWARD BY THE BENCH. THE LD. DR O F REVENUE SUBMITTED THAT ON THIS ASPECT, HE IS ALSO IN AGREEMENT WITH THE PROPO SITION PUT FORWARD BY THE BENCH BUT WHEN THE MATTER IS BEING RESTORED BACK TO THE FILE OF CIT(A), HE SHOULD BE DIRECTED TO EXAMINE THE APPLICABILITY OF THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF THE CITIZEN CO-OPERAT IVE SOCIETY LTD. VS. ACIT AS REPORTED IN 397 ITR 1 ALSO BECAUSE AS PER PARA 5 .4 OF THE ORDER OF CIT(A), IT IS NOTED BY CIT(A) THAT THE AO HAD GIVEN A DETAILED ORDER AND ALSO MENTIONED THAT ANY PERSON ABOUT 18 YRS OF AGE LIVING PERMANEN TLY WITHIN THE AREA OF OPERATION, CAN BECOME A MEMBER BY PAYING SHARE FEE OF RS. 100/.HE SUBMITTED THAT THEREFORE, IT HAS TO BE SEEN AS TO WHETHER THE FULL AMOUNT OR PART AMOUNT OF INTEREST INCOME FOR WHICH DEDUCTION IS CLAIMED U/S 80P IS EARNED BY THE ASSESSEE FROM THE NOMINAL MEMBERS OR NOT IN THE PRE SENT YEAR AND THEREFORE, THE ISSUE REGARDING THE APPLICABILITY OF THIS JUDGM ENT OF HONBLE APEX COURT RENDERED IN THE CASE OF THE CITIZEN CO-OPERATIVE SO CIETY LTD. VS. ACIT (SUPRA) SHOULD ALSO BE EXAMINED BY CIT (A). IN THE REJOIND ER, THE LD. AR OF ASSESSEE ALSO AGREED THAT THE CIT (A) MAY BE DIRECTED TO EXA MINE THE FACTS OF PRESENT CASE IN THE LIGHT OF THIS JUDGMENT OF HONBLE APEX COURT ALSO. 4. IN VIEW OF THE ABOVE DISCUSSION, WE SET ASIDE TH E ORDER OF CIT(A) AND RESTORE THE MATTER BACK TO THE FILE OF CIT(A) FOR FRESH DEC ISION AFTER EXAMINING THE FACTS OF PRESENT CASE FIRST IN THE LIGHT OF JUDGMENT OF H ONBLE APEX COURT RENDERED IN THE CASE OF THE CITIZEN CO-OPERATIVE SOCIETY LTD. V S. ACIT (SUPRA) AND THEN ALSO EXAMINE THE FACTS OF PRESENT CASE IN THE LIGHT OF THESE TWO JUDGMENTS OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE O F TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO (SUPRA) AN D PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY (SUPRA). THEREA FTER THE CIT (A) SHOULD PASS NECESSARY ORDER AS PER LAW AFTER PROVIDING ADE QUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. ITA NO.305/BANG/2018 PAGE 4 OF 4 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DA TE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (N.V. VASUDEVAN) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 14 TH SEPTEMBER, 2018. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.