Anklav Mercantile Co.-Op. Credit Society Ltd., Anand V. The Income Tax Officer, Ward-1(3)(1), Anand

ITA 3128/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8351 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-05-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 29-11-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH BEFORE: SHR I RAJPAL YADAV , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER M/S. THE ANKLAV MERCANTILE CO - OP. CREDIT SOCIETY LTD., SHOPPING CENTER, NEAR BUS STAND, P.O. ANKLAV, DIST. ANAND PAN AAAAT2888A (APPELLANT) VS ITO, WARD - 1(3)(1), PETLAD (RESPONDENT) REVENUE B Y : S H RI DINESH SINGH , SR. D . R. ASSESSEE BY: S H RI B.T. THAKKAR , A.R. DATE OF HEARING : 26 - 04 - 2 018 DATE OF PRONOUNCEMENT : 16 - 05 - 2 018 / ORDER P ER : AMA RJIT SINGH, ACCOUNTANT MEMBER : - THIS ASSESSEE S APPEAL FOR A.Y. 2012 - 13 , ARIS ES FROM ORDER OF THE CIT(A) - 5, VADODARA DATED 16 - 08 - 2016 , IN PROCEEDINGS UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS RAISED FOL LOWING GROUNDS OF APPEAL: - 1. THE LEARNED CIT(A) - 5,VADODARA HAS ERRED IN LAW AND ON FACTS IN NOT ALLOWING THE CLAIM OF DEDUCTION U/S 80P(2)(A)(I) OF THE ACT ON BANK INTEREST INCOME TREATING THE SAME AS INCOME FROM OTHER SOURCE. 2. THE LEARNED CIT(A),VADOD ARA HAS ERRED IN LAW AND ON FACTS IN TREATING NET BANK INTEREST INCOME OF RS.983327/ - AS INCOME FROM OTHER SOURCES, WHICH IN FACT IS INCOME FROM BUSINESS. 3. THE LEARNED CIT(A) HAS ERRED IN LAW AND ON FACT IN TREATING INTEREST FROM CO - OPERATIVE BANKS AS IN COME FROM OTHER SOURCES. I T A NO . 31 28 / A HD/20 16 A SSESSMENT YEAR 2012 - 13 I.T.A NO. 3128 /AHD/20 16 A.Y. 2012 - 13 PAGE NO THE ANKLAV MERCANTILE CO - OP. CREDIT SOCIETY LTD. VS. ITO 2 4. AS A CONSEQUENCE OF GROUND NO.3 LEARNED CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING DEDUCTION U/S 80P(2)(D). 5. IF GROUND NO. 1 OF APPELLANT IS ALLOWED, ITO MAY PLEASE BE DIRECTED TO DELETE DEDUCTION OF RS.50000/ - ALLOWED U/S80P(C)(II). 3. ALL THE GROUNDS OF APPEAL OF THE ASSESSEE ARE INTERCONNECTED , THEREFORE , THE SAME ARE ADJUDICATED TOGETHER AS BELOW. THE ASSESSE E HAS REQUESTED FOR CONDONING ONE DAY DELAY IN FILING THIS APPEAL BECAUSE THE COURIER HAS DELIVER E D THE A PPELLATE ORDER IN THE OFFICE OF THE AUTHORIZED REPRESENTATIVE ON 29/11/2016 ON ACCOUNT OF 26/11/2006 AND 27/11/2016 BEING SATURDAY AND SUNDAY. AFTER CONSIDERING THE ABOVE FACTS , THE DELAY OF ONE DAY IN FILING THE APPEAL IS CONDONED. 4 . THE BRIEF FACT OF T HE CASE IS THAT THE RETURN OF INCOME DECLARING INCOME OF RS. 18200/ - WAS FILED ON 22 ND AUGUST, 2012. SUBSEQUENTLY, THE CASE WAS SELECTED UNDER SCRUTINY BY ISSUING OF NOTICE U/S. 143(2) OF THE ACT ON 8 TH AUGUST, 2013. DURING THE COURSE OF ASSESSMENT PROCEE DINGS, THE ASSESSING OFFICER NOTICED THAT ASSESSEE HAS CLAIMED DEDUCTION U/S. 80P OF THE ACT TO THE AMOUNT OF RS. 28 , 82 , 987/ - . ON VERIFICATION , THE ASSESSING OFFICER NOTICED THAT ASSSESSEE HAS SHOWN GROSS RECEIPT OF RS. 82 , 71 , 228/ - WHICH INCLUDE S INTERE ST INCOME OF RS. 29 , 80 , 611/ - EARNED ON DEPOSIT WITH COMMERCIAL BANKS . HE OBSERVED THAT DEDUCTION U/S. 80P(2)(A)(I) IS ALLOWED ON INTEREST EARNED FROM CREDIT FACILITIES PROVIDED BY THE ASSESSEE SOCIETY TO ITS MEMBERS AND THE SAID DEDUCTION IS NOT ALLOWED ON THE INTEREST INCOME EARNED FROM THE DEPOSIT MAINTAINED WITH THE COMMERCIAL BANK. HOWEVE R, THE ASSESSING OFFICER HAS CONSIDERED THE CLAIM OF THE ASSESSEE FOR ALLOWING PROPORTIONATE EXPENSES INCURRED TOWARDS EARNIN G THE AFORESAID INTEREST INCOME . CONSEQUE NTLY AFTER ALLOWING PROPORTIONATE EXPENSES OF RS.19,97,284 THE ASSESSING OFFICER HAS DISALLOWED SUCH NET INTEREST OF RS. 9,83, 327/ - U/S. 80P(2)(A)(I) OF THE ACT. 5 . AGGRIEVED ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) HAS SUSTAINED T HE DISALLOWANCE MADE BY T H E ASSESSING OFFICER AFTER PLACING RELIANCE I.T.A NO. 3128 /AHD/20 16 A.Y. 2012 - 13 PAGE NO THE ANKLAV MERCANTILE CO - OP. CREDIT SOCIETY LTD. VS. ITO 3 IN THE CASE OF STATE BANK OF INDIA VS. CIT (2016) 72 TAXMAN.COM 64 (GUJARAT) DECIDED BY THE HON BLE GUJARAT HIGH COURT. 6 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIA L ON RECORD CAREFULLY. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS. AS PER SECTION 80P(2)(A)(I) OF THE ACT, THE ASSESSEE IS ENGAGED IN PROVIDING CREDIT FACILITIES TO ITS MEMBERS, THEREFORE, THE INTEREST INCOME EARNED ON PROVIDING CREDIT FACILITY TO ITS MEMBERS IS DEDUCTIBLE U/S. 80P(2)(A)(I) OF THE ACT EXCLUDING THE INTEREST EARNED ON DEPOSIT MAINTAINED WITH THE COMMERCIAL BANK. WE ARE INCLINED WITH THE FINDINGS OF THE LD. CIT (A) THAT INVESTING SURPLUS FUNDS I N A BANK IS NO T PART OF THE BUSINESS OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS WHICH IS DEDUCTIBLE UNDER SECTION 80P(2)(A)(I) OF THE ACT, AND THE INTEREST DERIVED BY DEPOSITING SURPLUS FUNDS WITH THE NATIONALIZED BANK NOT BEING ATTRIBUTABLE TO THE BUSI NESS CARRIED ON BY THE ASSESSEE AND THE SAME CANNOT BE DEDUCTED U/S. 80P(2)(A)(I). W E FIND THAT THE HON BLE JURISDICTIONAL HIGH COURT HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE REVENUE VIDE STATE BANK OF INDIA VS. CIT (2016) 72 TAXMANN.COM 64 (GUJAR AT) THAT INTEREST INCOME ON DEPOSIT PLACED WITH THE COMMERCIAL BANKS IS NOT EXEMPT U/S. 80P(2)(A)(I) OF THE ACT. ACCORDINGLY THE APPEAL OF THE ASSESSEE IS DISMISSED. 7 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PR ONO UNCED IN THE OPEN C OURT ON 16 - 05 - 201 8 SD/ - SD/ - ( RAJPAL YADAV ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 16 /05 /2018 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT I.T.A NO. 3128 /AHD/20 16 A.Y. 2012 - 13 PAGE NO THE ANKLAV MERCANTILE CO - OP. CREDIT SOCIETY LTD. VS. ITO 4 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,