The Assistant Commissioner of Income Tax, Circle-2 (1), Belagavi., V. The Ghataprabha Sahakari Sakkare Karkhane Niyamit., Belagavi

ITA 313/PAN/2015

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1370 (ITAT-PANAJI)
• Duration Of Justice: 1 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 03-08-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K M MAHESH
• Section: 43B; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI, HON'BLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 312 & 313/PNJ/2015 : (A.YS 2011 - 12 & 2012 - 13) ASST. COMMISSIONER OF INCOME TAX, CIRCLE - 2(1), BELGAUM (APPELLANT) VS. THE GHATAPRABHA SAHAKARI SAKKARE KARKHANE NIYAMIT, GOKAK, DIST. BELAG A VI PAN : AAAAT1021D (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : K.M. MAHESH, DR DATE OF HEARING : 14/09/2015 DATE OF PRONOUNCEMENT : 14/09/2015 O R D E R PER GEORGE MATHAN : 1. ITA NO. 312/PNJ/2015 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A), BELAGAVI IN ITA NO. 73/BGM/2014 - 15 DT. 5.5.2015 FOR THE A.Y 2011 - 12 AND ITA NO. 313/PNJ/2015 IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A), BELAGAVI IN ITA NO. 737/BGM/2014 - 15 DT. 18.5.2015 FOR THE A.Y 2012 - 13. SHRI K.M. MAHESH, LD. DR REPRESENTED ON BEHALF OF THE REVENUE AND NONE REPRESENTED ON BEHALF OF THE ASSESSEE. 2 ITA NOS. 312 & 313/PNJ/2015 (A.YS. : 2011 - 12 & 2012 - 13) 2. IT WAS SUBMITTED BY THE LD. DR THAT THE ONLY ISSUE ON BOTH THE APPEALS WAS AGAINST THE ACTION OF THE LD. CIT(A) IN DELETING THE DISALLOWANCE MADE BY THE AO BY INVOKING THE PROVISIONS OF SEC. 43B IN RESPEC T OF INTEREST PAYMENT DUE BY THE ASSESSEE TO M/S. BELGAUM DISTRICT CENTRAL CO - OPERATIVE BANK (BDCC BANK). IT WAS THE SUBMISSION BY THE LD. DR THAT THE LD. CIT(A) HAD DELETED THE DISALLOWANCE BY HOLDING THAT THE BDCC BANK, BELGAUM WAS NOT A SCHEDULED BANK AS DEFINED IN EXPLANATION 4 TO SEC. 43B OF THE ACT READ WITH EXPLANATION TO SEC. 11(5)(III) OF THE ACT. IT WAS THE SUBMISSION THAT THE LD. CIT(A) HAD RELIED UPON THE DECISION OF THE JURISDICTION HIGH COURT IN THE CASE OF UPENDRA T. KAPADIA REPORTED IN 2 36 CTR (BOM) 201 WHEREIN IT HAS BEEN HELD AS FOLLOWS : FROM THE READING OF THE ABOVE SECTIONS, IT IS AMPLY CLEAR THAT SECTION 43B OF THE ACT IS APPLICABLE ONLY IN RESPECT OF ANY AMOUNT PAID AS INTEREST TO A SCHEDULED BANK. A SCHEDULED BANK AS DEFINED IN EXPLANATION 4 TO SECTION 43B OF THE ACT WOULD HAVE THE SAME MEANING AS CONTAINED IN THE EXPLANATION TO SECTION 11(5) (III) OF THE ACT. THE EXPLANATION TO SECTION 11(5) (III) OF THE ACT DEFINES A SCHEDULED BANK TO MEAN VARIOUS BANKS REFERRED TO THEREIN I.E. STATE BANK OF INDIA, ITS SUBSIDIARIES, NATIONALIZED BANKS AND ANY BANK INCLUDED IN THE SECOND SCHEDULE TO RESERVE BANK OF INDIA ACT, 1924. THE SHREE MAHALAXMI CO. OP. BANK LTD. IS NOT MENTIONED IN THE SECOND SCHEDULE TO THE RESERVE BANK OF INDIA ACT, 1934 NOR COVERED BY ANY OTHER BANKS MENTIONED TO THE EXPLANATION TO SECTION 11(5)(III) OF THE ACT. CONSEQUENTLY, THE TRIBUNAL WAS CORRECT IN ITS CONCLUSION THAT NON - PAYMENT OF INTEREST AMOUNT TO A CO - OPERATIVE BANK WOULD NOT ATTRACT THE PROVISIONS OF SECTION 43B OF THE ACT. THIS IS FOR THE REASON THAT IN TERMS OF EXPLANATION (4) TO SECTION 43B OF THE SAID ACT SCHEDULED BANK WOULD HAVE A MEANING GIVEN TO IT IN THE EXPLANATION TO SECTION 11(5)(III) OF THE ACT. THEREFORE, ONE HAS TO MERELY LOOK AT THE EXPLANATIO N TO SECTION 11(5)(III) OF THE ACT TO DETERMINE WHETHER OR NOT SHREE MAHALAXMI MERCANTILE CO - OPERATIVE BANK LIMITED IS INCLUDED WITHIN THE MEANING OF A SCHEDULED BANK. SUB CLAUSE (III) OF SUB SECTION 5 OF SECTION 11 SPEAKS ABOUT THE DEPOSIT OF ANY AMOUNT IN A SCHEDULED BANK OR CO - OPERATIVE SOCIETY ENGAGED IN BANKING BUT THE SAME IS OF NO CONSEQUENCE. THIS IS FOR THE REASON THAT FOR PURPOSES OF SECTION 43B OF THE ACT WE WOULD BE GOVERNED BY THE MEANING 3 ITA NOS. 312 & 313/PNJ/2015 (A.YS. : 2011 - 12 & 2012 - 13) GIVEN IN THE EXPLANATION TO SECTION 11(5)(III) OF THE A CT AND NOT BY THE MAIN PART THEREOF. IT WAS THE SUBMISSION THAT THE ORDER OF THE LD. CIT(A) WAS LIABLE TO BE REVERSED. 3. WE HAVE CONSIDERED THE SUBMISSIONS. A PERUSAL OF THE ORDER OF THE LD. CIT(A) CLEARLY SHOWS THAT THE LD. CIT(A) HAS FOLLOWED THE DE CISION OF THE JURISDICTION HIGH COURT IN THE CASE OF UPENDRA T. KAPADIA REFERRED TO SUPRA WHEREIN IT HAS BEEN CATEGORICALLY HELD THAT ONE IS TO MERELY LOOK AT THE EXPLANATION TO SEC. 11(5)(III) OF THE ACT TO DETERMINE WHETHER THE SAID CO - OPERATIVE BANK IS TO BE INCLUDED WITHIN THE MEANING OF A SCHEDULED BANK. AS THE LD. CIT(A) HAS ONLY FOLLOW ED THE DECISION OF THE JURISDICTION HIGH COURT OF BOMBAY REFERRED TO SUPRA , AND AS THE REVENUE HAS NOT BEEN ABLE TO DISLODGE THIS FINDING NOR HAS THE REVENUE BEEN ABLE TO POINT OUT THAT BDCC BANK IS NOT A SCHEDULED BANK, WE ARE OF THE VIEW THAT THE FINDING OF THE LD. CIT(A) ON THE ISSUE IS ON A RIGHT FOOTING AND DOES NOT CALL FOR OUR INTERFERENCE. 4. IN THE RESULT, BOTH THE APPEALS OF THE REVENUE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/09/2015. S D / - ( N.S. SAINI) ACCOUNTANT MEMBER S D / - ( GEORGE MATHAN ) JUDICIAL MEMBER PLACE : PANAJI / GOA DATED : 14/09/ 201 5 *SSL* 4 ITA NOS. 312 & 313/PNJ/2015 (A.YS. : 2011 - 12 & 2012 - 13) COPY TO : (1) APPELLANT (2) RESPONDENT (3) CIT(A) CONCERNED (4) CIT CONCERNED (5) D.R (6) GUARD FILE TRUE COPY, BY ORDER , 5 ITA NOS. 312 & 313/PNJ/2015 (A.YS. : 2011 - 12 & 2012 - 13) DATE INITIAL ORIGINAL DICTATION PAD & DRAFT ORDER ARE ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 14/09/2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 1 5 /09/2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 1 5 /09/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 1 5 /09/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 1 5 /09/2015 SR.PS 6. DATE OF PRONOUNCEMENT 14/09/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 1 5 /09/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER