Maroli Bazar Vibhag Vividh Karyakari Sahkari Mandli Ltd., Navsari V. The Income Tax officer, Ward-3, Navsari

ITA 3130/AHD/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 94820 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-09-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 25-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL KUMAR
• Assessee Lawyers: TUSHAR HEMANI
• Keywords: Principle of natural justice; Question of law
• Section: 10; 2; 11; 143(3)

Judgement Text

ITA NO S . 3130/AHD/2014 & 1834/AHD/2013 ASSESSMENT YEAR S : 2 0 10 - 11 & 2009 - 10 PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH , SMC , AHMEDABAD [CORAM: PRAMOD KUMAR AM ] ITA NO S . 3130 / AHD / 2 0 1 4 AND 1834/AHD/2013 ASSESSMENT YEAR S : 20 10 - 11 & 2009 - 10 MAROLI BAZAR VIBHAG VIVIDH KARYAKARI ....... .. . ..... APPELLANT SAHKARI MANDI LIMITED, AT & POST: MAROLI BAZAR, TAL: JALAPORE, DISTT. NAVSARI . [PAN A A AAM 1095 J ] VS. INCOME TAX OFFICER, .... .................. .... .. RESPONDENT WARD - 3 , NAVSARI . APPEARANCES BY: TUSHAR HEMANI FOR THE APPELLANT ANIL KUMAR FOR THE RES PONDENT DATE OF CONCLUDING THE HEARING : SEPTEMBER 15 TH , 201 5 DATE OF PRONOUNCING THE ORDER : DECEMBER 8 TH , 2015 O R D E R 1. BY WAY OF TH ESE APPEAL S , THE A SSESS EE APPELLANT HAS CHALLENGED CORRECTNESS OF THE ORDER S DATED 17 TH OCTOBER, 2014 & 25 TH MARCH , 2013 PASSED BY THE LEARNED CIT(A) IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 ( THE ACT HEREINAFTER) , FOR THE ASSESSMENT YEAR S 20 10 - 11 & 2009 - 10 RESPECTIVELY. 2. BOTH THE PARTIES SUBMITTED THAT THOUGH THE APPEALS OF T HE ASSESSEE RELATE TO TWO DIFFERENT YEARS BUT THE ISSUE INVOLVED IN BOTH TH E APP E ALS ARE IDENTICAL EXCEPT FOR T HE ITA NO S . 3130/AHD/2014 & 1834/AHD/2013 ASSESSMENT YEAR S : 2 0 10 - 11 & 2009 - 10 PAGE 2 OF 4 ASSESSMENT YEAR A ND THE A MOUNT INVOLVED. I , THEREFORE , PROCEED TO DISPOSE OF BOTH TH E A PPEALS BY A CONSOLIDATED ORDER , FOR THE SAKE OF CONVEN IENCE. 3. THE ASSESSEE, IN ITA NO.3130/AHD/2014 , FOR ASSESSMENT YEAR 2010 - 11, HAS RAISED THE FOLLOWING GRIEVANCES : - 1. THE LD . CI T(A) HAS ERRED BOTH IN LAW AND ON THE FACTS OF T HE CASE IN WRONGLY INTERPRETING SECTION 80P OF THE ACT AND T HEREBY CONFIRMI NG THE ACTION OF LEARNED A . O . OF NOT ALLOWING CLAIM OF DEDUCTION U/S. 80P OF THE ACT FOR THE SUM OF RS.2,55,140/ - AND FURTHER ERRED IN HOLDING THAT THE SAID INCOME IS TAXABLE IN HANDS OF THE APPELLANT SEPARATELY A S INCOME FROM OTHER SOURCES . 2. BOTH THE LO WER AUTHORITIES HAVE ERRED IN NOT APPRECIATING THAT INVESTMENTS ARE AN INTEGRAL PART OF PROVIDING CREDIT FACILITIES A ND THEREFORE , ANY INCOME EARNED BY CARRYING OUT THE SAID ACTIVITIES QUALIFIES FOR CLAIM OF DEDUCTION U/S. 80P OF THE ACT. 3. ALTERNATIVELY AND WITHOUT PREJUDICE TO THE ABOVE, BOTH THE LOWER AUTHORITIES OUGHT TO HAVE ALLOWED EXPENDITURE INCURRED FOR EARNING SUCH INCOME AND OUGHT TO HAVE TAXED ONLY THE NET INCOME INSTEAD OF GROSS RECEIPT AS HA S BEEN DONE. 4. THE LD . CIT ( A ) HAS ERRED BOTH IN LAW AND ON T HE FACT S OF THE CASE IN NOT GRANTING STANDARD DEDUCTION U /S. 80P(2)(C) OF THE A CT. 5. BOTH THE LOWER AUTHORITIES HAVE PASSED THE ORDERS WITHOUT PROPERLY APPRECIATING THE FACT S AND THAT THEY FURTHER ERRED IN GROSSLY IGNORING VARIOUS SUBMISSIONS, EX PLANATIONS AND INFORMATION SUBMITTED BY THE APPELLANT FROM TIME TO TIME WHICH OUGHT T O HAVE BEEN CONSIDERED BEFORE PASSING THE IMPUGNED ORDER. THIS ACTION OF THE LOWER AUTHORITIES IS IN CLEAR BREACH OF LAW AND PRINCIPLES OF NATURAL JUSTICE AND THEREFORE D ESERVES TO BE QUASHED . 6. THE LEARNED CIT ( A ) HAS ERRED BOTH IN LAW AND ON THE FACTS OF THE CASE IN CONFIRMING ACTION OF THE LD . A . O . IN LEVYING INTEREST U/S 234B/D OF THE A CT. 4. THE LD . A UTHORISED REPRESENTATIVE, AT THE OUTS E T , SUBMITTED TH A T THOUGH THE ASSESSEE HAS RAISED VARIOUS GROUNDS BUT THE ONLY ISSUE WHICH REQUIRE ADJUDICATION IS WITH RESPECT T O DEDUCTION UNDER SECTION 80P OF THE ACT . ITA NO S . 3130/AHD/2014 & 1834/AHD/2013 ASSESSMENT YEAR S : 2 0 10 - 11 & 2009 - 10 PAGE 3 OF 4 5. LEARNED REPRESENTATIVES FAIRLY AGREE THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE, BY A DECISION OF THE C O - ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF AMAALSAD VIBHAG VIVIDH KARYAKARI SAHKARI KHEDUT M A NDALI LIMITED VS. ITO IN ITA NOS.1710 & 1711/AHD/2011 WHEREIN V IDE ORDER DATED 13.08.2015, THE TRIBUNAL HAS, INTER ALIA, OBSERVED AS FOLLOWS : - 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT CASE IS WITH RESPECT TO GRANTING OF DEDUCTION UNDER 80P ON THE INTEREST EARNED ON THE DEPOSITS KEPT WITH BANK. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE IS A CO - OPER ATIVE SOCIETY. IT IS ASSESSEE S SUBMISSION THAT THE AMOUNTS THAT WERE NOT IMMEDIATELY REQUIRED BY THE ASSESSEE WERE DEPOSITED IN THE BANK SO AS TO EARN INTEREST. THE AFORESAID SUBMISSION OF THE ASSESSEE HAS NOT BEEN CONTROVERTED BY REVENUE. WE FIND THAT TH E HON BLE KARNATAKA HIGH COURT IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT CO - OPERATIVE LTD. (SUPRA) HAD DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE BY OBSERVING AS UNDER: 10. IN THE INSTANT CASE, THE AMOUNT WHICH WAS INVESTED IN BANKS TO EARN INTEREST WAS NOT AN AMOUNT DUE TO ANY MEMBERS. IT WAS NOT THE LIABILITY. IT WAS NOT SHOWN AS LIABILITY IN THEIR ACCOUNT. IN FACT THIS AMOUNT WHICH IS IN THE NATURE OF PROFITS AND GAINS, WAS NOT IMMEDIATELY REQUIRED BY THE ASSESSEE FOR LENDING MONEY TO THE MEMBERS, AS THERE WERE NO TAKERS. THEREFORE, THEY HAD DEPOSITED THE MONEY IN A BANK SO AS TO EARN INTEREST. THE SAID INTEREST INCOME IS ATTRIBUTABLE TO CARRYING ON THE BUSINESS OF BANKING AND THEREFORE IT IS LIABLE TO BE DEDUCTED IN TERMS OF SECTIO N 80P (1) OF THE ACT. I FACT SIMILAR VIEW IS TAKEN BY THE ANDHRA PRADESH HIGH COURT IN THE CASE OF CIT V/S. ANDHRA PRADESH STATE CO - OPERATIVE BANK LTD., [2011] 200 TAXMAN 220/12 TAXMANN.COM 66. IN THAT VIEW OF THE MATTER, THE ORDER PASSED BY THE APPELLATE AUTHORITIES DENYING THE BENEFIT OF DEDUCTION OF THE AFORESAID AMOUNT IS UNSUSTAINABLE IN LAW. ACCORDINGLY IT IS HEREBY SET ASIDE. THE SUBSTANTIAL QUESTION OF LAW IS ANSWERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE. 8. WE ARE OF THE VIEW THAT TH E FACTS OF THE CASE ARE IDENTICAL TO THAT IN THE CASE OF TUMKAR MERCHANTS SOUHARDA CREDIT CO - OPERATIVE LTD. (SUPRA) WHICH HAS BEEN DECIDED BY HON BLE KARNATAKA HIGH COURT AND THEREFORE CONSIDERING THE FACTS OF THE PRESENT CASE IN THE LIGHT OF THE AFORESAID DECISION OF HON BLE KARNATAKA HIGH COURT AND IN THE ABSENCE OF ANY CONTRARY BINDING DECISION POINTED OUT BY REVENUE, WE ARE OF THE VIEW THAT THE INTEREST EARNED BY THE ASSESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80 P. WE THEREFORE SET ASIDE THE ORDER OF A.O. IN THE RESULT THE GROUND OF THE ASSESSEE IS ALLOWED. ITA NO S . 3130/AHD/2014 & 1834/AHD/2013 ASSESSMENT YEAR S : 2 0 10 - 11 & 2009 - 10 PAGE 4 OF 4 6. I SEE NO REASONS TO TAKE ANY OTHER VIEW OF THE MATTER THAN THE VIEW SO TAKEN BY THE CO - ORDINATE BENCH. THEREFORE, RE SPECTFULLY FOLLOWING THE ABOVE DECISION OF THE TRIBUNAL DATED 13.08.20 15 , I APPROVE THE ORDER OF THE LD. CIT(A) AND DECLINE TO INTERFERE IN THE MATTER. THUS, APPEAL FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2010 - 11 IS ALLOWED. 7. SINCE THE F A CTS OF THE CASE FOR ASSESSMENT YEAR 2009 - 10 ARE IDENTICAL TO THE F A CTS FOR A SSESSM ENT YEAR 2010 - 11 AS ADMITTED BY BOTH THE P A R T IES, THEREFORE , FOR THE REASONS STATED HEREINABOVE WHILE DECIDING THE APPE A L OF THE ASSESSEE FOR ASSESSMENT YEAR 2010 - 11, FOR SIMILAR REASONS I A LLOW THE GROUNDS OF THE A SSESSEE RAISED FOR A SSESSMENT YEAR 2009 - 10. 8 . IN THE RESULT, BOTH THE APPEAL S FILED BY THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 8 TH DAY OF DECEMBER , 2015. SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) AHMEDABAD, THE 8 TH DAY OF DECEMBER , 2015 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TR IBUNAL AHMEDABAD BENCHES, AHMEDABAD