JAIPUR PENSIONERS HITKARI SAHAKARI SAMITI LTD., JAIPUR V. INCOME TAX OFFICER, WARD-3(2), JAIPUR

ITA 321/JPR/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 2899 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 06-03-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: J C KULHARI JCIT DHK
• Keywords: Earning of tax free income
• Section: 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 321/JP/2018 FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2009-10 JAIPUR PENSIONERS HITKARI SAHAKARI SAMITI LTD., D-264, DURGA MARG, BANIPARK, JAIPUR. CUKE VS. INCOME TAX OFFICER, WARD 3(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AAAAJ 0276 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI J.C. KULHARI (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 23/08/2018 MN?KKS'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 27/08/2018 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 01/11/2017 OF LD. CIT(A)-I, JAIPUR FOR THE A.Y. 200 9-10. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DECIDING THE APPEAL EX PARTE BY REFUSING THE ADJOURNMENT SOUGHT BY THE A/R OF THE ASSESSEE. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE ADDITION OF RS. 35,92,641/- ON ACCOUNT OF DIFFERENC E IN RECEIPTS OF RS. 41,62,389/- SHOWN IN FORM NO. 26AS AND RECEIPT OF RS. 5,69,748/- SHOWN IN THE RETURN OF INCOME IGNORING THAT THE DIF FERENTIAL AMOUNT IS ON ACCOUNT OF INCORRECT AMOUNT REPORTED BY THE D EDUCTOR IN FORM 26AS OR ON ACCOUNT OF THE FACT THAT THE RECEIPT HAS ALREADY BEEN ITA 321/JP/2018_ JAIPUR PENSIONERS HITKARI SAHARI SAMITI LTD. VS IT O 2 TAKEN INTO ACCOUNT IN THE BOOKS IN FY 2007-08 RELEV ANT TO A.Y. 2008- 09. 3. THE ASSESSEE CRAVES TO AMEND, ALTER AND MODIFY A NY OF THE GROUNDS OF APPEAL. 3. NECESSARY COST BE ALLOWED TO THE ASSESSEE. 2. THE ASSESSEE IS A COOPERATIVE SOCIETY ENGAGED IN THE ACTIVITY OF COLLECTION OF ELECTRICITY AND WATER BILLS OF JVVNL/P UBLIC HEALTH DEPARTMENT (PHD). THE ASSESSEE RECEIVED COMMISSION FROM THESE T WO GOVERNMENT AGENCIES AGAINST THE SERVICES OF COLLECTING OF ELEC TRICITY AND WATER BILLS FROM THE PUBLIC/CONSUMERS. THE ASSESSEE FILED ITS R ETURN OF INCOME ON 30 TH SEPTEMBER, 2009 FOR NET LOSS OF RS. 10,47,309/-. THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS NOTED THAT THE AS SESSEE HAS SHOWN GROSS RECEIPT AT RS. 5,69,748/- WHEREAS AS PER THE F ORM 26AS, TOTAL RECEIPTS FOR THE YEAR IS RS. 41,42,389/-. THE ASSESS EE EXPLAINED THAT THE RECEIPT REFLECTED IN THE FORM 26AS IS ALREADY ACCOU NTED IN A.Y. 2008-09 AS THE CONTRACT FOR COLLECTING THE ELECTRICITY/WATER BI LLS ON BEHALF OF THE JVVNL/PHD WAS ALREADY EXPIRED AND IT WAS NOT RENEWED A ND THEREFORE, THERE WAS NO COMMISSION INCOME FOR THE YEAR UNDER CO NSIDERATION. THE ASSESSING OFFICER DID NOT ACCEPT THIS CONTENTION OF THE ASSESSEE AND MADE ADDITION OF DIFFERENTIAL AMOUNT OF RS. 35,92,641/-. 3. THE ASSESSEE CHALLENGED THE ACTION OF THE ASSESSI NG OFFICER BEFORE THE LD. CIT(A) BUT COULD NOT SUCCEED. ITA 321/JP/2018_ JAIPUR PENSIONERS HITKARI SAHARI SAMITI LTD. VS IT O 3 4. BEFORE US, THE LD AR OF THE ASSESSEE HAS SUBMITT ED THAT THE ASSESSEE SOUGHT TIME TO RECONCILE THE DIFFERENCES B ETWEEN THE RECEIPTS DECLARED IN THE BOOKS OF ACCOUNT AND AS PER FORM 26 AS, HOWEVER, THE LD. CIT(A) WITHOUT ALLOWING SUCH TIME, HAS CONFIRMED THE ADDITION MADE BY THE ASSESSING OFFICER. THE LD AR HAS FURTHER REFERRE D TO THE DETAILS OF FORM NO. 26AS AND SUBMITTED THAT THE JVVNL HAS ISSU ED AN AMENDED FORM NO. 26AS WHEREIN THE CORRECT RECEIPT/PAYMENT I S SHOWN AT RS. 10,73,382/- AS AGAINST RS. 33,21,705/- SHOWN IN THE ORIGINAL FORM NO. 26AS CONSIDERED BY THE ASSESSING OFFICER. THUS, THE LD AR HAS SUBMITTED THAT THERE WAS A FACTUAL MISTAKE IN THE AMOUNT SHOWN IN THE FORM 26AS BEING RECEIPT FROM JVVNL, WHICH WAS SUBSEQUENTLY RECT IFIED AND THE AMENDED FORM NO. 26AS WAS ISSUED, WHICH IS PLACED AT PAGE NO. 13 OF THE PAPER BOOK. THE LD AR HAS FURTHER SUBMITTED THAT SINCE DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS NOT REND ERED ANY SERVICE OF COLLECTING BILLS ON BEHALF OF THE JVVNL AND PHED AS THE CONTRACT WAS EXPIRED AND IT WAS NOT RENEWED, THEREFORE, THE ENTIRE RECEIPT SHOWN IN THE FORM NO. 26AS PERTAINS TO THE EARLIER YEAR. HE HAS REFERRED THE AMOUNT AS RECEIVABLES AS ON 31/3/2008 AT PAGE NO. 23 OF TH E PAPER BOOK SHOWN IN THE BALANCE SHEET AS ON 31/3/2008 AS WELL AS THE RECEIVABLES AS ON 31/3/2009 AS PER THE BALANCE SHEET AS ON 31/3/2009 AND SUBMITTED THAT THE DIFFERENCES OF THESE TWO AMOUNTS OF RECEIVABLES ON ACCOUNT OF ITA 321/JP/2018_ JAIPUR PENSIONERS HITKARI SAHARI SAMITI LTD. VS IT O 4 COMMISSION FROM PHED AND RESB IS THE SAME AS SHOWN I N THE AMENDED FORM NO. 26AS. HENCE, THE LD AR HAS SUBMITTED THAT THE ENTIRE AMOUNT WAS ALREADY CONSIDERED IN THE INCOME OF THE ASSESSEE FOR THE A.Y. 2008- 09 AND THEREFORE, NO ADDITION CAN BE MADE FOR THE Y EAR UNDER CONSIDERATION. ALTERNATIVELY, THE LD AR HAS SUBMITT ED THAT SINCE THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80P(2) OF TH E INCOME TAX ACT, 1961 (IN SHORT THE ACT), THEREFORE, EVEN IF ANY ADDITION IS MADE BY THE ASSESSING OFFICER, THERE WILL BE NO TAX LIABILITY AS THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80P OF THE ACT. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED UPON THE DECISION OF THIS TRIBUNAL DATED 24/1 0/2018 IN ASSESSEES OWN CASE FOR THE A.Y. 2005-08 IN ITA NO. 915/JP/2008 . HENCE, THE LD AR HAS SUBMITTED THAT THE ADDITION MADE BY THE ASSESSI NG OFFICER ON ACCOUNT OF DIFFERENCE IN THE RECEIPTS DECLARED IN THE BOOKS OF ACCOUNT AND THOSE SHOWN IN THE FORM NO. 26AS MAY BE DELETED. 5. ON THE OTHER HAND, THE LD DR HAS SUBMITTED THAT THE DESPITE SUFFICIENT OPPORTUNITIES WERE GIVEN BY THE ASSESSING OFFICER AS WELL AS BY THE LD. CIT(A), THE ASSESSEE FAILED TO RECONCILE THE DIFFERENCES BETWEEN THE AMOUNT OF RECEIPTS SHOWN IN THE BOOKS OF ACCOUNT AND AS PER THE FORM NO. 26AS. THE ASSESSEE EVEN FAILED TO ESTABLISH THAT THE SAID AMOUNT AS SHOWN IN FORM NO. 26AS PERTAINS TO THE EAR LIER ASSESSMENT ITA 321/JP/2018_ JAIPUR PENSIONERS HITKARI SAHARI SAMITI LTD. VS IT O 5 YEAR WAS ALREADY CONSIDERED WHILE COMPUTING THE INCOM E FOR THE EARLIER ASSESSMENT YEAR. THE LD DR HAS RELIED UPON THE ORDER S OF THE AUTHORITIES BELOW. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THE ASSESSING OFFICER PROPOSED T O MAKE THE ADDITION ON ACCOUNT OF DIFFERENCE IN THE TOTAL RECEIPTS SHOW N IN THE FORM NO. 26AS OF RS. 41,62,389/- AS AGAINST THE RECEIPTS SHOWN IN THE BOOKS OF ACCOUNT AT RS. 5,69,748/-. THUS, THE ASSESSING OFFICER PROPO SED TO MAKE THE ADDITION OF THE DIFFERENTIAL AMOUNT OF RS. 35,92,64 1/- WHILE ISSUING THE NOTICE U/S 148 OF THE ACT. WE FIND THAT THE ORIGINA L FORM NO. 26AS SHOWS THE TOTAL RECEIPTS FOR THE YEAR UNDER CONSIDERATION AT RS. 41,62,389/-, WHICH COMPRISES AN AMOUNT OF RS. 33,21,705/- FROM JV VNL. SUBSEQUENTLY AN AMENDED FORM NO. 26AS WAS ISSUED WHEREIN THE AMOUN T OF RECEIPT FROM JVVNL WAS SHOWN AT RS. 10,73,382/- AS AGAINST TH E AMOUNT OF RS. 33,21,705/-. THEREFORE, THERE WAS A FACTUAL MISTAKE IN THE AMOUNT SHOWN IN THE ORIGINAL FORM NO. 26AS WHICH WAS RECTIFIED SUB SEQUENTLY AND AMOUNT OF RS. 10,73,382/- WAS SHOWN AS THE CORRECT AM OUNT OF RECEIPT DURING THE YEAR. NEITHER THE ASSESSING OFFICER NOR THE LD. CIT(A) HAS CONSIDERED THIS AMENDED FORM NO. 26AS SHOWING THE CO RRECT AMOUNT OF RECEIPT. FURTHER WE FIND THAT THE RECEIVABLES AS PER THE BALANCE SHEET AS ITA 321/JP/2018_ JAIPUR PENSIONERS HITKARI SAHARI SAMITI LTD. VS IT O 6 ON 31/3/2008, THE ASSESSEE HAS SHOWN THE RECEIVABLE S ON ACCOUNT OF COMMISSION AT RS. 28,81,904/- AND AS PER THE BALANC E SHEET AS ON 31/3/2009 THE RECEIVABLES ON ACCOUNT OF COMMISSION HAS BEEN SHOWN AT RS. 13,15,501/-. THUS, THERE IS REDUCTION OF ABOUT RS. 15 LACS IN THE BALANCE OF COMMISSION RECEIVABLES FROM 31/3/2008 TO 31/3/2009. SINCE THERE WAS NO COMMISSION INCOME DURING THE YEAR UNDER CONSIDERATION IN VIEW OF THE FACT THAT THE CONTRACT WAS ALREADY EXPIRE D AND THE ASSESSEE HAS NOT RENDERED ANY SERVICE DURING THE YEAR UNDER CONSIDERATION, THEREFORE, THE DIFFERENTIAL AMOUNT IS THE RECEIPT D URING THE YEAR WHICH PERTAINS TO THE EARLIER YEAR I.E. THE ASSESSMENT YE AR 2008-09. HOWEVER, ALL THESE FACTS WERE NOT CONSIDERED BY THE AUTHORITIES B ELOW DUE TO THE REASON THAT THE AMENDED FORM NO. 26AS WAS NOT PRODUC ED BEFORE THE ASSESSING OFFICER AND THE LD. CIT(A) DID NOT ALLOW TH E TIME TO THE ASSESSEE TO SUBMIT THE RECONCILIATION OF RECEIPTS AND SUPPOR TING DOCUMENTS. HENCE, IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT PRIMA FACIE THE ASSESEE HAS BROUGHT ON RECORD THE MATERIA L TO SHOW THAT THE CORRECT FIGURE OF RECEIPTS AS PER THE AMENDED FORM NO. 26AS IS RS. 19,14,066/- AS AGAINST RS. 41,62,389/- OUT OF WHICH THE AMOUNT OF RS. 5,18,392/- WAS ALREADY DECLARED BY THE ASSESSEE AND NOT IN DISPUTE AND HENCE THE DIFFERENCE COMES TO ABOUT RS. 14 LACS. AS WE HAVE ALREADY NOTED THAT THE AMOUNT AT ABOUT RS. 15 LACS WAS RECEI VED BY THE ASSESSEE ITA 321/JP/2018_ JAIPUR PENSIONERS HITKARI SAHARI SAMITI LTD. VS IT O 7 FROM THE RECEIVABLES AS ON 31/3/2008 AND THE BALANC E OF RECEIVABLES SHOWN AS ON 31/3/2009 IS RS. 13,15,501/-. HENCE THE ASSESSING OFFICER IS DIRECTED TO CONSIDER THE AMENDED FORM NO. 26AS AS W ELL AS THESE BALANCES SHOWN BY THE ASSESSEE AS ON 31/3/2008 AS WEL L AS ON 31/3/2009 ON ACCOUNT OF COMMISSION RECEIVABLES AND THEN TO CO MPUTE THE DIFFERENCE, IF ANY, TO BE ADDED IN THE INCOME OF TH E ASSESSEE. 7. FURTHER WE FIND THAT IN THE A.Y. 2005-06, THE TRIB UNAL HAS CONSIDERED THE ISSUE OF ELIGIBILITY OF DEDUCTION U/ S 80P(2) OF THE ACT ON THE INTEREST FROM FDR AND HELD IN PARA 4 AS UNDER: 4. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. WE CONCUR WITH THE VIEWS OF LD.CIT(A). IN THE CASE OF KERALA STATE COOPERATIVE MARKETING FEDERATION LTD. 231 ITR 814, THE HON'BLE SUPREME COURT OF INDIA HAS OBSERVED THAT WHENEVER A QUESTIO N ARISES AS TO WHETHER ANY PARTICULAR CATEGORY OF INCOME OF A COOP ERATIVE SOCIETY IS EXEMPT FROM TAX, WHAT HAS TO BE CONSIDERED IS, AS T O WHETHER THE INCOME FALLS WITHIN ONE OF THE SEVERAL HEADS OF EXEMPTION AND IF IT FALLS WITHIN ANY ONE OF THE HEADS OF EXEMPTION, IT WOULD BE FREE FROM TAXES NOTWITHSTANDING THAT THE CONDITIONS OF ANOTHER HEAD OF EXEMPTION ARE NOT SATISFIED AND SUCH INCOME IS NOT FREE FROM TAX UNDER THAT HEAD OF EXEMPTION. THUS EACH HEAD OF EXEMPTION ENUMERATED I N SECTION WOULD BE TREATED AS A SEPARATE AND DISTINCT HEAD OF EXEMP TION. THE ASSESSEE'S CLAIM IS THAT THE INCOME OF THE SOCIETY FALLS UNDER THE CATEGORY THE COLLECTIVE DISPOSAL OF THE LABOUR OF ITS MEMBERS. THUS THE INCOME OF COOPERATIVE SOCIETY WHO IS ENGAGED IN COLLECTIVE DI SPOSAL OF LABOUR OF ITS MEMBERS WILL BE EXEMPTED IF AMOUNTS OF PROFIT AND G AINS OF BUSINESS IS ITA 321/JP/2018_ JAIPUR PENSIONERS HITKARI SAHARI SAMITI LTD. VS IT O 8 ATTRIBUTABLE TO THESE ACTIVITIES. THE QUESTION IS W HETHER THE INTEREST INCOME ARISING FROM FDR CAN BE CONSIDERED AS INCOME ATTRIBUTABLE TO COLLECTIVE DISPOSAL OF LABOUR OF ITS MEMBERS. IN TH E CASE OF BIHAR STATE COOPERATIVE BANK LTD. VS. CIT (1960) 39 ITR 114, TH E HON'BLE SUPREME COURT OF INDIA OBSERVED THAT IT CANNOT BE SAID THAT THE FUNDS OF THE BANK WHICH WERE NOT LENT TO BORROWERS BUT LAID OUT IN TH E FORM OF DEPOSITS IN ANOTHER BANK TO ADD TO THE PROFIT INSTEAD OF LYING IDLE NECESSARILY CEASED TO BE A PART OF THE STOCK IN TRADE OF THE BANK OR T HAT INTEREST ARISING THEREFROM DID NOT FORM PART OF ITS BUSINESS PROFITS . THUS THE HON'BLE SUPREME COURT OF INDIA HAS HELD THAT INTEREST DERIV ED BY THE COOPERATIVE BANK BY PUTTING THE FUNDS WITH SOME OTHER BANK WILL ALSO FORM THE PART OF ITS BUSINESS PROFITS. THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF I.T.O. VS. KARNATAKA CENTRAL COOPERATIVE BANK LTD. 266 ITR 635, AFTER CONSIDERING ABOVE REFERRED DECISION OF HON'BLE SUPR EME COURT OF INDIA IN THE CASE OF BIHAR STATE COOPERATIVE BANK HAS HELD T HAT INCOME RECEIVED OUT OF RESERVE FUND WAS EXEMPTED FROM PAYMENT OF TA X. ACCORDINGLY IN THE PRESENT CASE ALSO, THE INCOME ON FDRS MAY BE CO NSIDERED AS EXEMPT INCOME U/S 80P OF THE SOCIETY. THEREFORE, WE FIND N O INFIRMITY IN THE ORDER OF THE LD.CIT(A) WHO HAS RIGHTLY DELETED THE ADDITI ON MADE BY THE AO. THUS THE SOLITARY GROUND OF THE REVENUE IS DISMISSE D. HENCE, EVEN IF ANY ADDITION TO BE MADE ON ACCOUNT O F DIFFERENCE BETWEEN THE RECEIPTS SHOWN IN THE BOOKS AND THE RECEIPTS SHO WN IN THE FORM NO. 26AS, THE SAID AMOUNT WOULD BE ELIGIBLE FOR DEDUCTIO N U/S 80P OF THE ACT IN VIEW OF THE DECISION OF THIS TRIBUNAL IN ASSESSEE S OWN CASE FOR THE A.Y. 2005-06. ACCORDINGLY, WE SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND REMIT THE MATTER BACK TO THE RECORD OF THE ASSE SSING OFFICER FOR ITA 321/JP/2018_ JAIPUR PENSIONERS HITKARI SAHARI SAMITI LTD. VS IT O 9 LIMITED PURPOSE OF COMPUTING THE DIFFERENCES IF ANY AFTER RECONCILIATION OF THE BALANCES. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/08/2018. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 27 TH AUGUST, 2018 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- JAIPUR PENSIONERS HITKARI SAHAKARI SA MITI LTD., JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD 3(2), JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 321/JP/2018) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR