Appeal details
Counselvise Citation
[2018] 125 COUNSELVISE.COM (IT) 8322 (ITAT-AHMEDABAD)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 5 month(s) 18 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
23-05-2018
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
SMC
Assessment Year
2013-2014
Appeal Filed On
05-12-2016
Judgement Text
, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH A BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA NO. 3215/AHD/2016 / ASSESSMENT YEAR: 2013-14 ANYONYA SAHAYAK SAHAKARI MANDALI LTD. SIKKWALANI KHADKI NAGARKUVA ROAD PETLAND 388450. PAN : AAAAA 5140 J VS DCIT, CIR.1(3) VADODARA. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI PARIN SHAH, AR REVENUE BY : SHRI PRASSON KABRA, SR.DR / DATE OF HEARING : 23/05/2018 /DATE OF PRONOUNCEMENT : 23/05/2018 O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER : PRESENT APPEAL IS DIRECTED AT THE INSTANCE OF THE ASSESSEE AGAINST OR DER OF LD.CIT(A)-4, BARODA DATED 22.7.2016 PASSED FOR THE ASSTT.YEAR 20 13-14. 2. IN THE GROUNDS OF APPEAL, SOLE ISSUE INVOLVED FO R ADJUDICATION RELATES TO DISALLOWANCE INTEREST INCOME EARNED ON F IXED DEPOSITS WITH BANKS WHICH WAS CLAIMED BY THE ASSESSEE AS DEDUCTIO N UNDER SECTION 80P(2)(A)(I) OF THE INCOME TAX ACT. 3. ON BEHALF OF SENIOR COUNSEL FOR THE ASSESSEE, SH RI S.N. SOPAKAR, AN APPLICATION DATED 21.5.2018 IS FILED FOR ADJOURNMEN T OF CASE ON THE GROUND THAT SHRI S.N. SOPARKAR IS OUT OF INDIA. WE REJECT THIS REQUEST OF THE ASSESSEE, SINCE THE LD.DR FOR THE REVENUE POINT ED OUT THAT THE ISSUE ITA NO.3215/AHD/2016 - 2 - INVOLVED IN THE APPEAL IS OTHERWISE ALSO SQUARELY C OVERED AGAINST THE ASSESSEE BY THE DECISION OF THE HONBLE JURISDICTIO NAL HIGH COURT IN THE CASE OF CIT VS. STATE BANK OF INDIA, 389 ITR 578, A ND THIS TRIBUNAL HAS FOLLOWED IN NUMBER OF CASES DECIDED EARLIER. 4. HAVING HEARD LD.DR AND GONE THROUGH THE RECORD, WE FIND THAT ASSESSEE IS A COOPERATIVE SOCIETY ENGAGED IN PROVID ING CREDIT FACILITIES TO ITS MEMBERS. THE ASSESSEE HAS FILED ITS RETURN OF I NCOME ON 16.9.2013 DECLARING TOTAL INCOME AT RS.NIL BY CLAIMING ENTIRE NET INCOME DEDUCTIBLE UNDER SECTION 80P(2)(A) OF THE INCOME TA X ACT. THIS CLAIM WAS DENIED BY THE AO ON THE GROUND THAT ASSESSEE BE ING A COOPERATIVE CREDIT SOCIETY ENGAGED IN PROVIDING CREDIT FACILITI ES TO ITS MEMBERS DEPOSITS ITS SURPLUS FUND IN FDRS/SB ACCOUNTS WITH NATIONALIZED BANK AND EARN INTEREST OUT OF SUCH DEPOSITS, THEN SUCH I NTEREST INCOME WOULD NOT QUALIFY FOR DEDUCTION UNDER THE RELEVANT PROVIS IONS APPENDED TO SECTION 80P OF THE ACT. THE AO ACCORDINGLY REJECTED THE CLAIM OF THE ASSESSEE. THE LD.CIT(A) UPHELD THE ORDER OF THE AO BY TAKING SUPPORT FROM THE DECISION OF THE HONBLE JURISDICTIONAL HIG H COURT IN THE CASE OF CIT VS. STATE BANK OF INDIA (SUPRA). WE FIND THAT HONBLE JURISDICTIONAL HIGH COURT HAS HELD THAT INTEREST EARNED FROM INVES TMENT MADE IN NATIONALIZED BANK BY A COOPERATIVE SOCIETY ENGAGED IN PROVIDING CREDIT FACILITIES TO ITS MEMBERS, IS NOT DEDUCTIBLE UNDER SECTION 80P(2)(D). IN RECENT PAST THE TRIBUNAL IN NUMBER OF DECISIONS INV OLVING SIMILAR ISSUE HAS TAKEN A CONSISTENT VIEW ON THIS ISSUE BY FOLLOW ING ABOVE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT. IN THIS VIEW OF THE MATTER, WE ARE NOT INCLINED TO DISTURB ORDERS OF THE REVENUE AUTHO RITIES ON THIS ISSUE, WHICH WE UPHOLD. HOWEVER, ANY EXPENDITURE INCURRED BY THE ASSESSEE FOR EARNING SUCH INCOME COULD BE ALLOWED TO IT. IN OTHER WORDS, THE ITA NO.3215/AHD/2016 - 3 - LD.AO HAS TO DETERMINE THE NET INTEREST INCOME EARN ED BY THE ASSESSEE ON SUCH INVESTMENT WITH BANK, AND ONLY THEREAFTER T HAT INCOME HAS TO BE EXCLUDED FROM THE ADMISSIBILITY OF DEDUCTION UNDER SECTION 80P(2) OF THE ACT. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED TO BE DISMISSED. PRONOUNCED IN THE OPEN COURT ON 23 RD MAY, 2018. SD/- SD/- (WASEEM AHMED) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER
