Surat National Co.Op.Bank Ltd., Surat V. The ACIT.,Circle-2, Surat

ITA 3242/AHD/2010

• Counselvise Citation: 324220514 RSA 2010
• Duration Of Justice: 2 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2013
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 08-07-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 07-12-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: P L KUREEL
• Assessee Lawyers: R N VEPARI
• Keywords: Depreciation; Business expenditure; Opportunity of being heard
• Section: 234B; 69; 37

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE SHRI D. K. TYAGI, JM AND SHRI T. R. MEENA, AM) ITA NO.3242/AHD/2010 (AY: 2007-08) SURAT NATIONAL CO-OP BANK LTD., 3/4016, NABNIDHI NAVAPURA, KARVA ROAD, SURAT P. A. NO. AAAAS 5702 J VS THE A. C. I. T., CIRCLE-2, AAYAKAR BHAVAN, OPP. NEW CIVIL HOSPITAL, MAJURA GATE, SURAT (APPELLANT) (RESPONDENT) APPELLANT BY SHRI R. N. VEPARI, AR RESPONDENT BY SHRI P. L. KUREEL, SR. DR DATE OF HEARING: 08-07-2013 DATE OF PRONOUNCEMENT: -08-2013 ORDER PER T. R. MEENA : THE ASSESSEES APPEAL IS EMANATING FROM THE ORDER OF THE LEARNED CIT(A)-II, AHMEDABAD DATED 19-10-2010, FOR THE ASSESSMENT YEAR 2007-08. 2. THE EFFECTIVE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: (I). DISALLOWANCE OF CLAIM OF DEPRECIATION ALLOWAN CE :- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND AS P ER THE LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE ALLOWED DEPRECIATION IN RESPECT OF DIMINUTION IN VA LUE OF SECURITIES HELD BY THE BANK WHICH WERE HELD AS AFS I.E. AVAIL ABLE FOR SALE. (II). DISALLOWANCE OF CLAIM FOR PAYMENT MADE TO MEM BERS :- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND AS PER THE LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) OUGHT TO HAVE ALLOWED DEDUCTION OF RS.3,33,088/- IN RESPECT OF AM OUNT SPENT FOR THE WELFARE OF THE MEMBERS. IT A NO.3242/AHD/2010 (AY: 2007-08) SURAT NATIONAL CO-OP. BANK LTD. VS ACIT, CIR-2, SURA T 2 (III) DISALLOWANCE OF CONTRIBUTION TO URBAN BANK CR EDIT EQUALISATION FUND :- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND AS PER THE LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN DISALLOWING A SUM OF RS.5,20,609/-IN RESPECT OF CONTRIBUTION TO URBAN BANK CREDIT EQUALISATION FUND AS MANDATED BY SECTION 115 J OF THE GUJARAT CO-OP. SOCIETIES ACT, 1961. (IV). PAYMENT OF EDUCATION FUND - RS.3,00,000/-:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND AS PER THE LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN CONFIRMING DISALLOWANCE OF A SUM OF RS.3,00,000/- AS PER MANDA TORY PROVISIONS OF SECTION 69 OF THE GUJARAT CO-OP. SOCI ETIES ACT, 1961. (V) LEVY OF SURCHARGE :- THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ER RED IN NOT CONSIDERING GROUND NO. VI & VII IN RESPECT OF LEVY OF SURCHARGE AND CHARGE OF INTEREST U/S. 234B OF THE ACT RESPECTIVEL Y. 3. THE FIRST GROUND OF ASSESSEES APPEAL IS AGAINST NOT ALLOWING DEPRECIATION IN RESPECT OF DIMINUTION VALUE OF THE SECURITIES HE LD BY THE ASSESSEE AT RS.55 LACS. THE AO OBSERVED THAT THE ASSESSEE HAD DEDUCT ED AN AMOUNT OF RS.55 LACS UNDER THE HEAD INVESTMENT DEPRECIATION BEFORE OFF ERING PROFIT FOR TAXATION. THE AO GAVE SHOW-CAUSE NOTICE ON THIS ISSUE WHICH WAS R EPLIED BY THE ASSESSEE VIDE LETTER DATED 05-11-2009. THE ASSESSEES REPLY WAS CONSIDERED BY THE AO. THE ASSESSEES CLAIM BEFORE THE AO THAT THERE WAS D IFFERENCE OF THE MARKET VALUE AND COST PRICE OF THE INVESTMENT AS ON 31-03- 2007 AND THUS WAS BOOKED AS PER THE RBI GUIDELINES IN CASE OF HELD FOR TRADING (HFT) AND AVAILABLE FOR SALE (AFS) SECURITIES FORMING STOCK IN TRADE OF THE BANK AND DEPRECIATION/APPRECIATION IS TO BE AGGREGATED STRIP-WISE AND ONLY NET DEPRECI ATION IS REQUIRED TO BE PROVIDED IN THE ACCOUNTS. BUT THE AO FOUND THAT AS PER SECTION 37 OF THE ACT, THIS IS A PROVISION AND LIABILITY HAD NOT BEEN CRYSTALLI ZED. THUS, HE HELD THAT PROVISIONS AS PER THE RBI GUIDELINES FOR INVESTMENT PORTFOLIO I.E. HFT AND AFS CATEGORY ARE CONTINGENT IN NATURE. THUS, HE MADE ADDITION OF RS. 55 LACS TO THE INCOME OF THE ASSESSEE. BEING AGGRIEVED BY THE ORDER OF THE AO, T HE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) WHO HAS SET ASIDE THE ORDE R OF THE AO BY OBSERVING IT A NO.3242/AHD/2010 (AY: 2007-08) SURAT NATIONAL CO-OP. BANK LTD. VS ACIT, CIR-2, SURA T 3 THAT CBDT INSTRUCTION NO.17/2008 DATED 26-11-2008 H AS RELATED TO THE ASSESSMENT OF BANK WHICH HAS BEEN REPRODUCED BY CIT (A) ON PAGE 6 OF HIS ORDER, AFTER VERIFYING THE DETAILS OF THE STRIP-WIS E SECURITY IT WAS FOUND BY THE CIT(A) THAT IN RESPECT OF GOVERNMENT OF INDIA BOND 2012 AND 2018 AS AGAINST FACE VALUE OF RS.30 LACS, RS.20 LACS, RS.50 LACS, R S.10 LACS, RS.20 LACS AND RS.10 LACS THE MARKET PRICE HAD BEEN AT NIL. SIMILA RLY, IN RESPECT OF STATE GOVERNMENT SECURITIES, THE GSTL BOND OF 2009 IS AGA INST COST PRICE OF RS.20 LACS, THE MARKET VALUE HAS BEEN SHOWN AT NIL AND IN RESPECT OF OTHER SECURITIES AS AGAINST COST OF SBI BONDS RS.8.98 CRORES, HUDCO RS. 1.5 CRORES, SSNN LTD. RS.10.5 LACS, HUDCO RS.1 CRORES AND BANK OF INDIA B OND RS.2 CRORES, THE MARKET VALUE HAD BEEN SHOWN AT RS.100/- ONLY. BUT T HE DIFFERENCE BETWEEN THE COST PRICE AND MARKET VALUE OF THE ABOVE BONDS AND SECURITIES HAD BEEN SHOWN AT RS.NIL. ON THIS BASIS, THE CIT(A) DIRECTED THE A O TO VERIFY THE COST PRICE AS WELL AS MARKET PRICE OF THE GOVERNMENT SECURITIES AND ALLOW THE DEPRECIATION OR APPRECIATION AS PER THE BOARD CIRCULAR NO.17/2008, SUPRA. NOW, THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORDER OF THE CIT(A) . 4. THE LEARNED COUNSEL FOR THE ASSESSEE FILED PAPER BOOK WHICH INCLUDED THE REPLY FILED BY THE ASSESSEE TO THE CIT(A) AND VARIO US REPLIES TO THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS. HE HAS ALSO DRAWN OUR ATTENTION TO PAGE NO.17 OF THE PAPER BOOK AND ARGUED THAT THERE WAS D EPRECIATION IN THE SECURITIES AT RS.55,07,150/-, HOWEVER, THE ASSESSEE MADE PROVISIONS TO THE EXTENT OF RS.55 LACS IN THE BOOKS OF ACCOUNTS AS PE R THE RBI GUIDELINES. IN SUPPORT OF HIS CONTENTIONS THE LEARNED AR RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF UNITED COMMERCIAL BANK VS CIT, 240 ITR 355 (SC) AND THE DECISION OF THE HONBLE MADRAS HIGH CO URT IN THE CASE OF KARUR VYSYA BANK LTD. 273 ITR 510 (MAD.) WHEREIN SIMILAR ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE. THUS, HE REQUESTED TO ALLOW THE PR OVISIONS MADE FOR DEPRECIATION IN SECURITIES IN THE BOOKS OF ACCOUNT. 5. AT THE OUTSET, THE LEARNED DR OPPOSED THE ARGUME NTS ADVANCED BY THE LEARNED AR AND PLEADED THAT THE CIT(A) HAS SPECIFIC ALLY VERIFIED THE DETAILS OF THE IT A NO.3242/AHD/2010 (AY: 2007-08) SURAT NATIONAL CO-OP. BANK LTD. VS ACIT, CIR-2, SURA T 4 GOVERNMENT SECURITIES AND BONDS AND ON THAT BASIS HE DIRECTED THE AO TO VERIFY THE MARKET PRICE OF VARIOUS SECURITIES AND TO ALLOW DEPRECIATION ON GOVERNMENT SECURITIES. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS ON RECORD AND CAREFULLY CONSIDERED THE PAPER BOOK SUBMITTED B Y THE ASSESSEE. THE CIT(A) SPECIFICALLY MENTIONED THAT THE GOVERNMENT SECURITI ES WHERE MARKET PRICE HAS BEEN SHOWN AT NIL, HOWEVER, LIST SUBMITTED BEFORE U S SHOWS THAT ONLY GSTL BONDS 2009 HAS BEEN SHOWN AT MARKET VALUE AT NIL. THE OTHER BONDS MENTIONED BY THE CIT(A) AT NIL WHICH HAS BEEN SHOWN BY THE AS SESSEE BEFORE US AT LOWER PRICE THAN COST PRICE, BUT NOT AS NIL. THIS ASPECT REQUIRES VERIFICATION WHICH HAS ALREADY BEEN RIGHTLY DIRECTED BY THE CIT(A) TO THE AO. THEREFORE, THE ASSESSEE IS DIRECTED TO SUBMIT THIS LIST BEFORE THE AO AND CALC ULATE THE EXACT DEPRECIATION ON GOVERNMENT SECURITIES ON THE BASIS OF THE RBI GUIDE LINES TO DETERMINE ACTUAL DEPRECIATION ON THE GOVERNMENT SECURITIES. THE AO I S ALSO DIRECTED TO VERIFY SCRIPT-WISE MARKET PRICE AND COST PRICE AND DETERMI NE THE DEPRECIATION ON GOVERNMENT SECURITIES AND ALLOW DEPRECIATION/APPREC IATION AS PER LAW. THIS GROUND OF APPEAL IS ACCORDINGLY ALLOWED FOR STATIST ICAL PURPOSE. 7. GROUND NO.2 OF APPEAL IS AGAINST NOT ALLOWING D EDUCTION OF RS.3,33,088/- IN RESPECT OF AMOUNT SPENT FOR WELFARE OF THE MEMBE RS. THE AO FOUND THAT THE ASSESSEE HAD DEBITED IN THE PROFIT & LOSS ACCOUNT R S.3,33,088/- UNDER THE HEAD MEMBERS WELFARE FUND BEFORE OFFERING THE PROFIT F OR TAXATION. THE ASSESSEE WAS GIVEN REASONABLE OPPORTUNITY OF BEING HEARD WHICH W AS REPLIED BY THE ASSESSEE VIDE LETTER DATED 05-11-2009. THE ASSESSEES REPLY WAS CONSIDERED BY THE AO BUT IT WAS HELD BY THE AO THAT MEMBERS ARE OWNER OF THE BANK AND EXPENDITURE INCURRED ON THE OWNER CANNOT BE ALLOWED AS INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS AS PROVIDED U/S 37 OF THE A CT. THUS, HE MADE ADDITION OF RS.3,33,088/-. BEING AGGRIEVED BY THIS ORDER OF TH E AO, THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) WHO HAS CONFIRMED THE ADDI TION BY OBSERVING AS UNDER:- 7. DECISION: IT A NO.3242/AHD/2010 (AY: 2007-08) SURAT NATIONAL CO-OP. BANK LTD. VS ACIT, CIR-2, SURA T 5 7.1 I HAVE CONSIDERED THE SUBMISSION OF THE APPELLA NT. IN SO FAR AS THE DECISIONS RELIED UPON BY THE APPELLANT ARE CONC ERNED, THE SAME ARE NOT APPLICABLE TO THE FACTS OF THE CASE. THE AB OVE TWO DECISIONS ARE IN RESPECT OF CO-OP. SOCIETIES AND NOT IN C-OP. BANKS, WHICH ARE GOVERNED BY THE RBI GUIDELINES. THE APPELLANT HAS A LSO NOT CONTROVERTED THE FINDING OF THE ASSESSING OFFICER T HAT THE ABOVE DEDUCTION CLAIMED IS NOT FROM THE INCOME OF THIS YE AR, BUT CREATED OUT OF PROFIT OF EARLIER YEARS. THE APPELLANT HAS A LSO NOT EXPLAINED AS TO WHETHER THE ABOVE CLAIM IS AS PER THE RBI GUIDEL INES AND CBDT INSTRUCTION NO.17 OF 2008 DTD. 26.11.2008. I VIEW O F THE ABOVE, I DO NOT FIND ANY JUSTIFICATION FOR ALLOWING THE ABOVE D EDUCTION. THIS GROUND OF APPEAL IS, THEREFORE, DISMISSED. 8. NOW, THE ASSESSEE IS IN APPEAL BEFORE US. THE LE ARNED COUNSEL FOR THE ASSESSEE AGAIN DRAWN OUT ATTENTION TO THE PAPER BOO K AS WELL AS SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND ARGUED THAT T O CREATE INTEREST IN THE MEMBERS BY THE BANK AND KEEP THE RELATION ALIVE BE TWEEN THE ASSESSEE AND THE MEMBERS, THE ASSESSEE HAD TO INCUR CERTAIN EXPENDIT URE. HE FURTHER RELIED ON THE DECISION IN THE CASE OF CIT, GUJ. III VS DASCROI TALUKA CO-OPERATIVE PURCHASE & SALES UNION LTD. REPORTED IN 126 ITR 413 WHEREIN AS SESSEES EXPENDITURE INCURRED ON ACCOUNT OF SILVER JUBILEE AND PURCHASE OF PRESENTATION OF ARTICLES TO THE MEMBERS WERE HELD TO BE INCURRED WHOLLY AND EXC LUSIVELY FOR THE PURPOSE OF ASSESSEES BUSINESS U/S 37OF THE ACT. IN SUPPORT OF HIS CONTENTION, HE HAS ALSO RELIED ON THE DECISION RENDERED BY THE HONBLE GUJA RAT HIGH COURT IN THE CASE OF KARJAN CO-OPERATIVE COTTON SALES JINNING & PRESSING SOCIETY REPORTED IN 199 ITR 17 AND PRAYED THAT ASSESSEES CLAIM MAY BE ALLOWED. 9. AT THE OUTSET, THE LEARNED DR VEHEMENTLY RELIED ON THE ORDER OF THE LEARNED CIT(A). 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS ON RECORD. WE FIND THAT THE NATURE OF THE EXPENDITURE IS WITH RESPECT OF WELFARE OF THE MEMBERS OF THE BANK. THE ASSESSEE HAD TO MAINTAIN G OOD RELATION WITH THE MEMBERS AND THUS, THE ASSESSEE HAD INCURRED THE EXP ENDITURE TOWARDS THE WELFARE OF THE MEMBERS. AS HELD BY THE HONBLE GUJ ARAT HIGH COURT IN THE ABOVE CASES, SUPRA, SUCH TYPE OF EXPENDITURE IS INCURRED FOR THE PURPOSE OF BUSINESS U/S IT A NO.3242/AHD/2010 (AY: 2007-08) SURAT NATIONAL CO-OP. BANK LTD. VS ACIT, CIR-2, SURA T 6 37 OF THE ACT. THUS, WE REVERSE THE ORDER OF THE OR DER OF THE CIT(A) AND DELETE THE ADDITION MADE BY THE AO. THIS GROUND OF APPEAL OF THE ASSESSEE STANDS ALLOWED. 11. THE THIRD GROUND OF THE APPEAL IS AGAINST DISALLOWI NG OF RS.5,20,609/- IN RESPECT OF CONTRIBUTION TO URBAN BANK CREDIT EQUALIZATION FUND AS MANDATED BY SECTION 115G OF THE GUJARAT COOPERATIVE SOCIETIES ACT. THE AO OBSERVED THAT THE ASSESSEE HAD CLAIMED DEDUCTION U/S 37 OF THE ACT FO R RS.5,20,609/- UNDER THE HEAD CONTRIBUTION TO URBAN BANK CREDIT EQUALIZATIO N FUND .THE AO FOUND THAT THESE EXPENSES ARE NOT ALLOWABLE UNDER THE INCOME T AX LAW. THUS, HE GAVE REASONABLE OPPORTUNITY OF BEING HEARD WHICH WAS REP LIED BY THE ASSESSEE VIDE LETTER DATED 05-11-2009 BUT THE ASSESSEES SUBMISSI ON WAS NOT FOUND TO BE CONVINCING TO HIM. HE HELD THE SAME AS IS NOT ALLOW ABLE U/S 37 OF THE IT ACT. THE ABOVE FUND WAS CREATED OUT OF PROFIT FOR THE FINANC IAL YEAR 2006-07 AND THE SAME WAS NOT DEBITED TO THE PROFIT & LOSS ACCOUNT FOR TH E YEAR UNDER CONSIDERATION BUT HAD BEEN CREATED AS PART OF DISTRIBUTION OF NET PRO FIT. IF IT WAS MANDATORY IN NATURE AND GENUINE BUSINESS EXPENDITURE, IT SHOULD HAVE BE EN DEBITED TO THE PROFIT & LOSS ACCOUNT. AS PER THE BYE-LAWS OF THE ASSESSEE B ANK, CERTAIN FUNDS ARE TO BE CREATED OUT OF PROFITS AND HENCE SUCH FUNDS CREATED CANNOT BE ALLOWED AS BUSINESS EXPENDITURE. BEING AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) WHO HAS CONFIR MED THE ADDITION BY OBSERVING AS UNDER: 9. DECISION : 9.1 I HAVE DULY CONSIDERED THE SUBMISSION OF THE AP PELLANT. HOWEVER, THE APPELLANT HAS NOT CONTROVERTED THE FIN DING OF THE ASSESSING OFFICER THAT SINCE THE AMOUNT OF THE ABOV E FUND IS NOT DEBITED IN THE P & L A/C. FOR THE YEAR UNDER CONSID ERATION, THE SAME IS NOT ALLOWABLE. THE APPELLANT HAS NOT CONTROVERTE D THE FINDING GIVEN BY THE ASSESSING OFFICER IN THE ORDER IN THIS REGARD AND HAS ALSO NOT EXPLAINED AS TO WHETHER THE ABOVE CLAIM IS AS PER RBI GUIDELINES AND CBDT INSTRUCTION NO.17 OF 20098 DT.2 6.11.2008. I, THEREFORE, UPHOLD THE ABOVE FINDING OF THE ASSESSIN G OFFICER AND DISMISS THIS GROUND OF APPEAL OF THE APPELLANT. IT A NO.3242/AHD/2010 (AY: 2007-08) SURAT NATIONAL CO-OP. BANK LTD. VS ACIT, CIR-2, SURA T 7 12. NOW, THE ASSESSEE IS IN APPEAL BEFORE US. THE L EARNED COUNSEL FOR THE ASSESSEE CONTENDED THAT THESE FUNDS WERE CREATED AS PER THE PROVISIONS OF SECTION 115G OF THE GUJARAT CO-OPERATIVE SOCIETIES ACT. HE HAS DRAWN OUR ATTENTION TO PAPER BOOK PAGE 23. AS PER THIS PROVIS ION, THE BANK IS TO MAKE PROVISION @15% OF ITS PROFITS AND PAY THE SAME TO T HE STATE CO-OPERATIVE BANK FOR THE PURPOSE OF CREDITING IT INTO THE URBAN BANK CREDIT EQUALIZATION FUND. THUS, IT WAS SUBMITTED THAT AS PER THE CO-OPERATIVE SOCIETIES ACT THE ASSESSEE HAD TO MAKE COMPLIANCE. THUS, HE REQUESTED TO DELET E THE ADDITION. 13. AT THE OUTSET, THE LEARNED DR VEHEMENTLY RELIED UPON THE ORDER OF THE LEARNED CIT(A) AND PRAYED TO CONFIRM THE ORDER OF T HE LEARNED CIT(A). 14. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS ON RECORD. WE FIND THAT THIS FUND WAS CREATED ON THE BASIS OF CO-OPERATIVE SOCIETIES ACT AS THE ASSESSEE IS ALSO A CO-OPERATIVE BANK AND HAS TO FOLLOW THE SAME AS PER SECTION 115G OF THE SAID ACT ACCORDING TO WHICH THI S FUND HAS TO BE CREATED AND THE ASSESSEE HAS RIGHTLY CLAIMED THE DEDUCTION. THU S, WE REVERSE THE ORDER OF THE CIT(A). ACCORDINGLY, THIS GROUND OF APPEAL OF T HE ASSESSEE STANDS ALLOWED. 15. THE FOURTH GROUND OF APPEAL IS AGAINST CONFIRMI NG DISALLOWANCE OF PAYMENT OF EDUCATION FUND OF RS.3,00,000/- AS PER MANDATORY PROVISIONS OF SECTION 69 OF THE GUJARAT CO-OPERATIVE SOCIETIES ACT. HOWEVER, SI NCE THE ASSESSEE DID NOT DEBITED THIS AMOUNT IN THE PROFIT & LOSS ACCOUNT, T HE LEARNED AO ADDED THE SAME TO THE INCOME OF THE ASSESSEE AND THE CIT(A) UPHELD THE ORDER OF THE AO AND DISMISSED THIS GROUND HOLDING THAT SINCE EXPENSES W ERE NOT DEBITED BY THE ASSESSEE IN ITS PROFIT & LOSS ACCOUNT AS BUSINESS E XPENDITURE, THE SAME CANNOT BE ALLOWED. 16. AT THE TIME OF HEARING BEFORE US, THE LEARNED A R REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND D RAWING OUR ATTENTION TO PAPER BOOK PAGE 45 AND 49, RELIED ON THE DECISIONS RENDERED BY THE HONBLE GUJARAT HIGH COURT IN THE CASE OF (I) MAHESANA DIST RICT CO-OPERATIVE MILK IT A NO.3242/AHD/2010 (AY: 2007-08) SURAT NATIONAL CO-OP. BANK LTD. VS ACIT, CIR-2, SURA T 8 PRODUCERS UNION LTD. VS CIT, 258 ITR 780 (GUJ.) AND (II) CIT VS KAIRA DISTRICT CO-OPERATIVE MILK PRODUCERS UNION LTD., 209 ITR 89 8 (GUJ) WHEREIN THE HONBLE HIGH COURT ON SIMILAR FACTS DECIDED THE IDENTICAL I SSUES IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE AND PLEADED THAT THE CLAIM OF THE ASSESSEE MAY BE ALLOWED. THE LEARNED DR COULD NOT CONTROVERT THE SU BMISSION OF THE LEARNED COUNSEL FOR THE ASSESSEE. SINCE WE HAVE DECIDED ID ENTICAL ISSUE IN GROUND NO.3 OF THE APPEAL HEREIN ABOVE IN PARA 13 OF THIS ORDER IN FAVOUR OF THE ASSESSEE, CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE CASE LAWS CITED BY THE LEARNED COUNSEL FOR THE ASSESSEE, THERE RAISE N O QUESTION NOT TO FOLLOW THE SAME. ACCORDINGLY, WE HEREBY REVERSE THE ORDER OF T HE CIT(A) ON THIS ISSUE AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE IN ITS F AVOUR. 17. THE FIFTH GROUND OF APPEAL RELATING TO LEVY OF SURCHARGE AND INTEREST U/S 234B OF THE ACT BEING CONSEQUENTIAL, WE HEREBY DIRE CT THE AO TO TAKE DECISION IN ACCORDANCE WITH LAW. 18. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 23-08-2013 SD/- SD/- (D. K. TYAGI) JUDICIAL MEMBER (T. R. MEENA) ACCOUNTANT MEMBER LAKSHMIKANT LAKSHMIKANT LAKSHMIKANT LAKSHMIKANTA AA A DEKA/ DEKA/ DEKA/ DEKA/- -- - COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD IT A NO.3242/AHD/2010 (AY: 2007-08) SURAT NATIONAL CO-OP. BANK LTD. VS ACIT, CIR-2, SURA T 9 1. DATE OF DICTATION: 22-08-13 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 23-08-13 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: