The Bhagyodaya Co-op Credit Society Ltd, Belgaum V. Income Tax Officer Ward-1 (2), Belgaum

ITA 33/PAN/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93475 (ITAT-PANAJI)
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-06-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 23-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NISHANT K

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI GEORGE MATHAN , HONBLE JUDICIAL MEMBER AND SHRI N.K. BILLAIYA , HONBLE ACCOUNTANT MEMBER ITA NO. 33 /PNJ/2014 (ASST. YEAR : 200 9 - 1 0 ) THE BHAGYODAYA COOPERATIVE CREDIT SOCIETY LTD. , BALAJI BUILDING, MAHADEV ROAD , KANGRALI KHURD, BELGAUM . VS. ITO , WARD - 1(2), BELGAUM PAN NO. AAAAT 4822 G (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI PRAMOD Y. V A IDYA ADV. DEPARTMENT BY : SHRI NISHANT K. - D.R. DATE OF HEARING : 15 / 0 6 /2015 . DATE OF PRONOUNCEMENT : 15 / 0 6 /201 5 . O R D E R PER N.K. BILLAIYA THIS IS AN APPEAL BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF L D. CIT (A), BELGAUM DATED 2 0 / 11 /201 3 PERTAINING TO A.Y. 2009 - 10 . 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN DISALLOWING THE DEDUCTION CLAIMED U/S. 80P(2)(A)(I) OF THE ACT. 2 ITA NO. 33 /PNJ/2014 3. THE ASSESSEE IS A C OOPERATIVE S OCIETY REGISTERED UNDER THE KARNATAKA STATE COOPERATIVE SOCIETIES ACT. THE MAIN OBJECT OF THE SOCIETY IS TO ACCEPT THE DEPOSITS AND TO PROVIDE FINANCIAL ACCOMMODATION TO THE MEMBERS OF THE SOCIETY . IT WAS , THEREFORE , CLAIMED THAT THE SOCIETY IS ENTITLED TO DEDUCTION U/S. 80P(2) OF THE ACT. THE ASSESSING OFFICER PROCEEDED BY APPLYING THE PROVISIONS OF SECTION 2(24)(VIIA) OF THE ACT AND DISALLOWED THE CLAIM OF DEDUCTION U/S. 80P(2) OF THE ACT. AGGRIEVED BY THIS, ASSESSEE CARRIED THE M ATTER BEFORE THE LD. CIT(A) , BUT WITHOUT ANY SUCCESS. 4 . BEFORE US , COUNSEL FOR THE ASSESSEE DREW OU R ATTENTION TO THE DECISION OF THE TRIBUNAL PANAJI BENCH IN ASSESSEES OWN CASE FOR A.Y. 2010 - 11. COUNSEL ALSO RELIED UPON THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. BILLURU GURUBASAVA PATTINAS SAHAKARI SANGHA NIYAMAT IN ITA NO. 50006/2013 . 5. LEARNED DR SUPPORTED THE ASSESSMENT ORDER. 6. WE HAVE CAREFULLY PERUSED THE ORDERS OF THE AUTHORITIES BELOW AND JUDICIAL DECISIONS BROUGHT TO OUR NOTICE. IN OUR CONSIDERED OPINION, THE ASSESSEE IS NOT A COOPERATIVE BANK . THERE IS NO FINDING THAT THE 3 ITA NO. 33 /PNJ/2014 ASSESSEE HAS OBTAINED ANY BANKING LICENCE. THE BUSINESS OF THE ASSESSEE IS TO PROVIDE CREDIT FACILITIES TO ITS MEMBERS. SINCE , THERE IS NO FI ND ING THAT THE ASSESSEE CAN CARRY OUT ANY BANKING BUSINESS, CLEARLY ESTABLISHES THAT IT IS NOT A COOPERATIVE BANK. SEC. 80P OF THE ACT DEALS WITH THE DEDUCTION OF INCOME OF THE SOCIETY . IN CASE OF ANY ASSESSEE BEING A COOPERATIVE SOCIETY, THE WHOLE OF THE AMOUNT OF PROFITS AND GAINS OF BUSINESS ATTRIBUTABLE TO ANY OTHER ACTIVITIES REFERRED TO SUB - SEC. (2) OF SEC. 80P , SHALL BE DEDUCTED IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE. IT IS A BENEFIT GIVEN TO THE COOPERATIVE SOCIETY. SEC. 80P(4) WAS INTRODUCED BY THE FINANCE ACT 2006 W.E.F. 01/04/2007 EXCLUDING THE SAID BENEFIT TO A COOPERATIVE BANK. THUS, THE INTENTION OF THE LEGISLAT URE IS CLEAR IF A COOPERATIVE BANK IS EXCLUSIVELY CARRYING ON BANKING BUSINESS , THEN INCOME DERIVED FROM THE SAID BUSINESS CANNOT BE DEDUCT ED IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE , AS THE ASSESSEE IS NOT A COOPERATIVE BANK CARRYING ON EXCLUSIVELY BANKING BUSINESS AND THERE IS NO FINDING THAT IT POSSESS A LICE NCE FROM RBI TO CARRYON BUSINESS. IT IS NOT A COOPERATIVE BANK, IT IS A COOPERATIVE SOCIETY WHICH ALSO CARRIES ON BUSINESS OF LENDING MONEY TO ITS M E MB E RS WHICH IS COVERED U/S. 80P(2)(A )( I) . FOR THIS PROPOSITION, WE DRAW SUPPORT FROM THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF BILLURU GURUBASAVA PATTINAS SAHAKARI SANGHA 4 ITA NO. 33 /PNJ/2014 NIYAMAT (SUPRA) , WE ACCORDINGLY, SET ASIDE THE FINDINGS OF THE LD. CIT(A) AND DIRECT THE ASSESSING OFFICER TO ALLOW DEDUCTION U/S. 80P(2) OF THE ACT AS CLAIMED B Y THE ASSESSEE. 7. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS, ACCORDINGLY, ALLOWED. ( ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JUNE , 201 5 ). S D / - S D / - ( GEORGE MATHAN ) ( N.K. BILLA I YA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 1 5 T H JUNE , 201 5 . VR/ - COPY TO: 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE LD. CIT 4 . THE CIT(A) 5 . THE D.R 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI 5 ITA NO. 33 /PNJ/2014 DATE INITIAL ORIGINAL DICTATION PAD IS ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 1 5 .06.2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 1 5 .06.2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 1 6 /06/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 1 6 /06/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 1 6 /06/2015 SR.PS 6. DATE OF PRONOUNCEMENT 1 6 /06/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 1 6 /06/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER