Sardar Co. Op. Credit Society Ltd., Anand V. The Income Tax Officer, Ward-1(3)(1), Petlad

ITA 3417/AHD/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7848 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-07-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 19-12-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SHIR R P MAURIYA

Judgement Text

, - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER ./ ITA NO. 3417/AHD/2016 / ASSESSMENT YEAR: 2012-13 SARDAR PATEL COOP. CREDIT SOCIETY LTD. CHORA SHOPPING CENTRE NR.SARDAR TOWER, KHAMBHAT DIST. ANAND 388620. PAN : AAAAS 2227 G VS ITO, WARD-1(3)(1) PETLAD. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHIR R.P. MAURIYA, SR.DR / DATE OF HEARING : 17/07/2018 /DATE OF PRONOUNCEMENT : 17 /07/2018 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)-5, VADODARA DATED 22.8.2016 PASSED FOR THE ASSESSMENT YEAR 2012-13 BY WHICH ASSESSEE HAS CHALLENGED NON-ALLOWANCE OF DEDU CTION OF RS.2,77,819/- UNDER SECTION 80P(2)(A)(I) OF THE INC OME TAX ACT, 1961. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE. THEREF ORE, WE PROCEED TO DECIDE THE APPEAL AFTER HEARING LD.DR AND CONSID ERING THE MATERIAL AVAILABLE ON RECORD. ITA NO.3417 /AHD/2016 - 2 - 3. AT THE OUTSET, THE LD.DR SUBMITTED THAT ISSUE RA ISED IN THE APPEAL OF THE ASSESSEE IS COVERED IN FAVOUR OF THE REVENUE BY THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE O F STATE BANK OF INDIA CO-OPERATIVE SOCIETY VS. CIT, 72 TAXMANN.COM 64 (GU J) WHEREIN IT HAS BEEN HELD THAT COOPERATIVE SOCIETY ENGAGED IN THE B USINESS OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS WHICH EARNS INTERE ST INCOME ON THE SURPLUS FUNDS PARKED WITH THE NATIONALISED BANKS, I S NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80P OF THE ACT. SINCE IMPU GNED ORDERS OF REVENUE AUTHORITIES ARE IN TERMS OF JUDGMENT OF THE HONBLE HIGH COURT CITED SUPRA, NO INTERFERENCE THEREOF IS REQUIRED AN D THE APPEALS OF THE ASSESSEE MAY BE DISMISSED. 4. HAVING HEARD THE LD.DR AND ON PERUSAL OF THE REC ORD, WE FIND MERIT IN THE SUBMISSIONS OF THE LD.DR. THAT ASSESS EE IS A COOPERATIVE SOCIETY REGISTERED UNDER GUJARAT CO-OPERATIVE SOCIE TIES ACT, 1961 AND ENGAGED IN PROVIDING CREDIT FACILITIES TO ITS MEMBE RS. IN THE RETURN OF INCOME, THE ASSESSEE HAS SHOWN INTEREST INCOME EARN ED ON INVESTMENT IN THE FORM OF SHORT TERM DEPOSITS WITH BANKS AND CLAI MED THE SAME AS DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE INCOME TAX ACT. THIS CLAIM WAS DENIED BY THE AO ON THE GROUND THAT SINCE INCOM E WAS NOT DERIVED BY THE ASSESSEE FROM ITS ACTIVITY OF PROVIDING CRED IT FACILITIES TO THE ASSESSEE, PROVISIONS OF SECTION 80P(2) DOES NOT COV ER ASSESSEE-SOCIETY. THE LD.CIT(A) CONCURRED WITH THE ORDER OF THE AO BY RELYING UPON THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF STATE BANK OF INDIA CO-OPERATIVE SOCIETY (SUPRA). WE FIND THA T HONBLE JURISDICTIONAL HIGH COURT HAS HELD THAT INTEREST EA RNED FROM INVESTMENT MADE IN NATIONALIZED BANK BY A COOPERATIVE SOCIETY ENGAGED IN PROVIDING CREDIT FACILITIES TO ITS MEMBERS, IS NOT ELIGIBLE FOR DEDUCTION ITA NO.3417 /AHD/2016 - 3 - UNDER SECTION 80P. THE TRIBUNAL ON EARLIER OCCASIO NS HAS TAKEN A CONSISTENT ON THE ISSUE OF GRANTING DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT TO THE COOPERATIVE CREDIT SOCIETY BY FOL LOWING ABOVE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT. SINCE ORD ER OF THE REVENUE AUTHORITIES IS IN ACCORDANCE WITH THE JUDGMENT OF T HE HONBLE JURISDICTIONAL HIGH COURT CITED SUPRA, NO INTERFERE IS CALLED FOR IN THE IMPUGNED ORDER, WHICH WE CONFIRM. HOWEVER, ANY EXPE NDITURE INCURRED BY THE ASSESSEE FOR EARNING SUCH INCOME BE ALLOWED TO THE ASSESSEE, IF NOT ALREADY ALLOWED. IN OTHER WORDS, THE LD.AO HAS TO DETERMINE THE NET INTEREST INCOME AS WELL AS MISC. INCOME EARNED BY THE ASSESSEE, AND ONLY THEREAFTER THAT INCOME HAS TO BE EXCLUDED FROM THE ADMISSIBILITY OF DEDUCTION UNDER SECTION 80P OF THE ACT. 5. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED FOR STATISTICAL PURPOSE. PRONOUNCED IN THE OPEN COURT ON 17 TH JULY, 2018. SD/- SD/- (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER