The Ode Nagrik Co. Op. Credit Society Ltd., Anand V. The Income Tax Officer, Ward-2, Anand

ITA 374/AHD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7875 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 13-02-2017
• 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. 373 AND 374/AHD/2017 / ASSESSMENT YEAR: 2012-13 AND 2013-14 THE ODE NAGRIK CO-OP. CREDIT SOCIETY LTD. OPP: BHADRAKALI MANDIR AT. ODE DIST. ANAND 380 001. PAN : AAATT 4181 D VS ITO, WARD-2 ANAND. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI MUKUND BAKSHI, AR REVENUE BY : SHIR R.P. MAURIYA, SR.DR / DATE OF HEARING : 16/07/2018 /DATE OF PRONOUNCEMENT : 16/07/2018 O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER : PRESENT TWO APPEALS ARE DIRECTED AT THE INSTANCE OF THE ASSESSEE AGAINST OR DERS OF LD.CIT(A)-4, VADODARA DATED 14.10.2016 AND 29.9.2016 PASSED FOR THE ASSESSMENT YEAR 2012-13 AND 2013-14 BY WHICH ASSESSEE HAS CHALLENGE D NON-ALLOWANCE OF DEDUCTION AND UNDER SECTION 80P(2)(A)(I) OF THE INC OME TAX ACT, 1961. 2. AT THE OUTSET, THE LD.DR SUBMITTED THAT ISSUE IN BOTH THE APPEALS IS COVERED IN FAVOUR OF THE REVENUE BY THE JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF STATE BANK OF INDIA CO-OPERATIVE SOCIETY VS. CIT, 72 TAXMANN.COM 64 (GUJ) WHEREIN IT HAS BEEN HELD THAT ITA NO.373 AND 374 /AHD/2017 - 2 - COOPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF PROV IDING CREDIT FACILITIES TO ITS MEMBERS WHICH EARNS INTEREST INCOME ON THE S URPLUS FUNDS PARKED WITH THE NATIONALISED BANKS, IS NOT ELIGIBLE FOR DE DUCTION UNDER SECTION 80P OF THE ACT. SINCE IMPUGNED ORDERS OF REVENUE A UTHORITIES ARE IN TERMS OF JUDGMENT OF THE HONBLE HIGH COURT CITED S UPRA, NO INTERFERENCE THEREOF IS REQUIRED AND THE APPEALS OF THE ASSESSEE MAY BE DISMISSED. HOWEVER, THE LD.COUNSEL FOR THE ASSESSE E DOES NOT CONTEST JUDGMENT OF HONBLE GUJARAT HIGH COURT, BUT SUBMITT ED THAT IN CASE CLAIM OF THE ASSESSEE IS NOT FOUND TO BE ADMISSIBLE , THEN PROPORTIONATE ADMINISTRATIVE AND FINANCIAL EXPENSES INCURRED FOR EARNING SUCH INTEREST/INVESTMENT INCOME BE ALLOWED TO THE ASSESS EE. 3. HAVING HEARD BOTH THE PARTIES AND ON PERUSAL OF THE RECORD, WE FIND THAT ASSESSEE IS A COOPERATIVE SOCIETY REGISTE RED UNDER GUJARAT CO- OPERATIVE SOCIETIES ACT, 1961 AND ENGAGED IN PROVID ING CREDIT FACILITIES TO ITS MEMBERS. IN THE RETURN OF INCOME, THE ASSESSEE HAS SHOWN MISC. INCOME AND INTEREST INCOME EARNED ON INVESTMENT IN THE FORM OF SHORT TERM DEPOSITS WITH BANKS AND CLAIMED THE SAME AS DE DUCTION UNDER SECTION 80P(2)(A)(I) OF THE INCOME TAX ACT FOR BOTH ASSESSMENT YEARS. THIS CLAIM WAS DENIED BY THE AO ON THE GROUND THAT PROVI SIONS OF SECTION 80P(2) DOES NOT COVER ASSESSEE-SOCIETY. THE LD.CIT( A) CONCURRED WITH THE ORDER OF THE AO BY RELYING UPON THE JUDGMENT OF HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF STATE BANK OF INDIA CO-OP ERATIVE SOCIETY (SUPRA). WE FIND THAT HONBLE JURISDICTIONAL HIGH COURT HAS HELD THAT INTEREST EARNED FROM INVESTMENT MADE IN NATIONALIZE D BANK BY A COOPERATIVE SOCIETY ENGAGED IN PROVIDING CREDIT FAC ILITIES TO ITS MEMBERS, IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80P. T HE TRIBUNAL IN EARLIER OCCASIONS HAS TAKEN A CONSISTENT ON SIMILAR ISSUE B Y FOLLOWING ABOVE ITA NO.373 AND 374 /AHD/2017 - 3 - JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT. SINCE ORDERS OF THE REVENUE AUTHORITIES ARE IN ACCORDANCE WITH THE JUDG MENT OF THE HONBLE JURISDICTIONAL HIGH COURT CITED SUPRA, NO INTERFERE IS CALLED FOR IN THE IMPUGNED ORDERS, WHICH WE CONFIRM. HOWEVER, ANY EXP ENDITURE 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. 4. IN THE RESULT, APPEALS OF THE ASSESSEE ARE PARTL Y ALLOWED FOR STATISTICAL PURPOSE. PRONOUNCED IN THE OPEN COURT ON 16 TH JULY, 2018. SD/- SD/- (PRADIP KUMAR KEDIA) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER