I.T.O., Ward - 2(4), Burdwan, Burdwan V. The Kalna Town Credit Co-Operative Bank Ltd., Burdwan

ITA 380/KOL/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78302 (ITAT-KOLKATA)
• Duration Of Justice: 4 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-05-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 25-08-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 19-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D J MEHTA JCIT SRDR
• Keywords: Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO. 380 / KOL / 2010 ASSESSMENT YEAR :2006-07 INCOME TAX OFFICER WARD-2[4], BURDWAN AAYAKAR BHAWAN (ANNEXE), 2 ND FLOOR, COURT OMPOUND, BURDWAN V/S . THE KALNA TOWN CREDIT CO-OERATIVE BANK LTD., BANK BAZAR KALNA BURDWAN 713409 [ PAN NO.AACCT 1933 G ] / APPELLANT .. / RESPONDENT) /BY APPELLANT SHRI D.J.MEHTA, JCIT, SR-DR /BY RESPONDENT SHRI SOUMITRA CHOUDHURY, AR /DATE OF HEARING 08-05-2014 /DATE OF PRONOUNCEMENT 08-05-2014 / // / O R D E R PER SHAMIM YAHYA, ACCOUNTANT MEMBER:- THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)- ASANSOL DATED 12-11-2009 AND PERTAINS TO ASSESSMENT YEAR 2006-07. 2. AT THE OUTSET, WE NOTE THAT THERE IS A DELAY OF THREE DAYS BY THE REVENUE IN FILING THE APPEAL. LD. COUNSEL FOR THE A SSESSEE DID NOT HAVE ANY OBJECTION IN CONDONATION OF DELAY IN THIS REGARD. A CCORDINGLY, WE CONDONE THE DELAY. ITA NO.380/KOL/2010 A.Y. 200 6-07 ITO WD-2[4] BWN V. THE KALNA TOWN CO-OP. BANK LT D. PAGE 2 3. GROUNDS OF APPEAL READ AS UNDER:- 1. THAT WHETHER THE L. CIT(A) IS JUST IN DECIDING GROUND NO.1 IN ASSESSEES FAVOUR BY ALLOWING EXEMPTION U/S 80P REL YING UPON THE ITAT DECISION IN THE ORDER FOR ITA NOS. 2395, 2396 & 2397 DATED 31/01/2008 THAT RELIED UPON ANOTHER ITAT ORDER IN ITA NO. 1094 /KOL/2007 IN THE CASE OF PASCHIM BANGA GRAMIN BANK WHICH, IN THE FAC TS AND CIRCUMSTANCES OF THE INSTANT CASE, IS NOT SQUARELY APPLICABLE; 2. THAT WHETHER THE LD. CIT(A) IS JUST IN ALLOWING THE ASSESSEES GROUND NO.2 TREATING THAT LENDING MONEY TO ONES OWN EMPLO YEES WOULD COME UNDER THE DEFINITION OF BANKING BUSINESS WITHOUT CO NSIDERING THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF M/S. SIROHI S B V BANK LTD., VS. CIT DT. 24/09/2008; AND 3. THAT WHETHER THE LD. CIT(A) IS JUST IN ALLOWING THE ASSESSEES GROUND NO.3 TREATING THE INTEREST EARNED ON INVESTMENT OF THE PF DEPOSITS GATHERED FROM THE CONTRIBUTIONS OF THE EMPLOYEES TO BE IN THE NORMAL COURSE OF BUSINESS ON BANKING WITHOUT CONSIDERING T HE FACT THAT THE PROVIDENT FUND IS AN UNRECOGNIZED ONE AND ALSO WITH OUT CONSIDERING THE DECISION OF THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF M/S. SIROHI S B.V. BANK LD.VS. CIT DT. 24/09/2008. 4. THE FIRST ISSUE IN THIS CASE, PERTAINS TO THE RE VENUES GRIEVANCE AGAINST THE LD. CIT(A) DELETING THE DISALLOWANCE OF DEDUCTI ON U/S 80P OF THE ACT IN RESPECT OF RECEIPT OF INTEREST ON NON-SLR FUNDS. 5. ON THIS ISSUE, WE NOTE THAT IT IS THE SUBMISSION OF THE LD. COUNSEL OF THE ASSESSEE THAT ISSUE IS SQUARELY COVERED IN FAVOUR O F THE ASSESSEE BY THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE AN D OTHER DECISIONS OF THE TRIBUNAL IN IDENTICAL CIRCUMSTANCES. WE NOTE THAT T HE ITAT IN ASSESSEES OWN CASE IN ITA NO. 2395, 2396 AND 2397/KOL/2007 DATED 31-08-2008 HAS RELIED UPON THE DECISION IN ITA NO.1094/KOL/2007 IN THE CASE OF PASCHIM BANGA GRAMIN BANK AND DECIDED THE ISSUE IN FAVOUR OF ASSESSEE . SINCE NO CONTRARY DECISION IN THIS REGARD, WAS SHOWN TO US RESPECTFUL LY FOLLOWING THE DECISION IN ASSESSEES OWN CASE, WE UPHOLD THE ORDER OF LD. CIT (A). ITA NO.380/KOL/2010 A.Y. 200 6-07 ITO WD-2[4] BWN V. THE KALNA TOWN CO-OP. BANK LT D. PAGE 3 6. NEXT ISSUE IS PERTAINS TO INTEREST INCOME ARISIN G OUT OF HOUSING LOAN GIVEN TO EMPLOYEES AND INTEREST EARNED ON INVESTMEN T OF PF DEPOSITS. 7. ABOVE ISSUES WERE DECIDED BY THE LD. CIT(A) IN F AVOUR OF ASSESSEE BY HOLDING THAT THESE ACTIVITIES WOULD COME UNDER THE DEFINITION OF BANKING BUSINESS. NOW THE REVENUE HAS AGITATED THAT LD. CIT (A) HAS NOT CONSIDERED THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT V. M/S. SIROHII S.B.V. BANK LTD. BY THE ORDER DATED 24-09-2008. IN THIS CASE IT WAS HELD THAT THE LOAN GIVEN TO THE EMPLOYEE WAS NOT IN THE CAPAC ITY OF THE BANKER BUT WAS IN THE CAPACITY OF BEING AN EMPLOYER WITH ITS EMPLO YEES. IT WAS HELD THAT THE STAFF CANNOT BE SAID TO BE THE MEMBER, AS SUCH AND THEREFORE THE INTEREST ON LOAN GIVEN TO THE STAFF, CANNOT BE SAID TO BE RELAT ABLE BANKING BUSINESS. 8. PAR CONTRA, LD. COUNSEL FOR THE ASSESSEE CLAIMED THAT SIMILAR ISSUE WAS DECIDED BY THE TRIBUNAL IN FAVOUR OF ASSESSEE VIDE ORDER IN THE CASE OF ACIT V. H.P. STATE CO-OPERATIVE AGRICULTURE & RURAL DEVELOP MENT BANK LTD., (2006) 100 ITD 479 (CHD). IN THIS CASE, THE TRIBUNAL HAD F OLLOWED THE ORDER OF HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE O F CIT V. HARYANA STATE CO-OPERATIVE LAND DEVELOPMENT BANK LTD. (2012) 254 ITR 107. IN THIS CASE, IT WAS HELD THAT INTEREST EARNED FROM EMPLOYEES HAD AR ISEN FROM BUSINESS OF BUNKING AND NO DISTINCTION COULD BE MADE BETWEEN GI VING OF LOAN TO THE STAFF MEMBERS AND ADVANCING LOAN TO THE BORROWERS. 9. ON THIS PREMISE, LD. COUNSEL FOR THE ASSESSEE AR GUED THAT THERE IS NO DECISION OF THE JURISDICTIONAL HIGH COURT ON THIS I SSUE. SINCE THERE ARE DECISIONS BOTH IN FAVOUR OF ASSESSEE AS WELL AS THA T OF REVENUE. LD. COUNSEL FOR THE ASSESSEE PLEADED THAT EXPOSITION FROM HONBL E APEX COURT DECISION IN THE CASE OF CIT V. VEGETABLE PRODUCTS LTD. 88 ITR 192 (SC) SHOULD BE FOLLOWED. IN THIS CASE HONBLE APEX COURT HAS EXPOU NDED THAT WHEN THERE ARE TWO CONSTRUCTIONS POSSIBLE ONE IN FAVOUR OF ASSESSE E SHOULD BE FOLLOWED. NOW, SINCE WE FIND THAT IN IDENTICAL CIRCUMSTANCES, THIS ISSUE HAS BEEN ITA NO.380/KOL/2010 A.Y. 200 6-07 ITO WD-2[4] BWN V. THE KALNA TOWN CO-OP. BANK LT D. PAGE 4 DECIDED IN FAVOUR OF ASSESSEE, WE HOLD THAT FOLLOWI NG THE PRECEDENT AS ABOVE THERE IS NO INFIRMITY IN THE ORDER OF LD. CIT(A). A CCORDINGLY, WE DECIDE THIS ISSUE IN FAVOUR OF ASSESSEE. 10. IN THE RESULT, THIS APPEAL FILED BY REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT 08 /05/2014 SD/- SD/- (MAHAVIR SINGH) (SHAMIM YAHYA) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 08/05/2014 - - - - .- .- .- .- / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT ITO, WARD-2[4], BURDWAN, BURWAN AAYAKA R BHAWAN, 2 ND FLOOR, COURT OMPOUND, BURDWAN 2. / RESPONDENT THE KALNA TOWN CREDIT CO-OPERATIVE BA NK, BANK BAZAR KALNA, BURDWAN - 713409 3. 3 / CONCERNED CIT 4. 3- / CIT (A) 5. - , , / DR, ITAT, KOLKATA 6. 9 / GUARD FILE. BY ORDER/ , /TRUE COPY/ / ,