ACIT, Bulandshahr V. M/s Zila Sahkari Bank Ltd., Bulandshahr

ITA 3913/DEL/2016

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0741 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 04-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B S RAJPUROHIT
• Assessee Lawyers: P S KASHYAP
• Section: 10

Judgement Text

1 ITA NO. 3913/DEL/2016 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: G NEW DELHI BEFORE SHRI R. K. PANDA, ACCOUNTANT MEM BER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER ITA NO. 3913/DEL/2016 ( A.Y 2012-13) ACIT CIRCLE, INCOME TAX OFFICE, OPP. TEACHERS COLONY BULANDSHAHAR (APPELLANT) VS ZILA SAHKARI BANK LTD. MOTI BAGH BULANDSHAHAR AAAAZ0005B (RESPONDENT) APPELLANT BY SH. B. S. RAJPUROHIT, SR DR RESPONDENT BY SH. P. S. KASHYAP, CA ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORD ER DATED 17/04/2016 PASSED BY CIT(A)-GHAZIABAD, ASSESSMENT YEAR 2012-13 . 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON FACTS IN NOT SECTION 80P OF THE ACT, WHICH WAS AMENDED BY THE FINANCE ACT, 2006 WIT H EFFECT FROM 01.04.2007 INTRODUCING SUBSECTION(4) WHICH LAID DOW N SPECIFICALLY THAT THE PROVISIONS OF SECTION 80P OF THE ACT WILL NOT APPLY TO ANY CO-OPERATIVE BANK AND ACCORDINGLY DEDUCTION UNDER SECTION 80P WAS NO MORE AVAILABLE TO ANY REGIONAL RURAL BANK (RRB) FROM A.Y. 2007-08. 2. LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON FACTS I N DELETING THE ADDITION OF DATE OF HEARING 06.09.2018 DATE OF PRONOUNCEMENT 18.09.2018 2 ITA NO. 3913/DEL/2016 RS. 1.82.02.860/- IN VIEW OF THE OM DATED 25.08.200 6 ADDRESSED TO RBI CLARIFYING THAT REGIONAL RURAL BANKS WOULD NOT BE E LIGIBLE FOR DEDUCTION U/S 80P OF THE ACT FROM A.Y. 2007-08. 3. LD. CIT (A) HAS ERRED IN LAW AS WELL AS ON FACTS I N DELETING THE ADDITION OF RS. 1.82.02.860/- IN VIEW OF THE CIRCULAR NO.6/2010 DAT:EC1 20.09.2010 WHICH CLARIFIED THAT CIRCULAR NO. 319 DATED 11.01.1982 DE EMING ANY REGIONAL RURAL BANK TO BE CO-OPERATIVE SOCIETY STANDS WITHDRAWN AN D RRBS ARE NOT ELIGIBLE FOR DEDUCTION U/S 80P OF THE ACT FROM A.Y. 2007-08. 4. THEREFORE THE ORDER OF LD. CIT (A) BE SET ASIDE AN D THE ORDER OF THE AO BE RESTORED. 3. THE ASSESSEE IS A COOPERATIVE SOCIETY DERIVES I NCOME FROM BANKING ACTIVITY AND HOUSE PROPERTY. RETURN DECLARING INCOME OF RS. 3,50,53,910/- WAS E-FILED ON 27.09.2012. DURING THE COURSE OF ASSESSMENT PROC EEDINGS, IT WAS OBSERVED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD CRED ITED THE AMOUNT OF RS. 1,82,02,860/- ON ACCOUNT OF DIVIDEND UNDER THE HEAD GROSS RECEIPTS WHICH HAD BEEN CLAIMED EXEMPT IN THE COMPUTATION OF INCOME. I T WAS ALSO OBSERVED BY THE ASSESSING OFFICER THAT THE IFFCO FROM WHOM DIVIDEND WAS RECEIVED WAS NOT A COMPANY BUT WAS A COOPERATIVE SOCIETY AND DIVIDEND DISTRIBUTION TAX HAD NOT BEEN DEDUCTED BY IFFCO. IT WAS HELD BY THE ASSESSIN G OFFICER THAT THE DIVIDEND INCOME WAS NOT EXEMPT IN THE HANDS OF THE ASSESSEE. THUS, THE AMOUNT OF RS.1,82,02,860/- WAS DISALLOWED AND ADDED TO THE IN COME OF THE ASSESSEE. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) PARTLY ALLOWED THE AP PEAL OF THE ASSESSEE. 5. THE LD. DR SUBMITTED THAT THE DIVIDEND RECEIVED FROM IFFCO IS EXEMPT U/S 80P(2)(1) OF THE INCOME TAX ACT, AS PER THE CLA IM OF THE ASSESSEE. BUT THE ASSESSING OFFICER RIGHTLY OBSERVED THAT SECTION 115 O OF THE INCOME TAX ACT 1961 PROVIDES SPECIAL PROVISIONS RELATING TO TAX ON DISTRIBUTED PROFIT OF DOMESTIC COMPANIES. SINCE, NO TAX ON THE DIVIDEND RECEIVED BY THE ASSESSEE 3 ITA NO. 3913/DEL/2016 HAS BEEN PAID BY THE DIVIDEND PAYING SOCIETY, BEING COOPERATIVE SOCIETY, THEREFORE, THE DIVIDEND INCOME CANNOT BE EXEMPTED I N THE HANDS OF THE ASSESSEE. THEREFORE, THE ASSESSING OFFICER RIGHTLY ADDED RS. 1,82,02,860/- TO THE INCOME OF THE ASSESSEE. THE LD. DR SUBMITTED T HAT THE CIT(A) IN DELETING THIS ADDITION. 6. THE LD. AR RELIED UPON THE ORDER OF THE CIT(A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED ALL T HE RELEVANT MATERIAL AVAILABLE ON RECORD. IN THE PRESENT CASE, DIVIDEND RECEIVED FROM IFFCO AND UP COOPERATIVE BANK LTD. ARE EXEMPT U/S 80P(2)(1) OF T HE INCOME TAX ACT, 1961 AS IFFCO AND U.P. COOPERATIVE BANK LTD. ARE COOPERATIV E SOCIETY. THE CIT(A) HELD AS UNDER:- 4. HAVING CONSIDERED FACTS OF THE CASE AND RIVAL CONTENTIONS, THE APPEAL IS DECIDED AS UNDER:- 4.1. ALL THE GROUNDS OF APPEAL EXCEPT GROUND NO. 4 BEING INTER-RELATED ARE AGAINST THE ADDITION OF RS.1,82,02,860/- BEING DISA LLOWANCE OF DIVIDEND INCOME RECEIVED FORM IFFCO AND U.P. COOPERATIVE BA NK LTD. DURING APPEAL PROCEEDINGS THE APPELLANT HAS MADE WRITTEN SUBMISSI ON, THE RELEVANT PARA IS REPRODUCED AS UNDER:- .. UNFORTUNATELY THE CLAIM OF EXEMPTION IN R ESPECT OF DIVIDEND INCOME OF THE APPELLANT CONSIDERED WITH RE FERENCE TO THE PROVISIONS OF SECTION 1150 AND SECTION 10(34) WAS N OT CORRECT AS THE CLAIM IS ADMISSIBLE U/S 80P(2)(D) OF THE INCOME TAX ACT. IT MAY BE SUBMITTED THAT THE APPELLANT IS A COOPERATIVE SOCIE TY AND THE DIVIDEND PAYING CONCERN I.E. INDIAN FARMER FERTILIZ ER COOPERATIVE LTD. IS ALSO A SOCIETY. SINCE THE DIVIDEND INCOME DERIVE D BY THE APPELLANT IS FROM A CONCERN WHICH IS ALSO A COOPERATIVE SOCIE TY, THE WHOLE OF SUCH INCOME IS EXEMPT U/S 80P(2)(D) OF THE I.T. ACT . IT MAY VERY HUMBLY BE SUBMITTED THAT EXACTLY SIMILAR ISSUE HAD ALSO ARISEN IN 4 ITA NO. 3913/DEL/2016 THE ASSESSMENT YEAR 2007-08, 2009-10, 2010-11 AND 2 011-12 WHERE LD. PREDECESSORS AND YOUR HONOR HAD BEEN PLEA SED TO ACCEPT THE CLAIM OF THE APPELLANT. COPIES OF THOSE DECISIO NS ARE ENCLOSED HEREWITH FOR READY REFERENCE. IN VIEW OF THE ABOVE SUBMISSIONS, THE APPELLANT IS ENTITLED TO EXEMPTION IN RESPECT OF TOTAL INCOME OF RS. 1820286 0/-/- FROM DIV IDEND. 4.2 THE FACTS OF THE CASE AS WELL AS SUBMISSION MAD E BY THE APPELLANT HAVE BEEN CAREFULLY CONSIDERED. IT IS OBSERVED THAT THE ASSESSING OFFICER HAD MADE ADDITION OF RS. 1,82,02,860/- HOLDING THAT DIVIDEND INCOME RECEIVED FROM IFFCO IS NOT EXEMPT. THE AFORESAID COOPERATIVE SOCI ETY HAD NOT PAID TAX ON DIVIDEND PAID TO THE APPELLANT AS PER PROVISIONS OF SECTION 10 (34) R.W. SECTION 1150 OF THE ACT. ON THE OTHER HAND THE APPELLANT HA S VEHEMENTLY ARGUED THAT DIVIDEND INCOME RECEIVED FROM THE AFORESAID COOPERA TIVE SOCIETY WAS EXEMPT U/S 80P (2)(D) OF THE ACT. IT IS ALSO CONTENDED THA T THE A.O. HAS IGNORED THE FACT THAT PART DIVIDEND HAS COME FROM U.P. COOPERAT IVE BANK. THE APPELLANT HAS ALSO FURNISHED COPIES OF THE ORDER OF CIT (A) W HEREIN IN SIMILAR FACTS AND CIRCUMSTANCES, THE CIT (A) IN THEIR ORDERS DATED 20 .09.2013, 21.02.2014, 23.02.2015 & 17.04.2015 HAD ALLOWED THE APPEALS OF APPELLANT FOR A.YRS. 2007- OS, 2009-10, 2010-11 & 2011-12 RESPECTIVELY. TO DECIDE THE IMPUGNED ISSUE LET US GO THROUGH THE RELEVANT PROVISIONS OF THE ACT . SECTION 80P(2)(D) OF THE ACT SAYS- IN RESPECT OF ANY INCOME BY WAY OF INTEREST OR DIV IDENDS DERIVED BY THE CO OPERATIVE INVESTMENT WITH ANY OTHER CO-OPERATIVE SO CIETY, THE WHOLE OF SUCH INCOME. 5 ITA NO. 3913/DEL/2016 THE APPELLANT HAS RECEIVED DIVIDEND FROM IFFCO AND U.P. COOPERATIVE BANK LTD, WHICH ARE COOPERATIVE SOCIETY. AS FAR AS IFFCO IS CONCERN ED, THE FACT THAT IT IS A COOPERATIVE SOCIETY IS AN ESTABLISHED FACT IN EAR LIER YEARS AND THIS YEAR ALSO THE A.O. HAS MENTIONED THAT IT IS A COOPERATIVE SOCIETY. AS FAR AS THE U.P. COOPERATIVE BANK LTD. IS CONCERNED, THE A.O. HAS NO T MENTIONED ANYTHING ABOUT IT. I HAVE VERIFIED THAT IT IS COOPERATIVE SO CIETY AS IS ASCERTAINABLE FROM THE REGISTRATION CERTIFICATE PRODUCED BY THE APPELL ANT AND ON MY BEHEST THE APPELLANT HAS ALSO PRODUCED I.T. RETURN OF THE BANK WHEREIN THE STATUS IS MENTIONED TO BE COOPERATIVE SOCIETY. EVEN OTHERWISE IT IS NOT THE CASE OF THE A.O. THAT U.P. COOPERATIVE BANK LTD. IS A COMPANY. THUS, THE AMOUNT OF RS. 1,82,02,860/- BEING DIVIDEND RECEIVED FROM THE AFOR ESAID COOPERATIVE SOCIETIES IS EXPRESSLY EXEMPT U/S 80P (2)(D) OF THE ACT. SIMILAR VIEW HAS ALSO BEEN TAKEN BY THE CIT (A) IN APPELLANTS OWN CASE F OR A.YS. 2007-08, 2009- 10, 2010-11 & 2011-12. IN VIEW OF THE ABOVE, IT IS HELD THAT THE ASSESSING OFFICER IS NOT JUSTIFIED TO MAKE ADDITION OF RS. 1, 82,02.860/-. THE SAME IS DELETED AND RELATED GROUNDS OF APPEAL ARE ALLOWED. THE CIT(A) HAS EXTENSIVELY GIVEN THE FINDING AND F OLLOWED THE EARLIER YEARS ORDERS. THE LD. DR ALSO COULD NOT POINT OUT WHETHER THE REVENUE HAS CHALLENGED THE EARLIER YEARS ORDER OR NOT. THERE IS NO NEED TO INTERFERE WITH THE FINDINGS OF THE CIT(A). THUS, WE ARE FOLLOWING THE RULES OF CONSISTENCY AND THUS, APPEAL OF THE REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH SEPTEMBER, 2018. SD/- SD/- (R. K. PANDA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 18/09/2018 COPY FORWARDED TO: 6 ITA NO. 3913/DEL/2016 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE OF DICTATION 06.09.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 07.09.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 1 8 .09.2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 1 8 .09.2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 1 8 .09.2018 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER