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

ITA 400/PAN/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93458 (ITAT-PANAJI)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 14-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL

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 S . 397 , 398 & 428 /PNJ/2014 (ASST. YEAR : 20 11 - 1 2 ) ITO, WARD - 1(2), BELGAUM. VS. 1. THE BELGAUM BAKERS CO - OP CREDIT SOCIETY LTD., TAHASHILDAR GALLI, BELGAUM. PAN NO. AAAAT 8091 K 2. THE BELGAUM CITY CORPORATION EMPLOYEES CO - OP CREDIT SOCIETY LTD., 3525/1, NARVEKAR GALLI, BELGAUM. PAN NO.AAAAB 1352 R 3. M/S. SINDHUDURGA CO - OP CREDIT SOCIETY LTD. ANAGOL ROAD, TILAKWADI, BELAGAVI. PAN NO. AABAS 8153 Q ITA NO S . 400 & 4 01 /PNJ/2014 (ASST. YEAR : 20 08 - 09 ) ITO, WARD - 2(1), BELGAUM. 4. KPTCL EMPLOYEES CO - OP CREDIT SOCIETY LTD., NEHRU NAGAR, BELGAUM. PAN NO. AAGFK 2092 Q 5. M/S. SAMARTH URBAN CO - OP CREDIT SOCIETY LTD., 1942, KADOLKAR GALLI, BELGAUM. PAN NO.AAABS 0828 C (APPELLANT) (RESPONDENT) 2 ITA NO S . 397, 398,400, 401 & 428 /PNJ/2014 ASSESSEE BY : SHRI M.D. CHOWGULE - CA (1) SHRI P. DINESH ADV. (2 & 5 ) SHRI P.R. ADYAPAK CA (3) SHRI ASHOK G. MUDNUR CA (4) DEPARTMENT B Y : SHRI MEHBOOB ALI KHAN - D.R. DATE OF HEARING : 1 8 / 0 6 /2015 . DATE OF PRONOUNCEMENT : 18/ 0 6 /201 5 . O R D E R PER N.K. BILLAIYA THESE 05 APPEALS BY THE REVENUE ARE IN RESPECT OF 05 DIFFEREN T ASSESSEES PREFERRED AGAINST 05 DIFFERENT ORDERS OF LD. CIT(A) , BELGAUM . ALL THESE APPEALS HAVE COMMON ISSUES, THEREFORE THEY WERE HEARD TOGETHER AND DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. THE COMMON GRIEVANCE IN ALL THESE APPEALS OF THE REVENUE IS THAT THE LD. CIT(A) ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE FACT THAT THE ASSESSEE IS A COOPERATIVE SOC IETY WHICH FULFILS ALL THE THREE CONDITIONS OF BEING HELD A PRIMARY COOPERATIVE BANK AND THEREFORE NOT ELIGIBLE FOR DEDUCTION U/S. 80P OF THE ACT. 3. AT THE VERY OUTSET , IT WAS POINTED OUT TO THE LD. DR THAT THE ISSUES INVOLVED IN THE APPEALS UNDER CONSIDERATION HAVE BEEN 3 ITA NO S . 397, 398,400, 401 & 428 /PNJ/2014 ELABORATELY CONSIDERED BY THIS BENCH AND HAVE DECIDED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE IN THE CASE OF ITO VS. SHRI MALLIKARJUN CO - OPERATIVE CREDIT SOCIETY IN I.T.A.NO. 415/PNJ/20 14 DATED 15/06/2015 WHEREIN THE TRIBUNAL HAS FOLLOWED THE DECISION OF THE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT VS. BILLURU GURUBASAVA PATTINAS SAHAKARI SANGHA NIYAMAT IN ITA NO. 50006/2013 DATED 05/02/2014 AND HELD AS UNDER: - 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 ASSESSEE HAS OBTAINED ANY BANKING LICENCE. THE BUSINESS O F THE ASSESSEE IS TO PROVIDE CREDIT FACILITIES TO ITS MEMBERS. SINCE, THERE IS NO FINDING 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 LEGISLATURE IS CLEAR IF A COOPERATIVE BANK IS EXCLUSIVELY CARRYING ON BANKING BUSINESS, THEN INCOME DERIVED FROM THE SAID BUSINESS CANNOT BE DEDUCTED 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 FINDI NG THAT IT POSSESS A LICENCE 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 MEMBERS WHICH IS COVERED U/S.80P(2)(A)(I). FOR THIS PROPOSITION, WE DRAW SUPPORT F ROM THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF BILLURU GURUBASAVA PATTINAS SAHAKARI SANGHA NIYAMAT (SUPRA), WE 4 ITA NO S . 397, 398,400, 401 & 428 /PNJ/2014 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 BY THE ASSESSEE. AS NO DISTINGUISHING DECISION HAS BEEN BROUGHT ON RECORD BY THE REVENUE , ALL THE APPEALS UNDER CONSIDERATION ARE DISMISSED. 4 . IN THE RESULT, ALL THE APPEAL S FILED BY THE REVENUE ARE DISMISSED. ( ORDER PRONOUNCED IN THE OPEN COURT ON 1 8 TH JUNE , 201 5 ). S D / - S D / - ( GEORGE MATHAN ) ( N.K. BILLA I YA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 1 9 T H JUNE , 201 5 . VR/ - COPY TO: 1 . THE APPELLANT S A) THE BELGAUM BAKERS CO - OP CREDIT SOCIETY LTD. B) THE BELGAUM CITY CORPORATION EMPLOYEES CO - OP CREDIT SOCIETY LTD., C) M/S. SINDHUDURGA CO - OP CREDIT SOCIETY LTD. D) KPTCL EMPLOYEES CO - OP CREDIT SOCIETY LTD., E) M/S. SAMARTH URBAN CO - OP CREDIT SOCIETY LTD 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 S . 397, 398,400, 401 & 428 /PNJ/2014 DATE INITIAL ORIGINAL DICTATION PAD IS ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 1 8 .06.2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 1 8 .06.2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 1 8 /06/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 1 8 /06/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 1 9 /06/2015 SR.PS 6. DATE OF PRONOUNCEMENT 1 8 /06/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 19 /06/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER