Income Tax Officer, Hardoi V. M/s Sahkari Ganna Vikas Samiti Ltd., Hardoi

ITA 467/LKW/2013

• Counselvise Citation: 46723714 RSA 2013
• Duration Of Justice: 2 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-06-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 27-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHUBHAM RASTOGI F
• Keywords: Business income
• Section: 56

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.467/LKW/2013 ASSESSMENT YEAR:2010 - 2011 M/S SAHKARI GANNA VIKAS SAMITI LTD., RUPAPUR CHAURAHA (MUNDER), HARDOI. VS INCOME TAX OFFICER, HARDOI. (RESPONDENT) (APPELLANT) SHRI R. K. RAM, D. R. APPELLANT BY SHRI SHUBHAM RASTOGI, F.C.A. RESPONDENT BY 11/06/2015 DATE OF HEARING 15 /07/2015 DATE OF PRONOUNCEMENT O R D E R PER A. K. GARODIA, A.M. THIS IS REVENUES APPEAL DIRECTED AGAINST THE ORDER PASSED BY LEARNED CIT(A), BAREILLY DATED 17/04/2013 FOR THE ASSESSMENT YEAR 2010 - 2011. 2. GROUND NO. 1 IS AS UNDER: 1. THAT THE LEARNED COMMISSIONER OF INCOME - TAX (APPEALS) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.8,04,545/ - PLACING RELIANCE OF THE JUDGMENTS OF THE HON'BLE ITAT LUCKNOW IN APPEAL NO. 124/LUK/07, 125/LUK/07, 127/LUK/07 AS THE HON'BLE SUPREME COURT IN THE CASE OF TOTGARS COOPERATIVE SALE SOCIETY LIMITED 322 - ITR - 283 (SC) 2010 HAS HELD THAT THE ADDITION WAS MADE AS INTEREST FROM POST OFFICE AND NATIONALIZED BANK (OTHER THAN COOPERATIVE BANK) AND THE ASSESSEE FAILED TO PROVE WITH SUPPORTING DOCUMENTARY EVI DENCE THAT INTEREST INCOME WAS EXCLUSIVELY DERIVED FROM DEPOSITS IN THE SAVING BANK ACCOUNT AND NOT FROM LONG - TERM DEPOSITS MADE FOR LONG TERM INVESTMENTS OUT OF SURPLUS FUNDS TO EARN INTEREST INCOME WHICH DOES NOT QUALIFY FOR DEDUCTION UNDER SECTION 80 P (2)(D) OF THE I. T. ACT, 1961 AND 2 THEREFORE, THE ADDITION WAS RIGHTLY MADE BY THE ASSESSING OFFICER AS THE FACTS OF THE INSTANT CASE ARE DIFFERENT FROM THE CASE LOW CITED THE ASSESSEE. 3. LEARNED D.R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER. HE ALS O PLACED RELIANCE ON THE JUDGMENT OF HON'BLE APEX COURT RENDERED IN THE CASE OF TOTGARS CO - OPERATIVE SALE SOCIETY LTD. VS. INCOME TAX OFFICER [2010] 322 ITR 283 (SC) WHEREAS LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). HE ALSO SUBM ITTED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE TWO TRIBUNAL DECISIONS IN THE CASE OF ZILA GANNA UTPADAK SAHKARI SAMITI LTD. HARDOI IN I.T.A. NO.737/LKW/2013 AND 738/LKW/2013 DATED 28/11/2014 AND IN THE CASE OF ROZA SAHKARI GANNA SAMITI LIMITED, ROZA, DISTT. SHAHJAHANPUR IN I.T.A. NO.499/LKW/2013 DATED 10/09/2013. HE ALSO SUBMITTED THAT THE TRIBUNAL HAS FOLLOWED THE JUDGMENT OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. CO - OPERATIVE CANE DEVELOPMENT UNION LTD. [1979] 118 ITR 77 0 (ALL) AND IN THE CASE OF CIT VS. KRISHAK SAHKARI GANNA SAMITI LTD. [2002] 258 ITR 594 (ALL). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. FIRST OF ALL, WE EXAMINE THE APPLICABILITY OF JUDGMENT OF HON'BLE APEX COURT CITED BY LEARNED D.R. OF THE REVENUE RENDERED IN THE CASE OF TOTGARS CO - OPERATIVE SALE SOCIETY LTD. (SUPRA). IN THAT CASE, IT WAS HELD BY HON'BLE APEX COURT THAT INVESTMENT OF SURPLUS FUND IN HAND NOT IMMEDIATELY REQUIRED IN SHORT TERM DEPOSITS AND SECURITIES IS RESULTING INTO INCOME FROM O THER SOURCES AND NOT BUSINESS INCOME OF THE ASSESSEE SOCIETY AND THEREFORE, THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S 80P IN RESPECT OF SUCH INTEREST INCOME. AS PER THE FACTS OF THAT CASE , IN ALL THE YEARS OUT OF 10 YEARS INVOLVED IN THAT CASE, THE AS SESSEE WAS HAVING ALMOST EQUAL AMOUNT OF OTHER LIABILITIES IN ADDITION TO CAPITAL AND OTHER OWN FUNDS. IT IS NOTED BY HON'BLE APEX COURT THAT THE ASSESSEE MARKETS THE AGRICULTURAL PRODUCE TO ITS MEMBERS AND HAD RETAINED THE SALE PROCEEDS IN MANY CASES A ND THIS RETENTION AMOUNT PAYABLE TO MEMBERS FROM WHOM THE PRODUCE WAS BOUGHT WAS INVESTED IN SHORT TERM 3 DEPOSIT/SECURITIES AND SUCH RETENTION AMOUNT WAS LIABILITY OF THE ASSESSEE SOCIETY AND IT WAS SO SHOWN IN THE BALANCE SHEET AND THEREFORE , TO THAT EXTEN T, SUCH INTEREST INCOME CANNOT BE SAID TO BE ATTRIBUTABLE EITHER TO THE ACTIVITY MENTIONED IN SECTION 80P (1) OR 80P(2 ) AND THEREFORE, THE SAME WAS RIGHTLY TAXED UNDER THE HEAD INCOME FROM OTHER SOURCES U/S 56 OF THE ACT. IN THE PRESENT CASE, THIS IS NOT A FACT THAT THE DEPOSIT IN BANK AND POST OFFICE IS OUT OF SUCH AMOUNT RETAINED FROM THE MEMBERS AND SHOWN BY THE ASSESSEE IN THE BALANCE SHEET AS LIABILITY. HENCE, IT IS SEEN THAT THE FACTS OF THAT CASE ARE DIFFERENT AND THEREFORE, THIS JUDGMENT IS NOT A PPLICABLE IN THE PRESENT CASE. 5. NOW WE EXAMINE THE APPLICABILITY OF TWO TRIBUNAL DECISION S CITED BY LEARNED A.R. OF THE ASSESSEE IN WHICH TWO JUDGMENTS OF HON'BLE ALLAHABAD HIGH COURT WERE FOLLOWED BY THE TRIBUNAL. WE FIND THAT IN THE PRESENT CASE, THE FACTS ARE SIMILAR TO THE FACTS IN THOSE TWO CASES AND THEREFORE, WE DO NOT FIND ANY REASON TO TAKE A CONTRARY VIEW IN THE PRESENT CASE PARTICULARLY WHEN LEARNED D.R. OF THE REVENUE COULD NOT POINT OUT ANY DIFFERENCE IN FACTS. HENCE, RESPECTFULLY FOLLOWIN G THESE TWO ORDERS OF THE TRIBUNAL AND IN TURN FOLLOWING TWO JUDGMENTS OF HON'BLE ALLAHABAD HIGH COURT FOLLOWED BY THE TRIBUNAL IN TH ESE CASE S , WE DECLINE TO INTERFERE IN THE ORDER OF CIT(A). GROUND NO. 1 IS REJECTED. 6. GROUND NO. 2 IS AS UNDER: 2. TH AT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFIED IN DELETING THE ADDITION OF RS.8,26,188/ - ON ACCOUNT OF DISALLOWANCE OF P. F . DEDUCTION THE ADDITION AS THE ASSESSEE HAD NOT ONLY FAILED TO DEPOSIT THE AMOUNT RECOVERED FROM ITS EMPLOYEES BUT ALSO FAILED TO DEPOSITS OWN CONTRIBUTION AS THE SAME WOULD BE ALLOWABLE DEDUCTION AS PER PROVISIONS OF SECTION 36(1)(VI) /43B. 4 7. LEARNED D. R. OF THE REVENUE SUPPORTED THE ASSESSMENT ORDER WHEREAS LEARNED A. R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT IT IS HELD BY LEARNED CIT(A) THAT EVEN THE ENHANCED INCOME BY WAY OF MAKING ADDITION U/S 36(1)(VA) & 2(24)(X) WILL BE ELIGIBLE FOR DEDUCTION U/S 80P OF THE ACT. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) ON THIS ISSUE. ACCORDINGLY, THIS GROUND IS ALSO REJECTED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE STANDS DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SUNIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 15 /07/2015 *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR