M/s Kappalaguddi Vyavasaya Seva Sahakari Niyamitha , Belgavi V. Income Tax Officer Ward-4 , Belgavi

ITA 469/BANG/2018

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5465 (ITAT-BANGALORE)
• Duration Of Justice: 1 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 19-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: L V BHASKAR REDDY
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-A BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 469 / BANG/201 8 ASSESSMENT YEAR : 2013 - 14 M/S. THE KAPPALAGUDDI VYAVASAYASEVASAHAKARI NIYAMITHA, PO: KAPPALAGUDDI, TQ: RAIBAG, DIST: BELGAVI. PAN: AAAAT3091K VS. THE INCOME TAX OFFICER, WARD 4, BELGAVI. APPELLANT RESPONDENT APPELLANT BY : SHRI SANDEEP .C, CA RESPONDENT BY : SHRI L.V. BHASKAR REDDY, ADDL. CIT (DR) DATE OF HEARING : 20 . 0 3 .2018 DATE OF PRONOUNCEMENT : 20 . 0 3 .201 8 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE ORDER OF LD. CIT(A), GULBARGA DATED 29.11.2017 FOR ASSESSMENT YE AR 2013-14. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THAT THE ORDER OF THE LEARNED COMMISSIONER OF IN COME TAX (APPEALS) IS PREJUDICIAL TO THE INTERESTS OF THE AP PELLANT, IS BAD AND ERRONEOUS IN LAW AND AGAINST THE FACTS AND CIRCUMST ANCES OF THE CASE. 2. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) ERRED IN LAW AND ON FACTS IN NOT ALLOWING THE INTEREST INCOM E OF RS. 4,83,648/- EARNED FROM CO-OPERATIVE BANKS AS DEDUCTION U/S 80P (2)(A)(I) OF THE ACT ON THE GROUND THAT SUCH INTEREST INCOME IS NOT ATTRIBUTABLE TO THE . ACTIVITIES OF THE APPELLANT. 3. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) ERRED IN LAW AND ON FACTS IN NOT ALLOWING DEDUCTION OF RS 83 ,915/-. U/S 80P OF THE ACT, BEING THE DIVIDEND RECEIVED FROM COOPERATI VE BANKS. 4. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) ERRED IN LAW AND ON FACTS IN NOT ALLOWING INTEREST INCOME OF RS. 4,83,648/- AND DIVIDEND INCOME OF RS. 83,915/-ON THE DEPOSITS MADE IN THE CO- ITA NO. 469/BANG/2018 PAGE 2 OF 4 OPERATIVE BANKS U/S. 80P(2)(D) OF THE ACT. 5. THAT THE LEARNED COMMISSIONER OF INCOME TAX (APP EALS) ERRED IN LAW AND ON FACTS IN HOLDING THAT THE APPELLANT IS N OT ELIGIBLE FOR DEDUCTION U/S. 80P(2)(A)(I) OF THE ACT EVEN THOUGH SUCH ISSUE WAS NOT RAISED BY THE ASSESSING OFFICER. EACH OF THE ABOVE GROUND IS WITHOUT PREJUDICE TO ON E ANOTHER AND THE APPELLANT SEEKS LEAVE OF THE HON'BLE INCOME TAX APP ELLATE TRIBUNAL, BANGALORE TO ADD, DELETE, AMEND OR MODIFY OTHERWISE ANY OF THE ABOVE GROUNDS EITHER BEFORE OR AT THE TIME OF HEARING OF THIS APPEAL. 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THE LD. CIT(A) HAS FOLLOWED JUDGMENT OF HON'BLE KARNATAKA HIGH COURT DATED 16.0 6.2017 RENDERED IN THE CASE OF PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY AS REPORTED IN395 ITR 611 (KARN). HE SUBMITTED THAT THE FACTS OF THIS CASE ARE DIFFERENT AND THEREFORE, THIS JUDGMENT IS NOT APPLICABLE IN THE P RESENT CASE. HE SUBMITTED THAT IN THE PRESENT CASE, ANOTHER JUDGMENT OF HON'B LE KARNATAKA HIGH COURT RENDERED IN THE CASE OF TUMKUR MERCHANTS SOUHARDA C REDIT COOPERATIVE LTD. VS. ITO AS REPORTED IN 230 TAXMAN 309 IS APPLICABLE AND THEREFORE, THE MATTER SHOULD BE RESTORED BACK TO AO OR CIT (A) FOR A FRES H DECISION BY FOLLOWING THIS JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED I N THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO( SUPRA). AT THIS JUNCTURE, BENCH WANTED TO KNOW REGARDING THE FACTS OF THE PRE SENT CASE BECAUSE THE DECISION OF HON'BLE KARNATAKA HIGH COURT RENDERED I N BOTH CASES I.E. PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY(SUPR A) AND TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO(SUPRA) ARE ON THE SAME LINE BUT THE CONCLUSION IS DIFFERENT BECAUSE THE FACTS ARE DIFFE RENT. THE BENCH POINTED OUT THAT IN THE CASE OF PCIT AND ANOTHER VS. TOTAGARS C O-OPERATIVE SALE SOCIETY(SUPRA), THE MONEY DEPOSITED IN BANK WAS LIA BILITY OF THE ASSESSEE AND IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COO PERATIVE LTD. VS. ITO(SUPRA), THE MONEY DEPOSITED IN BANK WAS NOT OUT OF LIABILITY BUT ASSESSEES OWN FUNDS. THEREFORE THIS DECISION IS IN FAVOUR OF THE ASSESSEE. THE BENCH POINTED OUT THAT IF THE FACTS IN THE PRESENT CASE A RE SIMILAR TO THAT OF THE FACTS IN THE CASE OF PCIT AND ANOTHER VS. TOTAGARS CO-OPERAT IVE SALE SOCIETY (SUPRA) THEN THE ISSUE SHOULD BE DECIDED AGAINST THE ASSESS EE. IF THE FACTS OF THE ASSESSEE ARE SIMILAR TO THAT OF TUMKUR MERCHANTS SO UHARDA CREDIT COOPERATIVE ITA NO. 469/BANG/2018 PAGE 3 OF 4 LTD. VS. ITO(SUPRA) THEN THE ISSUE IS TO BE DECIDED IN FAVOUR OF THE ASSESSEE. IN REPLY, IT WAS SUBMITTED BY LD. AR OF ASSESSEE TH AT THE FACTS ARE NOT READILY AVAILABLE AND THEREFORE, THE MATTER MAY BE RESTORED BACK TO THE FILE OF CIT(A) FOR FRESH DECISION AFTER EXAMINING THE FACTS OF THE PRE SENT CASE IN THE LIGHT OF THESE TWO JUDGMENTS OF HON'BLE KARNATAKA HIGH COURT. THE LD. DR OF REVENUE ALSO AGREED TO THIS PROPOSITION PUT FORWARD BY THE LD. A R OF ASSESSEE. 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND I FE EL IT PROPER THAT THE MATTER SHOULD GO BACK TO THE FILE OF CIT(A) FOR FRESH DECI SION AFTER EXAMINING THE FACTS OF THE PRESENT CASE IN THE LIGHT OF THESE TWO JUDGM ENTS RENDERED IN THE CASE OF PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOC IETY(SUPRA) AND TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO( SUPRA) AND IF IT IS FOUND THAT THE FACTS OF THE PRESENT CASE ARE IN LINE WITH THE FACTS OF THE PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY(SUPR A) THEN THE ISSUE MAY BE DECIDED AGAINST THE ASSESSEE AND IF THE FACTS OF TH E PRESENT CASE ARE IN LINE WITH THE FACTS OF THE CASE OF TUMKUR MERCHANTS SOUH ARDA CREDIT COOPERATIVE LTD. VS. ITO(SUPRA) THEN THE ISSUE MAY BE DECIDED I N FAVOUR OF THE ASSESSEE. THE CIT(A) SHOULD PASS NECESSARY ORDER AS PER LAW I N THE LIGHT OF ABOVE DISCUSSION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 20 TH MARCH, 2018. /MS/ ITA NO. 469/BANG/2018 PAGE 4 OF 4 COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.