Appeal details
Counselvise Citation
[2019] 112 COUNSELVISE.COM (IT) 1690 (ITAT-RAJKOT)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
2 year(s) 9 month(s) 27 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
12-12-2019
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
SMC
Assessment Year
2013-2014
Appeal Filed On
15-02-2017
Judgement Text
, IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT [CONDUCTED THROUGH E COURT AT AHMEDABAD] BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ ITA.NO.48/RJT/2017 / ASSTT. YEAR: ASSTT.YEAR 2013-14 MADHAV SHARAFI SAHKARI MANDLI LTD. AKSHAR MARG, OFF KALAWAD ROAD RAJKOT. VS ITO, WARD - 2(1)(1) RAJKOT. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : WRITTEN SUBMISSIONS REVENUE BY : SHRI ARPIT PRATAP SINGH, SR.DR / DATE OF HEARING : 27/11/2019 / DATE OF PRONOUNCEMENT: 12/12/2019 $%/ O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL AGAINST O RDER OF LD.COMMISSIONER OF INCOME TAX(A)-2, AHMEDABAD DATED 19.12.2016 PASSED FOR THE ASSTT.YEAR 2013-14. 2. SOLE GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CI T(A) HAS ERRED IN CONFIRMING ADDITION OF RS.3,29,384/-. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA D FILED RETURN OF INCOME ELECTRONICALLY ON 14.10.2013 DECLARING TOTAL INCOME AT RS.89,880/-. THE RETURN WAS SELECTED FOR SCRUTINY ASSESSMENT AND NOT ICE UNDER SECTION 143(2) WAS ISSUED AND SERVED UPON THE ASSESSEE. ON SCRUTI NY OF THE ACCOUNTS, IT ITA NO.48/RJT/2017 2 REVEALED TO THE AO THAT THE ASSESSEE HAS RECEIVED I NTEREST OF RS.3,29,384/- FROM GEB. IT CLAIMED THAT THIS INTEREST INCOME WAS EXEMPT UNDER SECTION 80P(2)(I). THE LD.AO DISALLOWED THIS CLAIM OF THE ASSESSEE AND MADE ADDITION OF RS.3,29,384/-. APPEAL TO THE CIT(A) DID NOT BRI NG ANY RELIEF TO THE ASSESSEE. 4. IN RESPONSE TO THE NOTICE OF HEARING, THE LD.COU NSEL FOR THE ASSESSEE HAS FILED WRITTEN SUBMISSIONS, WHEREIN HE HAS REITERATE D CONTENTIONS OF THE ASSESSEE. HE RELIED UPON THE JUDGMENT OF HONBLE H IMACHAL PRADESH HIGH COURT IN THE CASE OF CIT VS. CANGRA CO-OP. BANK LTD ., 309 ITR 106. ON THE STRENGTH OF THIS DECISION, HE SUBMITTED THAT INTERE ST ON STATUTORY DEPOSITS DESERVES TO BE TREATED AS ELIGIBLE FOR GRANT OF DED UCTION UNDER SECTION 80P(2)(A). HE SUBMITTED THAT FOR THE PURPOSE OF BU SINESS, IT HAS TAKEN GEB CONNECTION, AND FOR SUCH CONNECTION IT HAS TO MAKE DEPOSITS. SUCH DEPOSITS HAS RESULTED INTEREST INCOME TO THE ASSESSEE, AND T HIS OUGHT TO BE QUALIFIED FOR EXEMPTION UNDER SECTION 80P(2) OF THE ACT. ON THE OTHER HAND, THE LD.DR RELIED UPON ORDERS OF THE REVENUE AUTHORITIES. 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND GONE TH ROUGH THE RECORD CAREFULLY. SECTION 80P(2)(I) HAS DIRECT BEARING ON THE CONTROVERSY, THEREFORE, IT IS IMPERATIVE UPON US TO TAKE NOTE OF THE RELEVA NT CLAUSE. IT READS AS UNDER: 80P. (1) WHERE, IN THE CASE OF AN ASSESSEE BEING A CO-OPERATIVE SOCIETY, THE GROSS TOTAL INCOME INCLUDES ANY INCOME REFERRED TO IN SUB-SECTION (2), THERE SHALL BE DEDUCTED, IN ACCORDANCE WITH AND SUBJECT T O THE PROVISIONS OF THIS SECTION, THE SUMS SPECIFIED IN SUB-SECTION (2), IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE. (2) THE SUMS REFERRED TO IN SUB-SECTION (1) SHALL B E THE FOLLOWING, NAMELY : (A) IN THE CASE OF A CO-OPERATIVE SOCIETY ENGAGED IN (I) CARRYING ON THE BUSINESS OF BANKING OR PROVID ING CREDIT FACILITIES TO ITS MEMBERS, OR (II) A COTTAGE INDUSTRY, OR ITA NO.48/RJT/2017 3 (III) THE MARKETING OF AGRICULTURAL PRODUCE GROWN B Y ITS MEMBERS, OR (IV) THE PURCHASE OF AGRICULTURAL IMPLEMENTS, SEEDS , LIVESTOCK OR OTHER ARTICLES INTENDED FOR AGRICULTURE FOR THE PURPOSE O F SUPPLYING THEM TO ITS MEMBERS, OR (V) THE PROCESSING, WITHOUT THE AID OF POWER, OF TH E AGRICULTURAL PRODUCE OF ITS MEMBERS, OR (VI) THE COLLECTIVE DISPOSAL OF THE LABOUR OF ITS M EMBERS, OR (VII) FISHING OR ALLIED ACTIVITIES, THAT IS TO SAY, THE CATCHING, CURING, PROCESSING, PRESERVING, STORING OR MARKETING OF FIS H OR THE PURCHASE OF MATERIALS AND EQUIPMENT IN CONNECTION THEREWITH FOR THE PURPOSE OF SUPPLYING THEM TO ITS MEMBERS, THE WHOLE OF THE AMOUNT OF PROFITS AND GAINS OF BUS INESS ATTRIBUTABLE TO ANY ONE OR MORE OF SUCH ACTIVITIES : PROVIDED THAT IN THE CASE OF A CO-OPERATIVE SOCIETY FALLING UNDER SUB-CLAUSE (VI), OR SUB-CLAUSE (VII), THE RULES AND BYE-LAWS O F THE SOCIETY RESTRICT THE VOTING RIGHTS TO THE FOLLOWING CLASSES OF ITS MEMBE RS, NAMELY: (1) THE INDIVIDUALS WHO CONTRIBUTE THEIR LABOUR OR , AS THE CASE MAY BE, CARRY ON THE FISHING OR ALLIED ACTIVITIES; (2) THE CO-OPERATIVE CREDIT SOCIETIES WHICH PROVID E FINANCIAL ASSISTANCE TO THE SOCIETY; (3) THE STATE GOVERNMENT; (B) IN THE CASE OF A CO-OPERATIVE SOCIETY, BEING A PRIMARY SOCIETY ENGAGED IN SUPPLYING MILK, OILSEEDS, FRUITS OR VEGE TABLES RAISED OR GROWN BY ITS MEMBERS TO (I) A FEDERAL CO-OPERATIVE SOCIETY, BEING A SOCIE TY ENGAGED IN THE BUSINESS OF SUPPLYING MILK, OILSEEDS, FRUITS, OR VE GETABLES, AS THE CASE MAY BE; OR (II) THE GOVERNMENT OR A LOCAL AUTHORITY; OR (III) A GOVERNMENT COMPANY AS DEFINED IN SECTION 61 7 OF THE COMPANIES ACT, 1956 (1 OF 1956), OR A CORPORATION ESTABLISHED BY OR UNDER A CENTRAL, STATE OR PROVINC IAL ACT (BEING A COMPANY OR CORPORATION ENGAGED IN SUPPLYIN G MILK, OILSEEDS, FRUITS OR VEGETABLES, AS THE CASE MAY BE, TO THE PUBLIC), THE WHOLE OF THE AMOUNT OF PROFITS AND GAINS OF SUC H BUSINESS; (C) IN THE CASE OF A CO-OPERATIVE SOCIETY ENGAGED IN ACTIVITIES OTHER THAN THOSE SPECIFIED IN CLAUSE (A) OR CLAUSE (B) (EITHER INDEPENDENTLY OF, OR IN ADDITION TO, ALL OR ANY OF THE ACTIVITIES SO SPECIFIED), SO MUCH OF ITS PROFITS AND GAINS ATTRIBUTABLE TO SUCH ACTIVITI ES AS DOES NOT EXCEED, ITA NO.48/RJT/2017 4 (I) WHERE SUCH CO-OPERATIVE SOCIETY IS A CONSUMERS ' CO-OPERATIVE SOCIETY, ONE HUNDRED THOUSAND RUPEES; AND (II) IN ANY OTHER CASE, FIFTY THOUSAND RUPEES. EXPLANATION.IN THIS CLAUSE, 'CONSUMERS' CO-OPERATI VE SOCIETY' MEANS A SOCIETY FOR THE BENEFIT OF THE CONSUMERS; (D) IN RESPECT OF ANY INCOME BY WAY OF INTEREST OR DIVIDENDS DERIVED BY THE CO-OPERATIVE SOCIETY FROM ITS INVESTMENTS WITH ANY OTHER CO-OPERATIVE SOCIETY, THE WHOLE OF SUCH INCOME; (E) IN RESPECT OF ANY INCOME DERIVED BY THE CO-OPE RATIVE SOCIETY FROM THE LETTING OF GODOWNS OR WAREHOUSES FOR STORAGE, PROCE SSING OR FACILITATING THE MARKETING OF COMMODITIES, THE WHOLE OF SUCH INC OME; (F) IN THE CASE OF A CO-OPERATIVE SOCIETY, NOT BEI NG A HOUSING SOCIETY OR AN URBAN CONSUMERS' SOCIETY OR A SOCIETY CARRYING ON T RANSPORT BUSINESS OR A SOCIETY ENGAGED IN THE PERFORMANCE OF ANY MANUFAC TURING OPERATIONS WITH THE AID OF POWER, WHERE THE GROSS TOTAL INCOME DOES NOT EXCEED TWENTY THOUSAND RUPEES, THE AMOUNT OF ANY INCOME BY WAY OF INTEREST ON SECURITIES OR ANY INCOME FROM HOUSE PROPERTY CHARGE ABLE UNDER SECTION 22. EXPLANATION.FOR THE PURPOSES OF THIS SECTION, AN ' URBAN CONSUMERS' CO- OPERATIVE SOCIETY' MEANS A SOCIETY FOR THE BENEFIT OF THE CONSUMERS WITHIN THE LIMITS OF A MUNICIPAL CORPORATION, MUNICIPALITY, MU NICIPAL COMMITTEE, NOTIFIED AREA COMMITTEE, TOWN AREA OR CANTONMENT. . 6. A PERUSAL OF THE ABOVE WOULD INDICATE THAT INTER EST INCOME FROM GEB DOES NOT QUALIFY FOR GRANT OF DEDUCTION UNDER SECTI ON 80P(2)(A). AS FAR AS DECISION OF HONBLE HIMACHAL PRADESH HIGH COURT IS CONCERNED, IN THAT CASE THE ASSESSEE WAS COOPERATIVE BANK. IN ORDER TO RUN ITS BANKING BUSINESS, IT IS REQUIRED TO MAINTAIN STATUTORY RESERVE, AND IN THAT PROCESS, IT HAS TO MAKE DEPOSITS WITH OTHER COOPERATIVE BANK. THE INTEREST INCOME WAS FROM OTHER COOPERATIVE BANK FOR THE PURPOSE OF RUNNING OF ITS BUSINESS. THERE IS FIRST DEGREE NEXUS BETWEEN THE BUSINESS OF BANKING VIS-- VIS DEPOSITS. NO SUCH FACTS ARE AVAILABLE BEFORE US. GEB IS NOT A COOPER ATIVE SOCIETY OR COOPERATIVE BANK FROM WHOM INTEREST INCOME EARNED WOULD BECOME ELIGIBLE FOR GRANT OF DEDUCTION UNDER SECTION 80P(2)(A)(I). THIS SECTION ONLY AUTHORISE THE COOPERATIVE SOCIETY TO CLAIM DEDUCTION IF THE INCOM E FALLS WITHIN THE ITA NO.48/RJT/2017 5 PARAMETER OF THE SECTION. IN VIEW OF THE ABOVE DIS CUSSION, WE DO NOT FIND ANY MERIT IN THIS APPEAL OF THE ASSESSEE. IT IS DISMIS SED. 8. IN THE RESULTS, APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE COURT ON 12 TH DECEMBER, 2019 AT AHMEDABAD. SD/- SD/- ( WASEEM AHMED ) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER
