ITO, Jaipur V. RAJSTHAN RAJYA SHAKARI BHOOMI VIKAS BANK LTD., Jaipur

ITA 488/JPR/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99502 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 4 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 26-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PUROSHOTTAM KASHYAP
• Assessee Lawyers: SANJAY GHIYA

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH FOE FLAG ;KN O] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI VIKRAM SINGH YA DAV, AM VK;DJ VIHY LA- @ ITA NO. 488/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2009-10 INCOME TAX OFFICER, WARD 6(2), JAIPUR. CUKE VS. M/S RAJASTHAN RAJYA SAHAKARI BHOOMI VIKAS BANK LIMITED, POST BOX NO. 55, NEHRU SAHAKAR BHAWAN, BAIS GODOWN, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: AAAAR 5761 J VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT VK;DJ VIHY LA- @ ITA NO. 460/JP/2014 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2009-10 M/S RAJASTHAN RAJYA SAHAKARI BHOOMI VIKAS BANK LIMITED, POST BOX NO. 55, NEHRU SAHAKAR BHAWAN, BAIS GODOWN, JAIPUR. CUKE VS. INCOME TAX OFFICER, WARD 6(2), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO.: AAAAR 5761 J VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT JKTLO DH VKSJ LS @ REVENUE BY : SHRI PUROSHOTTAM KASHYAP (ADDL. CIT) FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI SANJAY GHIYA (CA) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 09/11/2015 MN?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 10/11/2015 ITA 488 & 460/JP/2014, ITO VS M/S RAJASTHAN RAJYA SAHAKARI BHOOMI VIAKS BANK LTD. 2 VKNS'K @ ORDER PER: R.P. TOLANI, J.M. THESE ARE CROSS APPEALS ONE BY THE REVENUE AND ANOT HER BY THE ASSESSEE ARE AGAINST THE ORDER DATED 03/04/2014 PAS SED BY THE LEARNED CIT(A)-II, JAIPUR FOR A.Y. 2009-10. RESPECTIVE GROUN DS OF BOTH THE APPEALS ARE AS UNDER:- GROUNDS OF REVENUES APPEAL 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD CIT(A) HAS ERRED IN DIRECTING TO AL LOW CLAIM OF PROPORTIONATE EXPENSES AGAINST THE INTERES T INCOME AND MISCELLANEOUS INCOME EVEN WHEN THESE ARE NO DIRE CT NEXUS OF EXPENSES WITH INCOME EARNED. GROUNDS OF ASSESSEES APPEAL 1. THE CIT(A)-II WAS WRONG, ILLEGAL, ARBITRARY AND U NJUSTIFIED IN DISALLOWING THE CLAIM OF THE ASSESSEE U/S 80P IN RESPECT OF THE FOLLOWING: A) INTEREST OF ADVANCE GIVEN TO STAFF RS. 17,07,067/- B) MISCELLANEOUS INCOME RS. 41,944/-. 2. LEARNED COUNSEL FOR THE ASSESSEE CONTENDS THAT B OTH THE ISSUES IN QUESTION WERE EARLIER HELD IN FAVOUR OF THE ASSESSEE BY THE HONBLE ITAT ORDER FOR A.Y. 2005-06 AND EARLIER ORDERS. SUBSEQUE NTLY, THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT, JODHPUR VS SIROHI SAHKARI BHOOMI VIKAS BANK LTD., SIROHI IN DBIT APPEAL NOS. 3 1/2007, 105/2006 ITA 488 & 460/JP/2014, ITO VS M/S RAJASTHAN RAJYA SAHAKARI BHOOMI VIAKS BANK LTD. 3 & 56/2007 BY ORDER DTD. 4-9-2008 HAS DECIDED THE IS SUE RAISED IN GROUND NO. 1 AGAINST THE ASSESSEE BY FOLLOWING OBSER VATIONS:- IN OUR VIEW , AN ADVANCEMENT OF LOAN TO THE EMPLOYE ES WAS NOT IN THE CAPACITY OF THE BANKER, BUT WAS IN THE CAPACI TY OF IT BEING AN EMPLOYER TO ITS EMPLOYEES, IN THE FORM OF LOAN A GAINST PF DEPOSITS AND THE LOAN FOR HOUSE BUILDING. ADMITTEDL Y, INTEREST IN QUESTION HAS BEEN RECEIVED FROM THE EMPLOYEES WHO AR E NOT ITS MEMBERS. . THE NET RESULT OF THE AFORESAID DISCUSSION IS THA T SUBSTANTIAL QUESTION INVOLVED IS REQUIRED TO BE AND IS, ANSWERED AGAINST THE ASSESSEE, AND IN FAVOUR OF THE REVENUE, AND IT IS H ELD, THAT THE AMOUNT OF INTEREST EARNED BY THE ASSESSEE ON VARIOU S LOANS EXTENDED TO ITS EMPLOYEES, ON PF AND HOUSE BUILDING LOAN, IS NOT ELIGIBLE TO BE EXEMPTED U/S. 80P(A)(I). THE HON'BLE HIGH COURT HAS DECIDED THE GROUND NO. 2 STANDS COVERED IN FAVOUR OF THE ASSESSEE BY EARLIER ITAT ORDERS, AS O BSERVED BY LD. CIT(A). 3. APROPOS REVENUES GROUND, THE LD CIT(A) RIGHTLY HELD THAT THE ASSESSEE IS ELIGIBLE FOR PROPORTIONATE EXPENSES ON INCOME, WHICH DOES NOT FALL UNDER EXEMPTION U/S 80P(2) OF THE INCOME TA X ACT, 1961 (IN SHORT THE ACT) BY FOLLOWING OBSERVATIONS:- ITA 488 & 460/JP/2014, ITO VS M/S RAJASTHAN RAJYA SAHAKARI BHOOMI VIAKS BANK LTD. 4 SECOND GROUND OF THE APPELLANT IS AGAINST A.OS OR DER IN NOT ALLOWING PROPORTIONATE EXPENDITURE ON THE INCOME TRE ATED AS TAXABLE. SINCE APPELLANT HAD NOT BROUGHT ANY EVIDEN CE ON RECORD TO PROVE THAT SOCIETY HAD SEPARATE ESTABLISHMENTS T O MANAGE THE INCOME FROM ADVANCE TO STAFF, NO EXPENDITURE WAS ALL OWED AGAINST THIS INCOME. APPELLANT SUBMITTED THAT ASSES SING OFFICER REJECTED DEDUCTION UNDER SECTION 80P(2) WITHOUT DEDU CTING EXPENSES ATTRIBUTABLE TO SUCH INCOME. APPELLANT SUB MITTED THAT IN ASSESSMENT YEAR 2006-07, ITAT BY ORDER DATED 26/ 08/2011, SET ASIDE THE ISSUE TO THE FILE OF A.O. TO ALLOW THE CLAIM OF EXPENSE. APPELLANT FURTHER STATED THAT ASSESSING OF FICER WHILE PASSING ASSESSMENT ORDER FOR ASSESSMENT YEAR 2010-1 1 HIMSELF ALLOWED PROPORTIONATE EXPENSES OUT OF TAXABLE INCOM E. SINCE ASSESSING OFFICER MADE ADDITION IN RESPECT OF ENTIR E INTEREST RECEIVED ON STAFF ADVANCES AND MISCELLANEOUS INCOME , THE SAME IS NOT THE INCOME BUT GROSS RECEIPT. APPELLANT CLAI MED DEDUCTION IN RESPECT OF INCOME, THE PART OF WHICH WAS CONSIDE RED TO BE NOT ALLOWABLE UNDER SECTION 80P, THEREFORE, THE DISALLOWA NCE HAS TO BE IN RESPECT OF INCOME ONLY AND NOT OF GROSS RECEI PT. WHEN EXPENDITURES ARE DEDUCTED FROM THE GROSS RECEIPT, I NCOME IS ARRIVED AT. IN THE CASE OF COMMON EXPENSES, EXPENSE S ARE WORKED OUT ON PROPORTIONATE BASIS. SINCE ASSESSING O FFICER HIMSELF ALLOWED PROPORTIONATE EXPENSES BEFORE DISALL OWING CLAIM OF DEDUCTION UNDER SECTION 80P IN ASSESSMENT YEAR 2010-11 AND ITAT IN PRINCIPAL ALLOWED CLAIM OF EXPENSES OUT OF TH ESE INCOME, ASSESSING OFFICER IS DIRECTED TO ALLOW PROPORTIONATE EXPENSES ITA 488 & 460/JP/2014, ITO VS M/S RAJASTHAN RAJYA SAHAKARI BHOOMI VIAKS BANK LTD. 5 BEFORE DISALLOWING CLAIM UNDER SECTION 80P IN RESPEC T OF INTEREST OF STAFF ADVANCES AND MISCELLANEOUS INCOME. THIS GRO UND IS ACCORDINGLY ALLOWED. 4. LD COUNSEL FOR THE ASSESSEE CONTENDS THAT THE IS SUE OF PROPORTIONATE EXPENSES HAVE BEEN ALLOWED BY THE ITO I N ASSESSEES OWN CASE FOR THE A.Y. 2010-11 AS WELL AS IN CIT(A) FOR A.Y. 2008-09 AND A.Y. 2011-12. AS REGARDS CALCULATION OF PROPORTIONA TE EXPENDITURE ARE CONCERNED LEARNED ITAT HAS CLEARLY LAID DOWN GUIDELIN ES IN OUR CASE WITH RESPECT TO A.Y. 1978-79 AND 81-82 DATED 30/06/1 986, WHICH WAS FOLLOWED BY CIT(A) IN A.Y. 2009-10. 5. THE LD DR IS HEARD. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD. RESPE CTFULLY FOLLOWING HONBLE RAJASTHAN HIGH COURT IN SIROHI SAHKARI BHOO MI VIKAS BANK (SUPRA) GROUND NO ONE OF THE ASSESSEE IS DISMISSED. FOLLOWING ITAT ORDERS IN ASSESSEES OWN CASE GROUND NO. 2 IS ALLOWED . 7. APROPOS REVENUE APPEAL, IN OUR CONSIDERED VIEW TH E DENIAL OF DEDUCTION U/S 80P(2) MEANS DENIAL OF NET INCOME & N OT GROSS INCOME. THIS CORRECT POSITION IS WELL SETTLED IN ASSESSEES O WN CASE BY ITAT ITA 488 & 460/JP/2014, ITO VS M/S RAJASTHAN RAJYA SAHAKARI BHOOMI VIAKS BANK LTD. 6 ORDER IN A.Y. 1978-79, 1981-82 AND 2006-07, WHICH H AS BEEN FOLLOWED BY THE LD CIT(A). CONSEQUENTLY, WE SEE NO INFIRMITY I N THE ORDER OF THE LD CIT(A) IN DIRECTING THE ASSESSING OFFICER TO ALLO W PROPORTIONATE EXPENSES QUA GROUND NO.1 OF THE ASSESSEE I.E. INTER EST ON ADVANCE GIVEN TO STAFF ON THE BASIS OF FORMULA LAID DOWN BY THE ITAT. THIS GROUND OF REVENUE IS DISMISSED. 8. IN THE RESULT, THE ASSESSEE APPEAL IS PARTLY ALL OWED AND REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 01/11/2015. SD/- SD/- FOE FLAG ;KNO VKJ-IH-RKSYKUH (VIKRAM SINGH YADAV) (R.P.TOLANI) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 10 TH NOVEMBER, 2015 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- THE ITO, WARD 6(2), JAIPUR. 2. IZR;FKHZ @ THE RESPONDENT- M/S RAJASTHAN RAJYA SAHAKARI BHOOMI VIKAS BANK LIMITED, JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDR @ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 488 & 460/JP/2014) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR