Mahoba Urban Co-operative Bank Ltd., Mahoba V. Income Tax Officer-6(3), Banda.

ITA 492/LKW/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 5146 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 3 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 14-07-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 10-09-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Assessee Lawyers: B P YADAV

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 492/LKW/2012 ASSESSMENT YEAR: 2004 - 05 MAHOBA URBAN CO - OPERATIVE BANK LTD. MAHOBA V. IN COME TAX OFFICER 6(3) BANDA PAN: AAAJM1205F (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. B. P. YADAV, ADVOCATE RESPONDENT BY: SHRI. ALOK MITRA, D.R. DATE OF HEARING: 14 0 7 2014 DATE OF PRONOUNCEMENT: 16 0 7 2014 O R D E R PER SUNIL KUMAR YADAV : THIS APPEAL IS PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT(A), INTER ALIA, ON THE FOLLOWING GROUNDS: - 1 . THE ORDER PASSED BY THE CIT (APPEALS) IS ARBITRARY, UNJUSTIFIED AND AGAINST THE FACTS OF THE CASE. 2 . THIS IS THE SETTLED LAW OF THE LAND THAT IN VIEW OF THE HON'BLE SUPREME COURT DECISION 'CIT VS. NAWANSHAHAR CENTRAL CO - OPERATIVE BANK LTD [2007] 289 ITR 6 (SC)]', IT HAS TO BE HELD THAT THE ASSESSEE IS ENTITLED TO DEDUCTION U/S 80 P ON ALL ITS INCOME DERIVED FROM ITS EVERY INVESTMENT ACTIVIT IES. 3 . THE INCOME ADDED IS NOT REALIZABLE AND IS FROM THE BANK WHICH HAS ALREADY WENT INTO LIQUIDATION. 4 . THE A.O HAS NOT ALLOWED THE DEDUCTION U/S 80P(2)(A)(I) OF THE PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 2 - : I.T . ACT, 1961 MADE FROM NON - SLR INVESTM ENT TO THE TUNE OF RS. 2,32,168/ - (THE ASSESSING AUT HORITY ESTIMATED IT RS. 4,28,550/ - ) WITHOUT ANY BASIS. 5 . THE APPELLANT COULD NOT EARN INTEREST ON THE FIXED AMOUNT WITH CITY CO - OPERATIVE BANK LTD LUCKNOW, IN VIEW OF DIRECTION ISSUED BY THE RESERVE BANK OF INDIA, DEBITING OF INTEREST AMOUNT IN PROFIT & LOSS A/C DOES NOT ARISE. BUT IT APPEARS THE ATTENTION OF ASSESSING AUTHORITY ESCAPE TO THIS EFFECT WHILE ARRIVING T OTHERWISE CONCLUSION. 2 . DURING THE COURSE OF HEARING OF THE APPEAL, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION THAT THE ISSUE INV OLVED IN THIS APPEAL RELATES TO DISALLOWANCE OF DEDUCTION UNDER SECTION 80P (2) (A)(I) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED IN SHORT THE ACT') ON INTEREST FROM NON - SLR INVESTMENT. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THIS ISSUE IS SQUARELY COVERED BY THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. MUZAFFARNAGAR DISTRICT CO - OPERATIVE BANK LTD., 2012 - (ITI) - GJX - 1072 - ALL OR 2013(214) - TAXMAN - 0489 - ALL, IN WHICH THEIR LORDSHIPS HAVE HELD THAT THE QUESTION AS T O WHETHER BUSINESS IS DERIVED FROM OR ATTRIBUTABLE TO SLR OR NON - SLR FUNDS W OULD NOT MAKE ANY DIFFERENCE FOR THE P URPOSE OF QUALIFYING THE INTEREST EARNED BY THE CO - OPERATIVE BANK UNDER SECTION 80P(2)(A)(I) OF THE ACT, AS THE DEPOSITS OF SURPLUS IDLE MONEY AVAILABLE FROM WORKING CAPITAL, INCLUDING RESERVES, EXCESS COLLECTION OF INTEREST TAX AND OTHER INCOMES ARE ALL ATTRIBUTABLE TO THE BUSINESS ACTIVITIES OF THE BANK. THEIR LORDSHIPS HAVE FURTHER HELD THAT INTEREST ON NON - SLR FUNDS ARE ELIGIBLE FOR DEDUCTI ON UNDER SECTION 80P(2)(A)(I) OF THE ACT. 3 . THE LD. D.R., ON THE OTHER HAND, HAS SUBMITTED THAT THE LD. CIT(A) HAS DISMISSED THE APPEAL OF THE ASSESSEE EX - PARTE, THEREFORE, THE MATTER PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ ) : - 3 - : MAY BE RESTORED BACK TO THE FILE OF THE LD. CIT(A) FOR RE - ADJUDICATION OF THE ISSUE. 4 . HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND FROM A CAREFUL PERUSAL OF THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT REFERRED TO ABOVE , WE FIND THAT THE IMPUGNED ISSUE IS SQUARELY COVERED BY THE JUDGMENT OF THE HO N'BLE JURISDICTIONAL HIGH COURT. THEREFORE, NO PURPOSE WOULD BE SERVED IN RESTORING THE MATTER BACK TO THE FILE OF THE LD. CIT(A). FOLLOWING THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. MUZAFFARNAGAR DISTRICT CO - OPERATIVE BANK LTD. (SUPRA), WE HOLD THAT THE ASSESSEE IS ENTITLED FOR EXEMPTION UNDER SECTION 80P(2)(A)(I) OF THE ACT ON INTEREST RECEIVED ON DEPOSIT FROM NON - SLR FUNDS. ACCORDINGLY, THE ORDER OF THE LD. CIT(A) IS SET ASIDE AND THE APPEAL OF THE ASSESSEE IS ALLOWE D. 5 . IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16.7.2014. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 16 TH JU LY , 2014 JJ: 1407 COPY FORWARDED TO: 1 . APPELLAN T 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR PRINT TO PDF WITHOUT THIS MESSAGE BY PURCHASING NOVAPDF ( HTTP://WWW.NOVAPDF.COM/ )