Karmachari Co.Op.So.Ltd., Baroda V. The Addl.CIT.,Range-5, Ahmedabad

ITA 513/AHD/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 8593 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 6 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Ahmedabad
• Next Hearing Date: 19-06-2017
• Assessment Year: 2008-2009
• Appeal Filed On: 27-02-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: M J SHAH
• Keywords: Business income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI AMARIJIT SINGH, ACCOUNTANT MEMBER ITA NO. 513/AHD/2013 (ASSESSMENT YEAR: 2008-09) THE KARMACHARI COOPERATIVE CREDIT SOCIETY LTD., GROUND FLOOR, GAJANAND COMPLEX, NR. JAGDISH FARSAN HOUSE, RAMJI MANDIR POLE, OPP. GOVT. PRESS KOTHI, BARODA - 390001 APPELLANT VS. ASST. COMMISSIONER OF INCOME TAX, CIRCLE 5, BARODA R ESPONDENT PAN: AAAJK1038L /BY ASSESSEE : SHRI M. J. SHAH, A.R. /BY REVENUE : SHRI PRASOON KABRA, SR. D.R. /DATE OF HEARING : 08.09.2017 /DATE OF PRONOUNCEMENT : 14.09.2017 ORDER PER S. S. GODARA, JUDICIAL MEMBER THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2008-09 ARISES AGAINST THE CIT(A)-V, BARODAS ORDER DATED 03.12.2012, IN CASE NO. CAB/(A) V-181/10- 11, UPHOLDING ASSESSING OFFICERS ACTION DISALLOWIN G SECTION 80P DEDUCTION ITA NO. 513/AHD/13 [THE KARMACHARI CO-O. CREDIT SOC . LTD. VS. ACIT] A.Y. 2008-09 - 2 - IN RESPECT OF INTEREST INCOME OF RS.6,50,000/- ON F IXED DEPOSITS PARKED IN THE STATE BANK OF INDIA, IN PROCEEDINGS U/S. 143(3) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH SIDES. CASE FILE PERUSED. 2. RELEVANT FACTS ARE IN A VERY NARROW COMPASS. TH IS ASSESSEE IS A CO- OPERATIVE CREDIT SOCIETY. IT RAISED ITS IMPUGNED C LAIM OF DEDUCTION AMOUNTING TO RS.6,50,000/- QUA INTEREST INCOME DERIVED FROM S URPLUS FUNDS PARKED IN SBIS FIXED DEPOSITS SCHEME. THE ASSESSING OFFICER DISALLOWED THE SAME IN ASSESSMENT ORDER DATED 01.12.2010 AFTER CONCLUDING THAT THE ABOVE INTEREST INCOME WOULD NOT AMOUNT TO AN INCOME ELIGIBLE UNDER THE DEDUCTION PROVISION IN QUESTION. HE WAS OF THE VIEW THAT THE SAID INCOME CAME UNDER THE HEAD INCOME FROM OTHER SOURCES U/S.56 R.W.S. 57 OF THE ACT. THE CIT(A) CONFIRMS THE SAME IN HIS LOWER APPELLATE ORDER UNDE R CHALLENGE. 3. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO RI VAL SUBMISSIONS. THE DISPUTE IN QUESTION AS TO WHETHER A CO-OPERATIVE SO CIETIES INTEREST INCOME DERIVED FROM SURPLUS FUND PARKED IN A NATIONALIZED BANKS FIXED DEPOSIT SCHEME IS ENTITLED FOR THE IMPUGNED DEDUCTION OR NO T IS NO MORE RES INTEGRA IN VIEW OF HONBLE JURISDICTIONAL HIGH COURTS DECISIO N IN STATE BANK OF INDIA VS. CIT (2016) 389 ITR 578 (GUJ.). THEIR LORDSHIPS HOL D THAT SUCH AN INCOME IS NEITHER BUSINESS INCOME NOR DERIVED FROM INVESTMENT MADE IN ANOTHER CO- OPERATIVE SOCIETY. WE THEREFORE UPHOLD CIT(A)S AC TION AFFIRMING THE IMPUGNED DISALLOWANCE IN PRINCIPLE. MR. SHAH CONTE NDS THAT SPECIAL LEAVE PETITION PREFERRED AGAINST HONBLE JURISDICTIONAL H IGH COURTS DECISION STANDS ADMITTED IN HONBLE APEX COURT. WE ARE THEREFORE U RGED TO REMIT THE INSTANT ISSUE BACK TO THE ASSESSING OFFICER TO AWAIT FINAL OUTCOME THEREOF. WE FIND NO REASON TO ACCEPT THE INSTANT PLEA SINCE IT IS NO T THE ASSESSEE WHOSE LIS ON THE VERY ISSUE CAN BE HELD TO BE PENDING BEFORE THE HONBLE SUPREME COURT. ITA NO. 513/AHD/13 [THE KARMACHARI CO-O. CREDIT SOC . LTD. VS. ACIT] A.Y. 2008-09 - 3 - THERE IS NO OTHER MATERIAL POINTED OUT INDICATING A NY DISTINCTION ON FACTS OR LAW. 4. THE ASSESSEE AT THIS STAGE RAISES AN ALTERNATIVE PLEA THAT THE IMPUGNED DISALLOWANCE DESERVES TO BE COMPUTED AS PER NETTING FORMULA. WE FIND THAT A CO-ORDINATE BENCH DECISION IN ITO VS. THE ALARSA NA GRIK COOPERATIVE BANK SOCIETY LTD. IN ITA NO. 2072/AHD/2014 HAS ALREADY A CCEPTED SUCH A NETTING PLEA. WE THEREFORE ACCEPT ASSESSEES ALTERNATIVE P LEA AND DIRECT THE ASSESSING OFFICER TO FINALIZE NETTING EXERCISE AS PER LAW AFT ER AFFORDING ADEQUATE OPPORTUNITY OF HEARING. 5. THIS ASSESSEES APPEAL IS PARTLY ALLOWED FOR STA TISTICAL PURPOSES. [PRONOUNCED IN THE OPEN COURT ON THIS THE 14 TH DAY OF SEPTEMBER, 2017.] SD/- SD/- ( AMARIJIT SINGH ) ( S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL M EMBER AHMEDABAD: DATED 14/09/2017 TRUE COPY S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE 2 / ASSESSEE ! / CONCERNED CIT 4 !- / CIT (A) ( )*+ ,--. . /0 / DR, ITAT, AHMEDABAD 1 +23 / GUARD FILE. BY ORDER / . // . /0