Income Tax Officer, Ward -2, Karwar., Karwar V. Suprabhat Credit Souharda Sahakari Ltd., Ankola

ITA 52/PAN/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93558 (ITAT-PANAJI)
• Duration Of Justice: 5 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 16-07-2015
• Assessment Year: 2012-2013
• Appeal Filed On: 13-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANAND SHANKAR MARATHE
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI N.S. SAINI , HONBLE ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, HONBLE JUDICIAL MEMBER ITA NO. 5 2/PNJ/201 5 (ASST. YEAR : 20 12 - 1 3 ) ITO, WARD - 2, KARWAR. VS. SUPRABHAT CREDIT SOUHARDA SAHAKARI LTD., JAI HIND LODGE ROAD, ANKOLA . PAN NO. AABAS 7089 M (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI OMKAR GODBOLE C A. DEPARTMENT BY : SHRI ANAND SHANKAR MARATHE - D R DATE OF HEARING : 1 6 / 0 7 /2015 . DATE OF PRONOUNCEMENT : 16 / 0 7 /201 5 . O R D E R PER N.S. SAINI , ACCOUNTANT MEMBER THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), MYSURU, DATED 13 / 11 /201 4 . 2. THE SOLE GROUND OF APPEAL TAKEN BY THE R EV E N UE IN THIS APPEAL IS THAT THE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN NOT CONSIDERING THE FACT THAT THE ASSESSEE IS DOING BANKING ACTIVITIES AND THE INCOME FROM BANKING ACTIVITIES IS NOT ELIGIBLE FOR EXEMPTION UNDER SEC. 80P. 3. BRIEF FACTS OF THE CASE ARE THAT DURING THE YEAR UNDER CONSIDERATION , ASSESSEE FILED THE RETURN OF INCOME SHOWING NIL INCOME AFTER CLAIMING DEDUCTION UNDER SEC. 80P(2)(A)(I) OF RS. 71,42,255/ - . THE ASSESSING OFFICER DISALLOWED THE CLAIM OF DEDUCTION UNDER SEC. 2 ITA NO. 52/PNJ/2015 80P(2)(A)(I) OF THE ACT TO THE ASSESSEE SINCE THE ASSESSEE SATISF Y THE CONDITIONS PRESCRIBED FOR TREATING IT AS A PRIMARY CO - OPERATIVE BANK IN ACCORDANCE WITH THE DEFINITION OF PART - V OF BANKING REGULATION ACT . THEREFORE, THE ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION UNDER SEC. 80P(2)(A)(I) OF THE ACT. 4 . ON APPEAL, THE COMMISSIONER OF INCOME TAX (APPEALS) ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SRI BILURU GURUBASAVA PATTINA SAHAKARI SANGHA NIYAMITHA, BAGALKOT IN I.T.A.NO. 5006 /2013 ORDER DATED 05/02/2014 BY OBSERVING AS UNDER: - 3.3 HOWEVER, NOW, DURING THE COURSE OF APPEAL PROCEEDINGS THE APPELLANT FILED THE DECISION OF HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF GENERAL INSURANCE EMPLOYEES CREDIT CO - OPERATIVE SOCIETY IN ITA NO. 273/2013 WHEREIN, IT IS HELD BY HONBLE HIGH COURT THAT THE APPELLANT IS ENTITLED FOR DEDUCTION/S 80P(2)(A)(I) ON THE SAME ET OF FACTS RELYING ON THE DECISION OF HONBLE KARNATA KA HIGH COURT IN ITA NO. 5006/2013 DATED 05 - 02 - 2014 IN THE CASE OF THE COMMISSINER OF INCOME TAX VS SRI BILURU GURUBASAVA PATTINA SAHAKARI SANGHA NIYAMITHA, BAGALKOT, WHEREIN, AFTER REFERRING TO THE RELEVANT PROVISIONS OF THE INCOME TAX ACT, AND THE BAKING REGULATION ACT, IT WAS HELD AS UNDER: - IF A CO - OPERATIVE BANK IS EXCLUSIVELY CARRYING BANKING BUSINESS, THEN THE INCOME DERIVED FROM THE SAID BUSINESS CANNOT BE DEDUCTED IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE. THE SAID INCOME IS LIABLE FOR TAX. A CO - OPERATIVE BANK AS DEFINED UNDER THE BANKING REGULATION ACT INCLUDES THE PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY COOPERATIVE AGRICULTURAL RURAL DEVELOPMENT BANK. THE LEGISLATURE DID NOT WANT TO DENY THE SAID BENEFIT TO A PRIMARY AGRICULTURAL CR EDIT SOCIETY OR A PRIMARY CO - OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT BANK. THEY DID NOT WANT TO EXTEND THE SAID BENEFIT TO A CO - OPERATIVE BANK WHICH IS EXCLUSIVELY CARRYING ON BANKING BUSINESS I.E. THE PURPORT OF THE AMENDMENT. IF THE ASSESSEE IS NOT A CO - OPERATIVE BANK CARRYING ON EXCLUSIVELY BANKING BUSINESS AND IF IT DOES NOT POSSESS A LICENSE FROM THE RESERVE BANK OF INDIA TO CARRY ON BUSINESS THEN IT IS NOT A COOPERATIVE BANK. IT IS A CO - OPERATIVE SOCIETY WHICH ALSO CARRIES ON THE BUSINESS OF LEND ING MONEY TO ITS MEMBERS WHICH IS COVERED UNDER SECTION 80P(2)(A)(I) I.E. CAR RY ING ON THE BUSINESS OF BANKING FOR PROVIDING CREDIT FACILITATES TO ITS 3 ITA NO. 52/PNJ/2015 MEMBERS. THE OBJECT OF THE AFORESAID AMENDMENT IS NOT TO EXCLUDE THE BENEFIT EXTENDED UNDER SECTION 80P(I) TO THE SOCIETY. 5. THE DEPARTMENTAL REPRESENTATIVE SUPPORTED THE ORDER OF THE ASSESSING OFFICER WHILE AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUPPORTED THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS). 6 . WE FIND THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ALLOWED THE CLAIM FOR DEDUCTION UNDER SEC. 80P(2)(A)(I) OF THE ACT OF RS. 71,42,255/ - BY FOLLOWING THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CA S E OF SRI BILURU GURUBASAVA PATTINA SAHAKARI SANGHA NIYAMITHA, BAGALKOT (SUPRA) . NO CONTRARY DECISION WAS CITED BY THE DEPARTMENTAL REPRESENTATIVE . T HEREFORE , WE FIND NO GOOD REASON TO INTERFERE WITH THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) WHICH IS HEREBY CONFIRMED AND THE GROUND OF APPEAL OF THE REVENUE IS DISMISSED. 7 . IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE HEARING ON THURSDAY , THE 1 6 TH DAY OF JULY , 201 5 AT GOA . S D / - S D / - (GEORGE MATHAN) (N.S.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 1 6 TH JU LY , 201 5 . VR/ - COPY TO: 1 . THE ASSESSEE. 2 . THE REVENUE. 3 . THE CIT 4 . THE CIT(A) 5 . THE D.R 6 . GUARD FILE. BY ORDER 4 ITA NO. 52/PNJ/2015 DATE INITIAL ORIGINAL DICTATION PAD IS ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 1 6 .0 7 .2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 17 .07 .2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 17 /07 /2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 17 /0 7 /2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 17 /07 /2015 SR.PS 6. DATE OF PRONOUNCEMENT 16 /0 7 /2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 1 7 /07 /2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER