Income Tax Officer, Lakhimpur-Kheri V. M/s Sahakari Ganna Vikas Samiti Ltd., Lakhimpur-Kheri

ITA 544/LKW/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 75148 (ITAT-LUCKNOW)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2014
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 05-02-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 01-11-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VIVEK MISHRA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B , LUCKNOW BEFORE SHRI S UNIL KUMAR YADAV , JUDICIAL MEMBER AND SHRI. A. K. GARODIA , ACCOUNTANT MEMBER ITA NO. 544/LKW/2012 ASSESSMENT YEAR: 2009 - 10 INCOME TAX OFFICER WARD I, LAKHIMPUR KHERI V. M/ S SAHAKAI GANNA VIKAS SAMITI LTD., PALIA KALAN LAKHIMPUR KHERI PAN: AADTS7551B (APP ELL ANT) (RESPONDENT) ITA NO.744/LKW/2013 ASSESSMENT YEAR: 2010 - 11 INCOME TAX OFFICER WARD I, LAKHIMPUR KHERI V. M/S SAHAKAI GANNA VIKAS SAMITI LTD., PALIA KALAN L AKHIMPUR KHERI PAN: AADTS7551B (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI. VIVEK MISHRA, CIT (DR) RESPONDENT BY: SHRI. SHUBHAM RASTOGI DATE OF HEARING: 05.02.2014 DATE OF PRONOUNCEMENT: 07.02.2014 O R D E R PER SUNIL KUMAR YADAV: THESE APPEALS ARE PREFERRED BY THE REVENUE AGAINST THE RESPECTIVE ORDERS OF THE LD. CIT(A) ON AN IDENTICAL GROUND , WHICH IS AS UNDER: - : - 2 - : 1 . THAT THE LD. CIT(A) IS NOT JUSTIFIED IN DELETING THE ADDITION OF ` 1,16,53,053 PLACING RELIANCE OF THE JUDGMENT OF THE HON'BLE I TAT LUCKNOW IN A.NO.124/LUK/2007, A.NO.125/LUK/2007 AND A.NO.127/LUK/2007 AS THE HON'BLE SUPREME COURT IN THE CASE OF TOTGARS COOPEATIVE SALE SOCIETY LIMITED 322 ITR 283 (SC) 2010 HAS HELD THAT THE ADDITION WAS MADE AS INTEREST FROM POST OFFICE AND NATIONA LIZED BANK (OTHER THAN COOPERATIVE BANK) AND THE ASSESSEE FAILED TO PROVE WITH SUPPORTING DOCUMENTARY EVIDENCE THAT INTEREST INCOME WAS EXCLUSIVELY DERIVED FROM DEPOSITS IN THE SAVING BANK ACCOUNT AND NOT FROM LONG TERM DEPOSITS MADE FOR LONG TERM INVESTME NTS OUT OF SURPLUS FUNDS TO EARN INTEREST INCOME WHICH DOES NOT QUALIFY FOR DEDUCTION UNDER SECTION 80P(2)(D) OF THE INCOME - TAX ACT, 1961 AND THEREFORE TH E ADDITION WAS RIGHTLY MADE BY THE ASSESSING OFFICER AS THE FACTS OF THE INSTANT CASE ARE DIFFERENT FR OM THE CASE LAW CITED BY THE ASSESSEE. MOREOVER, ON THE SAME ISSUE THE MATTER IS PENDING BEFORE THE HON'BLE HIGH COURT IN THE CASE OF M/S KHERI PILIBHIT SAHKARI GANNA VIKAS SAMITI LIMITED, LAKHIMPUR KHERI. 2 . DURING THE COURSE OF HEARING, THE LD. CIT (D.R.) HAS INVITED OUR ATTENTION THAT THE LD. CIT(A) HAS ALLOWED RELIEF TO THE ASSESSEE BY HOLDING THAT INTEREST EARNED FROM BANKS AND POST OFFICE ON FDRS IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80P OF THE INCOME - TAX ACT, 1961 (HEREINAFTER REFERRED IN SHORT 'THE ACT') WITHOUT LOOKING INTO THE FACT THAT THE ASSESSEE HAS MADE DEPOSITS IN FDRS OUT OF HIS SURPLUS FUNDS. THEREFORE, THE INTEREST EARNED ON THE DEPOSIT OUT OF SURPLUS FUNDS IS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80P OF THE ACT. 3 . THE LD. COUNSEL FOR T HE ASSESSEE HAS PLACED RELIANCE UPON THE ORDER OF THE TRIBUNAL IN THE CASE OF CO - OPERATIVE CANE DEVELOPMENT : - 3 - : COUNCIL, BHERA IN ITA NOS. 124,125,127 & 129/LUC/2007 AND ALSO THE JUDGMENT OF THE HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CO - OPERATIVE CANE DEV ELOPMENT UNION , IN SUPPORT OF HIS CONTENTION. IT WAS FURTHER CONTENDED ON BEHALF OF THE ASSESSEE THAT WHATEVER MONEY WAS DEPOSITED IN FDRS, IT WAS ON ACCOUNT OF THE GUIDELINES OF THE RESERVE BANK OF INDIA ( RBI ) AND ALSO AS PER THE STATUTORY REQUIREMENT . THEREFORE, NO SURPLUS FUNDS WERE DEPOSITED WITH THE BANK ON WHICH INTEREST WAS EARNED. 4 . HAVING GIVEN A THOUGHTFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND THE ORDERS OF THE LOWER AUTHORITIES, WE FIND THAT THE ASSESSEE MADE DEPOSITS IN FDRS IN DIFFERENT BA NKS AND POST OFFICES BUT NO EVIDENCE IS PLACED ON RECORD TO JUSTIFY THAT THE DEPOSITS WERE MADE AS PER THE STATUTORY REQUIREMENT OR UNDER THE GUIDELINES OF THE RBI OR ON ACCOUNT OF COMMERCIAL EXIGENCY. BUT THIS ASPECT WAS NEVER EXAMINED BY THE ASSESSING O FFICER. WE ARE, THEREFORE, OF THE VIEW THAT THIS ISSUE REQUIRES A FRESH ADJUDICATION BY THE ASSESSING OFFICER TO FIND OUT AS TO HOW MUCH AMOUNT WAS INVESTED IN FDRS AS PER THE STATUTORY REQUIREMENT OR ON ACCOUNT OF RBI GUIDELINES, ETC AND HOW MUCH SURPLUS FUND WAS INVESTED IN FDRS. THE ASSESSING OFFICER IS REQUIRED TO BIFURCATE THE DEPOSITS AND THE INTEREST EARNED ON THE FDRS PURCHASED ON ACCOUNT OF STATUTORY REQUIREMENTS IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80P OF THE ACT, BUT THE INTEREST EARNED ON S URPLUS DEPOSIT IN FDRS WOULD NOT BE ELIGIBLE FOR DEDUCTION UNDER SECTION 80P OF THE ACT. THIS ASPECT IS REQUIRED TO BE EXAMINED BY THE ASSESSING OFFICER. WE ACCORDINGLY SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER TO THE ASSESSING OFFICER WITH A DIRECTION TO RE - ADJUDICATE THE ISSUE AFRESH IN TERMS INDICATED ABOVE. 5 . IN ITA NO. 544/LKW/2012, THE OTHER GROUND RAISED BY THE REVENUE RELATES TO THE ADDITION MADE ON ACCOUNT OF DISALLOWANCE OF P.F. DEDUCTED BUT NOT PAID WITHIN THE DUE DATE. THE FI NDINGS OF THE LD. CIT(A) IN : - 4 - : THIS REGARD WAS IN FAVOUR OF THE REVENUE, THEREFORE, THIS GROUND DOES NOT EMANATE FROM THE ORDER OF THE LD. CIT(A) AND HENCE THE SAME IS DISMISSED . 6 . IN THE RESULT, APPEAL OF THE REVENUE IN ITA NO. 744/LKW/2013 IS ALLOWED FOR STAT ISTICAL PURPOSES AND ITA NO. 544/LKW/2012 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 7.2.2014. SD/ - SD/ - [ A. K. GARODIA ] [ S UNIL KUMAR Y ADAV ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 7.2.2014 JJ: 0602 COPY FOR WARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT(A) 4 . CIT 5 . DR ASSISTANT REGISTRAR