Income Tax Officer, Hubli V. M/s.Poojya Shri Mahantappa Credit Co-op Society Ltd., Dharwad

ITA 577/BANG/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5371 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 14-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWAPNA DAS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-B BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.577/BANG/2017 ASSESSMENT YEAR : 2012-13 THE INCOME TAX OFFICER, WARD - 2(2), HUBBALLI. VS. M/S. POOJYA SHRI. MAHANTAPPA CREDIT CO-OP SOCIETY LTD., SF-6, OSWAL TOWER, DHARWAD. PAN : AACAP3887F APPELLANT RESPONDENT REVENUE BY : SMT. SWAPNA DAS, JCIT ASSESSEE BY : SHRI. PRANAV KRISHNA, ADVOCATE DATE OF HEARING : 16.05.2017 DATE OF PRONOUNCEMENT : 19 . 0 5 .201 7 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF CIT(A), INTERALIA, ON THE FOLLOWING GROUND: 1. WHETHER, ON FACT AND CIRCUMSTANCES OF THE CASE A ND IN LAW, THE LD. CIT(A), HUBBALLI WAS JUSTIFIED IN LAW IN HOLDING TH AT THE ASSESSEE SOCIETY IS ENTITLED TO DEDUCTION UNDER SECTION 80P( 2)(A)(I) OF THE INCOME TAX ACT EVEN WHEN THE ASSESSEE-SOCIETY IS MAINLY IN VOLVED IN EXTENDING ITA NO. 577/BANG/2017 PAGE 2 OF 4 CREDIT FACILITIES TO ITS MEMBERS WHICH IS IN THE NA TURE OF A BANK TRANSACTION, TREATED ON PART WITH THE NEW CLAUSE IN TRODUCED IN THE DEFINITION OF INCOME IN SECTION 2(24)(VIIA) OF THE ACT AND COMES UNDER THE PURVIEW OF SECTION 80P(4) W.E.F. 01.04.2007. 2. DURING THE COURSE OF HEARING, THE LEARNED COUNSEL F OR THE ASSESSEE INVITED OUR ATTENTION TO THE ORDER OF THE CIT(A) WITH THE SUBMISSION THAT CIT(A) HAS ADJUDICATED THE ISSUE FO LLOWING THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CA SE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD., VS ITO, SHRI. BILURU GURUBASAVA SAHAKARI SANGH NIYAMIT, BAGALKOTE AND BE LGAUM MERCHANTS CO-OP CREDIT SOCIETY LTD., VS. CIT. BESI DES CIT(A) HAS ALSO FOLLOWED THE OTHER JUDGMENTS OF DIFFERENT HIGH COURTS IN THIS REGARD. SINCE THE CIT(A) HAS DECIDED THE ISSUE IN THE LIGHT OF THE JUDGMENT OF JURISDICTIONAL HIGH COURT, NO INTERFERE NCE THEREIN IS CALLED FOR. 3. THE LEARNED DR, ON THE OTHER HAND, HAS SUBMITTED THAT THE AO WHILE MAKING THE DISALLOWANCE UNDER SECTION 80P CLA IMED BY THE ASSESSEE HAS TAKEN INTO ACCOUNT THE DISTINGUISHED F ACTS AND THE BYE LAWS OF THE COOPERATIVE SOCIETIES. SINCE THE ASSESSEE W AS ENGAGED IN ITA NO. 577/BANG/2017 PAGE 3 OF 4 BANKING ACTIVITIES, THE AO DISALLOWED THE DEDUCTION CLAIMED UNDER SECTION 80P(2)(A)(I) OF THE INCOME TAX ACT. 4. HAVING CAREFULLY EXAMINED THE ORDERS OF THE AUTH ORITIES BELOW, IN THE LIGHT OF RIVAL SUBMISSIONS, WE FIND THAT THE ASSESSEE IS A COOPERATIVE SOCIETY REGISTERED UNDER COOPERATIVE SO CIETIES ACT WHICH CLAIMED DEDUCTION UNDER SECTION 80P ON AN INCOME BY WAY OF INTEREST EARNED FROM ITS MEMBERS ON THE LOAN ADVANCED TO THE M. THE AO DENIED THE DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE ACT CLAIMED BY THE ASSESSEE ON THE GROUND THAT THE ASSESSEE IS ENG AGED IN BANKING ACTIVITIES. BUT THE CIT(A) RE-EXAMINED THE CLAIM O F THE ASSESSEE IN THE LIGHT OF THE JUDGMENT OF JURISDICTIONAL HIGH COURT AS WELL AS JUDGMENTS OF HONBLE GUJARAT HIGH COURT AND WAS OF THE VIEW T HAT THE ASSESSEES INCOME EARNED IN THE COURSE OF PROVIDING CREDIT FAC ILITIES TO ITS MEMBERS IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80P (2)(A)(I) OF THE ACT. DURING THE COURSE OF HEARING, THE LEARNED DR COULD NOT SPECIFICALLY POINT OUT ANY SPECIFIC DEFECT IN THE ORDER OF THE C IT(A). SINCE THE CIT(A) DECIDED THE ISSUE FOLLOWING THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT, I FIND NO INFIRMITY THER EIN. ACCORDINGLY, I CONFIRM HIS ORDER. ITA NO. 577/BANG/2017 PAGE 4 OF 4 5. IN THE RESULT, THE APPEAL OF THE REVENUE STAND D ISMISSED. PRONOUNCED IN THE OPEN COURT ON 19 TH MAY, 2017. SD/- (SUNIL KUMAR YADAV) JUDICIAL MEMBER BANGALORE. DATED:19 TH MAY, 2017. /NSHYLU/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.