Income Tax Officer, Tumkur V. M/s.Panduranga Credit Co-operative Society Ltd., Tumkur

ITA 578/BANG/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5342 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 14-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWAPNA DAS
• Assessee Lawyers: RAVINDRA T

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.578/BANG/2017 ASSESSMENT YEAR : 2009-10 THE INCOME TAX OFFICER, WARD - 4, TUMAKURU. VS. M/S. PANDURANGA CREDIT CO- OPERATIVE SOCIETY LTD., MANDIPET, TUMAKURU-572102. PAN : AAAAP5494L APPELLANT RESPONDENT REVENUE BY : SMT. SWAPNA DAS , JCIT ASSESSEE BY : SHRI. RAVINDRA T, CA DATE OF HEARING : 18.05.2017 DATE OF PRONOUNCEMENT : 26 . 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. THE ORDER OF THE LEARNED CIT(A) IS OPPOSED TO LAW A ND FACTS OF THE CASE. ITA NO. 578/BANG/2017 PAGE 2 OF 4 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) WAS JUSTIFIED IN LAW IN ALLOWING DEDUCTION U/S.80P(2)(A)(I) OF THE ACT TO THE CO-OPERATIVE SOCIETY CARRYING ON THE BUSINESS OF BAKING, INSPITE OF THE FACT THAT CLAUSE NO.(4) OF SECTION 80P INSERTED WITH EFFECT FROM 01.04.2007 CL EARLY BARS THE CO- OPERATIVE SOCIETY FROM THE ABOVE DEDUCTION, OTHER T HAN A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO-OPERATI VE AGRICULTURAL AND RURAL DEVELOPMENT BANK'. 3. WHETHER THE CIT(A) IS CORRECT IN LAW IN FOLLOWING T HE DECISION OF THE ITAT IN ASSESSEE'S OWN CASE FOR AY 2010-11, AGAINST WHICH F URTHER APPEAL HAS BEEN FILED BY THE DEPARTMENT BEFORE THE HON'BLE HIGH COU RT?' 4. THE CIT(A) HAS ERRED IN FOLLOWING THE JUDGMENTS OF JURISDICTIONAL HIGH COURT, DHARWAD BENCH IN THE CASE OF SRI BILURU GURUBASAVA PATTINA SAHAKARI SANGHA NIYAMITHA, BAGALKOT IN ITA NO. 5006/2013, WHICH HAS NOT BECOME FINAL SINCE THE SOME HAS NOT BEEN ACCEPTED BY THE DEPARTMENT AND RE VIEW PETITION IS PENDING BEFORE THE HON'BLE HIGH COURT?' 5. FOR THESE AND OTHER GROUNDS THAT MAY BE URGED AT TH E TIME OF HEARING, IT IS PRAYED THAT THE ORDER OF THE CIT(A) IN SO FOR AS IT RELATES TO THE ABOVE GRO UNDS MAY BE REVERSED AND THAT OF THE ASSESSING OFFICER M AY BE RESTORED. 6. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND AND/OR DELETE ANY OF THE GROUNDS MENTIONED ABOVE. 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 ITA NO. 578/BANG/2017 PAGE 3 OF 4 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 OF THE DEDUCTION UNDE R SECTION 80P, HAS TAKEN INTO ACCOUNT THE DISTINGUISHED FACTS AND THE BYE LAWS OF THE COOPERATIVE SOCIETIES. SINCE THE ASSESSEE WAS ENGA GED IN 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 AND HAS CLAIMED DEDUCTION UNDER SECTION 80P, ON AN INCOME B Y 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 ITA NO. 578/BANG/2017 PAGE 4 OF 4 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. 5. IN THE RESULT, THE APPEAL OF THE REVENUE STAND D ISMISSED. PRONOUNCED IN THE OPEN COURT ON 26 TH MAY, 2017. SD/- ( SUNIL KUMAR YADAV ) JUDICIAL MEMBER BANGALORE. DATED: 26 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.