MOLKIYA GRAM SEWA SAHKARI SAMITI LIMITED, AJMER V. INCOME TAX OFFICER, WARD-2-3, AJMER

ITA 597/JPR/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2311 (ITAT-JAIPUR)
• Duration Of Justice: 10 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 25-04-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: K.C. TATER
• Keywords: Set aside
• Section: 80P

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQ J IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH B , JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE : SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA-@ ITA NO. 597/JP/2019 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2016-17 MOLKIYA GRAM SEWA SAHAKARTI SAMITI LTD., MOLKIYA, TEHSIL: KEKRI DISTT.AJMER CUKE VS. THE ITO WARD- 2(3) AJMER LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AACAM 1922 C VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI P.C. PARWAL, CA & SHRI K.C. TATER, CA JKTLO DH VKSJ LS@ REVENUE BY : SHRI K.C. GUPTA , JCIT-DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 18/03/2020 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 19 /03/2020 VKNS'K@ ORDER PER VIJAY PAL RAO, JM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A), AJMER DATED 22-02-2019 FOR THE ASSESSMENT YEAR 2016-17. THE ASSESSEE HAS RAISED THE FOLLOWING GROUND. 1. THE LD. CIT(A) HAS ERRED IN MAKING DISALLOWANC E OF RS. 27,45,889/- U/S 80P OF THE I.T. ACT, 1961 AN D IN MAKING ADDITIONS THEREOF TO THE TOTAL INCOME OF THE ASSESSEE. ITA NO.597/JP/2019 MOLKIYIA GRAM SEWA SAHKARI SAMITI LTD. VS I TO , WARD- 2(3), AJMER 2 2.1 THE ONLY ISSUE IN THIS APPEAL IS REGARDING DISA LLOWANCE OF DEDUCTION CLAIMED U/S 80P OF THE I.T. ACT, 1961. 2.2 THE ASSESSEE IS A COOPERATIVE SOCIETY REGISTERE D UNDER COOPERATIVE SOCIETY ACT, 1953. THE ASSESSEE IS CARRYING ON THE BUSINESS OF BANKING OR PROVIDING CREDIT FACILITIES TO ITS MEMBERS, PURCHAS E OF AGRICULTURE IMPLEMENTS, SEEDS, FERTILIZERS, LIVESTOCK AND OTHER ARTICLES USED FOR AGRICULTURE ACTIVITIES. THE ASSESSEE IS ALSO SELLIN G THE CONTROL PRICE ITEMS UNDER PUBLIC DISTRIBUTION SCHEME (FOR SHORT PDS ) OF THE RAJASTHAN GOVT. LIKE SUGAR, KEROSENE, WHEAT ETC. THE ASSESSEE FILED ITS RETURN OF INCOME ON 15-08-2016 DECLARING NIL INCOME AFTER CLA IMING DEDUCTION OF RS. 27,45,889/- U/S 80P OF THE I.T. ACT, 1961. THE AO HAS DENIED THE CLAIM OF DEDUCTION U/S 80P OF THE ACT ON THE GROUND THAT THE ASSESSEE HAS NOT FURNISHED THE REQUISITE DETAILS REGARDING CLAIM OF DEDUCTION U/S 80P OF THE ACT. THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT(A) AND CONTENDED THAT THE ASSESSEE IS ELIGIBLE FOR DEDUCTION U/S 80P OF THE ACT. THE LD. CIT(A) HAS SUSTAINED THE DISALL OWANCE OF DEDUCTION U/S 80P OF THE ACT MADE BY THE AO ON THE GROUND THA T THE ASSESSEE HAS NOT FURNISHED ANY DETAILS WITH REGARD TO ITS DEDUCT ION BEFORE HIM. ITA NO.597/JP/2019 MOLKIYIA GRAM SEWA SAHKARI SAMITI LTD. VS I TO , WARD- 2(3), AJMER 3 2.3 THE LD.AR OF THE ASSESSEE HAS SUBMITTED THAT TH E AO AS WELL AS THE LD. CIT(A) HAVE DENIED THE CLAIM OF DEDUCTION U/S 8 0P OF THE ACT FOR WANT OF NECESSARY DETAILS AND EVIDENCE IN SUPPORT OF THE CLAIM WHEREAS THE ASSESSEE HAD PRODUCED ITS PROFIT & LOSS ACCOUNT AND BALANCE SHEET BEFORE THE AO WHICH CONTAINS THE DETAILS AND INCOME OF TH E ASSESSEE FROM VARIOUS ACTIVITIES. THEREFORE, THE DENIAL OF THE CL AIM IS NOT JUSTIFIED. THE LD.AR OF THE ASSESSEE REFERRED TO THE PROFIT & LOSS ACCOUNT OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION AND SUBMITTED THAT THE ASSESSEE HAS EVEN GIVEN THE DETAILS OF TRADING ACCOUNT GIVING DETAILS OF SEPARATE ITEMS OF RECEIPTS AND EXPENDITURE. THUS THE LD.AR OF THE ASS ESSEE HAS SUBMITTED THAT WHEN ALL THE DETAILS WERE AVAILABLE WITH THE A O THEN THE CLAIM OF DEDUCTION U/S 80P OF THE ACT OUGHT TO HAVE BEEN AL LOWED. 2.4 ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THA T DESPITE SPECIFIC QUERY BY THE AO, WHEREBY THE ASSESSEE WAS ASKED TO PRODUCE THE DETAILS IN SUPPORT OF THE CLAIM OF DEDUCTION U/S 80P OF THE ACT, THE ASSESSEE HAS FAILED TO FURNISH THE REQUISITE DETAILS. EVEN BEFOR E THE LD. CIT(A), THE ASSESSEE HAS THOUGH CHALLENGED THE ORDER OF THE AO BUT WITHOUT FURNISHING THE SUPPORTING DOCUMENTARY EVIDENCE OR N ECESSARY DETAILS. THE LD. DR HAS RELIED ON THE ORDERS OF THE LOWER AUTHOR ITIES. ITA NO.597/JP/2019 MOLKIYIA GRAM SEWA SAHKARI SAMITI LTD. VS I TO , WARD- 2(3), AJMER 4 2.5 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WEL L AS THE RELEVANT MATERIALS AVAILABLE ON RECORD. THERE IS NO DISPUTE THAT THE ASSESSEE HAS CLAIMED DEDUCTION U/S 80P OF THE ACT IN RESPECT OF ITS ENTIRE INCOME. DURING THE COURSE OF ASSESSMENT PROCEEDING, THE AO HAS DISALLOWED THE CLAIM OF THE ASSESSEE IN PARA 4 (A) AS UNDER:- 4. ON SCRUTINY OF THE CASE, THE FOLLOWING ISSUE H AS BEEN NOTICED:- (A) DISALLOWANCE ON ACCOUNT OF LARGE DEDUCTION CLAIMED UNDER CHAPTER VIA DURING THE COURSE OF ASSESSMENT PROCEEDING, ON PERUSAL OF RETURN OF INCOME IT IS NOTICED THAT ASSE SSEE AOP HAS CLAIMED LARGE DEDUCTION U/S 80P OF CHAPTER VIA AMOUNTING TO RS. 27,45,889/- BUT THE ASSESSEE HAS NOT FURNISHED ANY DETAILS WITH REGARD TO THIS DEDUCTION . IN VIEW OF ABOVE FACTS, IT IS CLEAR THAT THE ASSESSEE HAS F AILED TO FURNISH THE EVIDENCE OF DEDUCTION CLAIMED U/S 80P. IT IS, THEREFORE, DISALLOWANCE ON ACCOUNT OF DEDUCTION CLA IMED U/S 80P OF RS. 27,45,889/- IS HEREBY MADE IN THE TOTAL INCOME OF THE ASSESSEE. THUS IT IS CLEAR THAT DESPITE SPECIFIC QUERY RAISED BY THE AO AND ASKED THE ASSESSEE TO FURNISH THE REQUISITE DETAILS THE ASSE SSEE FAILED TO PRODUCE THE SAME IN SUPPORT OF ITS CLAIM. BEFORE THE LD. CIT(A) , THOUGH THE ASSESSEE HAS REPEATED ITS CONTENTIONS THAT THE ASSESSEE IS E LIGIBLE FOR DEDUCTION U/S 80P(2)(A) OF THE ACT BASED ON THE PROFIT & LOSS ACC OUNT, HOWEVER, THE ITA NO.597/JP/2019 MOLKIYIA GRAM SEWA SAHKARI SAMITI LTD. VS I TO , WARD- 2(3), AJMER 5 ASSESSEE HAS NOT GIVEN SEGMENT WISE DETAILS OF INCO ME EARNED BY IT FROM THE CORE ACTIVITY OF THE ASSESSEE COOPERATIVE SOCIE TY AS WELL AS FROM THE NON-CORE ACTIVITY. THE LD. CIT(A) HAS CONFIRMED THE DISALLOWANCE MADE BY THE AO IN PARA 4.3 AS UNDER:- 4.3 I HAVE GONE THROUGH THE ASSESSMENT ORDER, STA TEMENT OF FACTS, GROUND OF APPEAL AND WRITTEN SUBMISSIONS CAR EFULLY. IT IS SEEN THAT THE APPELLANT HAD CLAIMED DEDUCTION OF RS. 27, 45,889/- U/S 80P. THE ASSESSING OFFICER DISALLOWED THE CLAIM OF THE APPELLANT AS THE ASSESSEE HAD NOT FURNISHED ANY DETAILS WITH REG ARD TO THIS DEDUCTION. DURING THE APPELLATE PROCEEDINGS ALSO, T HE APPELLANT HAS NOT FURNISHED ANY EVIDENCE IN SUPPORT OF THE CLAIM FOR DEDUCTION OF RS. 27,45,889/- MADE U/S 80P. THEREFORE, THE DISALL OWANCE MADE BY THE AO OF DEDUCTION OF RS. 27,45,889/- CLAIMED BY THE APPELLANT U/S 80P IS HEREBY CONFIRMED. THIS GROUND OF APPEAL IS DISMISSED. WE FIND THAT THE PROFIT & LOSS ACCOUNT AS WELL AS T RADING ACCOUNT OF THE ASSESSEE GIVES ONLY THE DETAILS OF RECEIPTS/SALES AND EXPENDITURE INCURRED BY THE ASSESSEE DURING THE YEAR BUT IT DOES NOT GIV E DETAILS OF SEGMENTWISE INCOME FOR THE PURPOSE OF VERIFYING THE CLAIM OF AS SESSEE'S DEDUCTION U/S 80P OF THE ACT. WE FIND THAT SOME OF THE INCOME DUR ING THE YEAR UNDER CONSIDERATION HAS BEEN EARNED BY THE ASSESSEE FROM THE ACTIVITY OF SELLING THE COMMODITIES LIKE SUGAR, KEROSENE, WHEAT ETC. UN DER THE PUBLIC DISTRIBUTION SCHEME OF RAJASTHAN GOVT. THEREFORE, T HESE ACTIVITIES ARE NOT THE CORE ACTIVITY OF THE ASSESSEE SOCIETY AND THE I NCOME FROM THESE ITA NO.597/JP/2019 MOLKIYIA GRAM SEWA SAHKARI SAMITI LTD. VS I TO , WARD- 2(3), AJMER 6 ACTIVITIES WOULD NOT BE ELIGIBLE FOR DEDUCTION U/S 80P OF THE ACT. SO FAR AS THE CORE ACTIVITY OF THE ASSESSEE SOCIETY WHICH INC LUDES CREDIT FACILITIES TO ITS MEMBERS AND SUPPLY OF FERTILIZERS AND OTHER MAT ERIALS USED IN THE AGRICULTURAL ACTIVITY TO THE MEMBERS, THE SAME IS E LIGIBLE FOR DEDUCTION U/S 80P OF THE ACT. FURTHER THE INTEREST EARNED BY THE ASSESSEE FROM THE DEPOSITS WITH ANOTHER COOPERATIVE BANKS IS ALSO ELI GIBLE FOR DEDUCTION U/S 80P OF THE ACT BUT THE INTEREST EARNED FROM THE SA VING BANK ACCOUNT KEPT WITH SCHEDULE BANK OR NON-COOPERATIVE BANK IS AGAI N A MATTER OF DISPUTE, SO FAR AS THE ELIGIBILITY OF DEDUCTION U/S 80P OF T HE ACT IS CONCERNED. IN THE ABSENCE OF THESE SEGMENTWISE DETAILS AND INCOME FROM DIFFERENT ACTIVITIES BIFURCATING INTO THE CATEGORY OF CORE AC TIVITY AND ANCILLARY ACTIVITY TO THE CORE ACTIVITY AS WELL AS NON-CORE A CTIVITY, IT IS NOT POSSIBLE TO CONSIDER THE CLAIM OF DEDUCTION U/S 80P OF THE A CT. ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE SET ASIDE T HIS ISSUE TO THE RECORD OF THE AO TO VERIFY THE SEGMENTWISE DETAILS OF INCOME FROM CORE ACTIVITIES OF THE ASSESSEE AS WELL AS NON-CORE ACTIVITY TO BE FILED BY THE ASSESSEE AND THEN ALLOW THE CLAIM OF THE ASSESSEE U/S 80P OF THE ACT IN RESPECT OF INCOME FROM THE CORE ACTIVITY OF THE ASSESSEE. THUS THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ITA NO.597/JP/2019 MOLKIYIA GRAM SEWA SAHKARI SAMITI LTD. VS I TO , WARD- 2(3), AJMER 7 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 19/03/202 0. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 19/03/ 2020 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1 VIHYKFKHZ@ THE APPELLANT- MOLKIYA GRAM SEWA SAHKARI SAMITI LT D. AJMER 2 IZR;FKHZ@ THE RESPONDENT- ITO, WARD- 2(3), AJMER 3. VK;DJ VK;QDRVIHY ) @ CIT(A), 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO 597/JP/2019) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR