ITO, JHALAWAR V. M/S JHALAWAR SAHKARI BHOOMI VIKAS BANK LTD., JHALAWAR

ITA 634/JPR/2012

• Counselvise Citation: 63423114 RSA 2012
• Duration Of Justice: 2 year(s) 8 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 21-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEENA JEEPH

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM VK;DJ VIHY LA-@ ITA NO. 634/JP/2012 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2006-07 THE ITO JHALAWAR CUKE VS. M/S. JHALWAR SAHKARI BHOOMI VIKAS BANK LTD. MANGALPURA, JHALAWAR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAAAJ 1243 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SMT. NEENA JEEPH, JCIT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : NONE (DEPARTMENTAL A.D. ON RECORD) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 24/02/2015 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 20 /03/2015 VKNS'K@ ORDER PER T.R. MEENA, AM THIS IS AN APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A), KOTA DATED 15-05-2012 FOR THE ASSESSMENT Y EAR 2006-07 WHEREIN THE REVENUE RAISED FOLLOWING GROUND. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE , THE LD. CIT(A) HAS ERRED IN:- (I) TREATING THE RECEIPTS ON ACCOUNT OF INTEREST F ROM EMPLOYEES, INTEREST ON SAVINGS, DIVIDEND AND INCOME FROM NO DUES CERTIFICATES AS INCOME FROM BANKING BUSINESS A CTIVITIES ITA NO. 634//JP/2012 ITO VS. JHALWAR SAHKARI BHOOMI VIKAS BANK LTD., . 2 AND CONSEQUENT ALLOWANCE OF DEDUCTION U/S 80P(2)(I) (A) & 80P(2)(D). 2.1 NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPIT E OF SERVICE OF NOTICE OF THIS HEARING. CONSEQUENTLY WE ARE LEFT WI TH NO ALTERNATIVE BUT TO DECIDE THE APPEAL ON MERITS, EX PARTE QUA THE ASSES SEE, AFTER HEARING LD. DR AND AFTER PERUSAL OF THE MATERIALS AVAILABLE ON RECORD. 3.1 BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE C LAIMS TO BE A FINANCIAL INSTITUTION REGISTERED UNDER THE COOPERATIVE SOCIET IES ACT. THE INCOME WAS CLAIMED TO BE ELIGIBLE FOR DEDUCTION U/S 80P OF THE ACT. ACCORDINGLY, TAXABLE RETURN OF NIL INCOME WAS SHOWN AS AGAINST I NTEREST INCOME OF RS. 91,85,991/- AND CARRIED OVER BUSINESS LOSS OF FINAN CIAL YEAR 2005-06 AMOUNTING TO RS. 2,61,24,009/- WAS SET OFF. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS MADE FOLLOWING OBSERVATIONS. 03. FROM THE DETAILS FILED, IT IS ALSO SEEN THAT THE ASSESSEE BANK HAS ADVANCED LOANS TO THE PERSON OTHE R THAN THE MEMBERS OF THE ASSESSEE BANK. THE INTEREST EARN ED AND OTHER DETAILS OF OTHER INCOME ARE AS UNDER:- 1. INTEREST FROM THE EMPLOYEES RS. 237860/- 2. INTEREST ON SAVINGS RS. 119717/- 3. DIVIDEND RS. 1500459/- 4. INCOME FROM NO DUES CERTIFICATE RS. 3533 0/- RS. 1893366/- 0.4 THE ABOVE RECEIPTS OF INTEREST ARE NOT FROM THE MEMBERS OF THE BANK BUT FROM OTHER PERSONS. THE DIV IDEND ITA NO. 634//JP/2012 ITO VS. JHALWAR SAHKARI BHOOMI VIKAS BANK LTD., . 3 AND NO DUES CERTIFICATE CHARGES ARE ALSO NOT FROM B ANKING ACTIVITIES. THIS INCOME IS TAXABLE AND IS NOT ENTIT LED FOR DEDUCTION U/S 80P(2)(I)(A) AS THE SAME IS NOT COVER ED WITH THE BANKING ACTIVITIES. THE ASSESSEE FILED ITS REPLY IN HINDI WHICH IS REPR ODUCED BY THE AO IN HIS ORDER. THE SAME DID NOT FIND THE FAVOUR OF THE ASSE SSEE WHO HELD THE INTEREST RAISED IN THE GROUNDS OF APPEAL AS INCOME FROM OTHER SOURCES BY FOLLOWING OBSERVATIONS. 09. THE REPLY FILED BY ASSESSEE HAS BEEN EXAMINED AND NOT FOUND CONVINCING BECAUSE THE ACTIVITIES OF ASSESSEE ARE BANKING BUSINESS AND INCOME FROM (I) INTEREST I NCOME ON LOAN ADVANCE TO OTHER THAN MEMBERS (II) INTEREST E ARNED ON SAVINGS/ DEPOSITS WITH OTHER BANKS (III) DIVIDEND A ND (IV) FROM NO DUES CERTIFICATE WAS TAXED AS INCOME FROM O THER SOURCES TREATING THEM NON-BANKING ACTIVITIES IN THE ASSESSMENTS COMPLETED FOR ASSESSMENT YEAR 2004-05 & 2005- 06 AND WHICH WERE ACCEPTED BY THE ASSESSEE AND THE ASSESSMENT ORDERS WERE NOT CHALLENGED AT ANY STAGE . THEREFORE, INCOME FROM (I) INTEREST EARNED ON LOAN ADVANCED TO OTHER THAN MEMBERS OF RS. 2,37,860/- (II) INTERE ST EARNED ON DEPOSITS WITH OTHER BANKS OF RS. 1,19,717/- (III ) DIVIDEND OF RS. 15,00,459/- AND (IV) FROM NO DUES CERTIFICAT E RS. 35,330/- IS TREATED AND ASSESSED AS INCOME FROM OTH ER SOURCES AND ADDED TO TOTAL INCOME OF ASSESSEE. 3.2 AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) WHO HAD ALLOWED THE APPEAL OF THE ASSESSEE IN TOTO BY RELYING VARIOUS DECISIONS AS UNDER:- (I) MADHYA PRADESH COOPERATIVE BANK LTD., 218 ITR 438 (SC) ITA NO. 634//JP/2012 ITO VS. JHALWAR SAHKARI BHOOMI VIKAS BANK LTD., . 4 (II) CIT VS. KARNATAKA STATE COOPERATIVE APEX BANK (2001) 251 ITR 194 (SC) (III) CIT VS. REWARI CENTRAL COOPERATIE BANK LTD. (2003) 263 ITR 598 (P&H) 3.3 NOW THE REVENUE IS BEFORE US. 3.4 DURING THE COURSE OF HEARING, THE LD. DR THE SU PPORTED THE ORDER OF THE AO WHEREAS NOBODY WAS PRESENT FROM THE SIDE OF THE ASSESSEE. 3.5 WE HAVE HEARD THE LD. DR AND PERUSED THE MATERI ALS AVAILABLE ON RECORD. IT IS EVIDENT FROM THE ASSESSMENT ORDER THA T THE ASSESSEE HAD INCOME FROM INTEREST FROM THE EMPLOYEES, INTEREST O N SAVINGS, DIVIDEND AND INCOME FROM NO DUES CERTIFICATE TOTALING TO RS. 18,93,366/- WHICH HAS BEEN HELD BY THE AO AS INCOME FROM OTHER SOURCES. T HE LD. CIT(A) HAD DEALT WITH EACH ITEMS IN HIS ORDER AND HAD GIVEN DE TAILED FINDINGS ON ALL THE ISSUES RAISED BEFORE HIM. AFTER CONSIDERING VAR IOUS JUDGEMENTS AS MENTIONED ABOVE HE TREATED THE INCOME OF RS. 18,93, 366/- AS INCOME FROM BUSINESS OR PROFESSION AND ALSO ENTITLED THE A SSESSEE FOR DEDUCTION U/S 80P(2)(I)(A) OF THE ACT I.E. INTEREST FROM EMPL OYEES, INTEREST ON SAVINGS, DIVIDEND AND INCOME FROM NO DUES CERTIFICA TE. THE LD. DR HAS NOT CONTROVERTED THE FINDINGS GIVEN BY THE LD. CIT( A). THE JUDGEMENTS RELIED ON BY THE LD. DR IN THE CASES OF TOTGARS C O-OPERATIVE SALE SOCIETY LTD. VS. ITO, (2010) 322 ITR 283 (SC) IS ON SURPLUS FUND DEPOSITED WITH ITA NO. 634//JP/2012 ITO VS. JHALWAR SAHKARI BHOOMI VIKAS BANK LTD., . 5 BANK AND INTEREST INCOME . CIT VS. NAWANSHAHAR CENTRAL CO-OP. BANK LTD. 349 ITR 689 (SC) ARE SQUARELY APPLICABLE IN THIS CASE AS THE HON'BLE SUPREME COURT ALLOWED 80P(2)(A)(I) DEDUCTI ON ON UNDERWRITING COMMISSION AND INTEREST ON PSEP BOND. THUS IN VIE W OF THE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND NO REASON TO INT ERFERE IN THE ORDER OF THE LD. CIT(A) AND THE APPEAL OF THE REVENUE IS DIS MISSED. 4.0 IN THE RESULT, THE APPEAL OF THE REVENUE IS DI SMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20 /03/ 2015. SD/- SD/- VKJ-IH-RKSYKUH VH-VKJ-EHUK (R.P.TOLANI) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 20/03/ 2015 *MISHRA VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE ITO, JHALAWAR 2. IZR;FKHZ@ THE RESPONDENT- M/S. JHALAWAR SAHKARI BHOOMI VIKAS BANK LTD. JHALAWAR 3. VK;DJ VK;QDRVIHY ) @ CIT(A), JAIPUR 3. VK;DJ VK;QDR@ CIT, JAIPUR 4. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 5. XKMZ QKBZY@ GUARD FILE (ITA NO.634/JP/2012) VKNS'KKUQLKJ@ BY ORDER, ITA NO. 634//JP/2012 ITO VS. JHALWAR SAHKARI BHOOMI VIKAS BANK LTD., . 6 LGK;D IATHDKJ@ ASSISTANT. REGISTRAR