Income Tax Officer, Hubli V. M/s.Dharwad District Police Credit Co-operative Society Ltd., Dharwad

ITA 649/BANG/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 5334 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 21-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWAPNA DAS JT BENGALURU

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC - A BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER ITA NO.649/BANG/2017 ASSESSMENT YEAR : 2013-14 THE INCOME TAX OFFICER, WARD 2(1), HUBLI. VS. M/S. DHARWAD DISTRICT POLICE CREDIT CO-OP. SOCIETY LTD., NEAR NEW BUS STAND, P.B. ROAD, DHARWAD. PAN: AABAD 6467C APPELLANT RESPONDENT APPELLANT BY : SMT. SWAPNA DAS, JT.CIT(DR)(ITAT)-2, BENGALURU RESPONDENT BY : NONE DATE OF HEARING : 15.05.2017 DATE OF PRONOUNCEMENT : 26.05.2017 O R D E R THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST T HE ORDER OF CIT(APPEALS) INTER ALIA ON THE FOLLOWING GROUNDS:- ITA NO.649/BANG/2017 PAGE 2 OF 4 2. THIS APPEAL CAME UP FOR HEARING ON 15.05.2017, BUT NONE APPEARED ON BEHALF OF THE ASSESSEE, THOUGH NOTICE OF HEARING WAS DULY SERVED UPON IT AND AD CARD IS PLACED ON RECORD. THEREFORE, I HAVE NO OTHER OPTION, BUT TO HEAR THE APPEAL EX PARTE . ACCORDINGLY REVENUE WAS HEARD. 2. I HAVE CAREFULLY EXAMINED THE ORDERS OF LOWER AU THORITIES AND I FIND THAT THE AO HAS DENIED THE BENEFIT OF DEDUCTION CLA IMED U/S. 80P(2)(A)(I) OF THE ACT AGAINST WHICH THE APPEAL WAS FILED BEFORE T HE CIT(APPEALS) AND PLACED RELIANCE UPON THE JUDGMENT OF HON'BLE JURISD ICTIONAL HIGH COURT IN THE CASE OF CIT, HUBLI V. BHAVASAR KSHATRIYA CO-OP. CREDIT SOCI ETY LTD. IN WHICH THEY HAVE CONFIRMED THE VIEW OF THE TRIBUNAL AND ALLOWED DEDUCTION U/S. 80P OF THE ACT AGAINST THE INCOME EARNED FROM MEMBERS/DEPOSITS. THE CIT(APPEALS) ALLOWED THE APPEAL OF ASSESSEE AGA INST WHICH REVENUE IS IN APPEAL BEFORE ME AND PLACED RELIANCE UPON THE AS SESSMENT ORDER. 3. THOUGH NONE APPEARED FOR THE ASSESSEE, I HAVE EX AMINED THE ORDER OF CIT(APPEALS) AND FIND THAT HE HAS ADJUDICATED TH E ISSUE IN THE LIGHT OF THE RATIO LAID DOWN BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SHRI BILURU GURUBASAVA PATTINA SAHAKARI SANGHA NIYAMITHA AND CIT, HUBLI V. BHAVASAR KSHATRIYA CO-OP. CREDIT SOCIETY LTD. SINCE THE CIT(APPEALS) HAS DECIDED THE FOLLOWING THE JUDGMENTS OF HON'BLE JURISDICTIONAL HIGH COURT, I FIND NO INFIRMITY IN HIS ORDER. HOWEVER, FOR THE SAKE OF REFERENCE, I EXTRACT THE RELEVANT PORTION OF THE ORDER OF CIT(AP PEALS) HEREUNDER:- ITA NO.649/BANG/2017 PAGE 3 OF 4 6. IN THE CASE OF SHRI. BILURU GURUBASAVA PATTINA SAHAKARI SANGHA NIYAMITA, BAGALKOT, THE HON'BLE HIGH COURT O F KARNATAKA HAS HELD AS UNDER. ' IF A CO-OPERATIVE BANK IS EXCLUSIVELY CARRYING BA NKING BUSINESS, THEN THE INCOME DERIVED FROM THE SAID BUS INESS CANNOT BE DEDUCTED IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE. THE SAID INCOME IS LIABLE FOR TAX. A CO-OP ERATIVE BANK AS DEFINED UNDER THE BANKING REGULATION ACT INCLUDES THE PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY O-OPERATIVE AGRICULTURAL RURAL DEVELOPMENT BANK. THE LEGISLATURE DID NOT WANT TO DENY THE SAID BENEF IT TO THE PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMAR Y A- OPERATIVE AGRICULTURAL RURAL DEVELOPMENT BANK. THEY DID NOT WANT TO EXTEND THE SAID BENEFIT TO A CO-OPERATI VE BANK WHICH IS EXCLUSIVELY CARRYING ON BANKING BUSINESS I .E. THE PURPORT OF THE AMENDMENT. IF THE ASSESSEE IS NOT A COOPERATIVE BANK CARRYING ON EXCLUSIVELY BANKING BUSINESS AND IF IT DOES NOT POSSESS A LICENCE FROM THE RESERVE BANK OF INDIA TO CARRY ON BUSINESS, THEN IT IS NOT A CO-OPERATIVE BANK. IT IS A CO-OPERATIVE SOCIETY WHI CH ALSO CARRIES ON THE BUSINESS OF LENDING MONEY TO ITS MEM BERS WHICH IS COVERED U/S. 80P(2)(A)(I) I.E. CARRYING ON THE BUSINESS OF BANKING PROVIDING CREDIT FACILITIES TO ITS MEMBERS THE OBJECT OF THE AFORESAID AMENDMENT IS TO EXCLUDE THE BENEFIT EXTENDED U/S 80P(I) TO THE SOCI ETY.' 7. IN THE CASE OF CIT, HUBLI VS. BHAVASAR KSHATRIY A CO- OPERATIVE CREDIT SOCIETY LTD (ITA NO.100206/2015), THE HON'BLE HIGH COURT OF KARNATAKA, DHARWAD BENCH, AFTER FOLLO WING THE DECISION IN THE CASE OF SHRI. BILURU GURUBASAVA PAT TINA SAHAKARI SANGHA NIYAMITA, HAS DISMISSED THE APPEAL OF 'THE D EPARTMENT I.E. THE APPEAL IS DECIDED IN FAVOUR OF THE ASSESSEE, WH O HAD CLAIMED DEDUCTION U/S. 80P AGAINST INCOME AS INTEREST FROM MEMBERS/DEPOSITS. 8. IN THE CASE OF CIT-IV, BANGALORE VS. YESHWANTPU R CREDIT COOPERATIVE SOCIETY LTD (ITA NO.237/2012), THE HON' BLE HIGH COURT OF KARNATAKA, FOLLOWING THE DECISION IN THE C ASE OF SHRI. BILURU GURUBASAVA PATTINA SAHAKARI SANGHA NIYAMITA, HAS DECIDED THE APPEAL AGAINST THE DEPARTMENT. 9. RESPECTFULLY, FOLLOWING THE ABOVE DECISIONS AND IN VIEW OF THE FACT THAT, THE INCOME OF THE APPELLANT SOCIETY HAS BEEN EARNED MAINLY AS INTEREST FROM MEMBERS AND OTHER CO-OP BAN KS AND ITA NO.649/BANG/2017 PAGE 4 OF 4 SOCIETIES, I DECIDE TO HOLD THAT, THE DEDUCTION CLA IMED U/S. 80P CANNOT BE DENIED. ALL GROUNDS ARE ALLOWED. 4. SINCE THE CIT(APPEALS) HAS DECIDED THE ISSUE FOL LOWING THE JUDGMENTS OF HON'BLE JURISDICTIONAL HIGH COURT, I F IND NO INFIRMITY THEREIN AND ACCORDINGLY I CONFIRM HIS ORDER. 5. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF MAY, 2017. SD/- (SUNIL KUMAR YADAV ) JUDICIAL MEMBER BANGALORE, DATED, THE 26 TH MAY, 2017. / D ESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, ITAT, BANGALORE.