The ACIT,B.K.Circle, Palanpur V. The Banaskantha Dist. Co.Op. Milk Producers Union Ltd., Palanpur

ITA 653/AHD/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 9693 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 22-12-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 06-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUNIL H TALATI
• Section: 14A; 80IB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 653/AHD/2014 (ASSESSMENT YEAR: 2009-10) ASSTT. CIT, B.K. CIRCLE, PALANPUR V/S THE BANASKANTHA DIST. CO- OP. MILK PRODUCERS UNION LTD. BANAS DAIRY, AT- PALANPUR 385001 TAL. PALANPUR DIST-BANASKANTHA (N. GUJ) (APPELLANT) (RESPONDENT) PAN: AAAAB0575E APPELLANT BY : SHRI PRASOON KABRA, SR. D. R. RESPONDENT BY : SHRI SUNIL H. TALATI, A.R. ( )/ ORDER DATE OF HEARING : 22 -12-201 6 DATE OF PRONOUNCEMENT : 23 -12-2016 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. WITH THIS APPEAL, THE REVENUE HAS CHALLENGED THE CO RRECTNESS OF THE ORDER OF THE LD. CIT(A)-XX, AHMEDABAD DATED 19.12.2013 PE RTAINING TO A.Y. 2009- 10. ITA NO 653/A HD/2014 . A.Y. 2009-1 0 2 2. THE ONLY GRIEVANCE OF THE REVENUE IS THAT THE LD. C IT(A) ERRED IN DELETING THE ADDITION OF RS. 2,22,25,108/- MADE ON ACCOUNT OF IN TEREST INCOME FROM INVESTMENT IN CO-OPERATIVE SOCIETIES U/S. 80P(2)(D) OF THE ACT IGNORING THE PROVISIONS OF SECTION 80P(2)(D) R.W.S. 36(1)(III) O F THE ACT. 3. THE ASSESSEE IS A CO-OP. SOCIETY ENGAGED IN THE BUS INESS OF PROCURING AND PROCESSING THE MILK, MANUFACTURING OF MILK AND MILK PRODUCTS, PROCURING AND SUPPLY OF TEA. 4. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS AND ON VERIFYING THE CLAIM OF DEDUCTION OF THE ASSESSEE, THE A.O. WAS OF THE O PINION THAT PROVISIONS OF SECTION 14A SQUARELY APPLY. AS THE ASSESSEE HAS NOT SPECIFIED THE EXPENSES IN RELATION TO THE INVESTMENTS, THE A.O. COMPUTED T HE DISALLOWANCE U/S. 14A R.W.R. 8D OF THE ACT. THE TOTAL DISALLOWANCE WA S COMPUTED AT RS. 21225108//-. 5. ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT(A) A ND CLAIMED THAT NO DISALLOWANCE NEED TO BE MADE U/S. 14A OF THE ACT. T HE LD. CIT(A) WAS CONVINCED WITH THE CLAIM AND DELETED THE ADDITIONS SO MADE BY THE A.O. 6. AGGRIEVED BY THIS, THE REVENUE IS BEFORE US. AT THE VERY OUTSET, THE LD. COUNSEL FOR THE ASSESSEE STATED THAT THE ISSUE IS S QUARELY COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST THE REVENUE BY THE DECI SION OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO. 2630/AHD/2011 AND 18 2/AHD/2013 FOR A.Y. 2008-09. THE LD. D.R. FAIRLY CONCEDED TO THIS. ITA NO 653/A HD/2014 . A.Y. 2009-1 0 3 7. WE GAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORD ERS OF THE AUTHORITIES BELOW. WE FIND FORCE IN THE CONTENTION OF THE LD. C OUNSEL. AN IDENTICAL ISSUE WAS CONSIDERED BY THE TRIBUNAL (SUPRA), THE RELEVAN T PART READS AS UNDER:- 4. WITH THIS BRIEF BACKGROUND, WE HAVE HEARD BOTH T HE SIDES. OUR ATTENTION HAS BEEN DRAWN ON THE BALANCE SHEET OF THE ASSESSEE DRA WN AS ON 31 ST OF MARCH, 2008, WHEREIN IT WAS FOUND THAT THE PAID UP SHARE C APITAL WAS TO THE TUNE OF RS,37,05,88,000/- OUR ATTENTION HAS ALSO BEEN DRAWN THAT THE ASSESSEE HAD RESERVES ANOTHER FUNDS OF RS.20,43,06,246/- AS AGAI NST THAT THE INVESTMENT IN SHARES, NSC, KVP WERE AT RS.8,17,57,010. ON THE BAS IS OF THESE FIGURES, THE VEHEMENT CONTENTION IS THAT THE ASSESSEE HAD SUFFIC IENT OWN FUNDS AND, THEREFORE, THEM WAS NO REASON TO INVOKE THE PROVISI ONS OF SECTION 14A- OF THE IT ACT. THE OTHER PLANK OF ARGUMENT BEFORE US IS THAT THE ASSESSEE HAS NOT CLAIMED THAT ANY PART OF INCOME WAS TOTALLY EXEMPT FROM THE INCOME T AX. BUT THE FACT WAS THAT THE PROFIT AS PER P & L A/C WAS RS.7,80,29 ,871/- AGAINST WHICH THE ASSESSEE HAS CLAIMED DEDUCTION U/S 80IB AND U/S. 80 P(2)(D) OF IT ACT. THE TOTAL ASSESSABLE INCOME WAS COMPUTED AT RS.4,00,68,881/-. THE ASSESSEE HAS, THEREFORE, ARGUED BEFORE US THAT THE PROVISIONS OF SECTION 14A CANNOT BE APPLIED TO THE PROVISIONS OF CHAPTER-VIA, I.E., IN RESPECT OF DEDUCTIONS U/S. 80A TO SECTION 80U OF THE IT ACT. THE ARGUMENT OF THE ASSESSEE IS THAT THE DEDUCTION UNDER THE SAID CHAPTER IS TO BE MADE OUT OF THE COMPUTATION O F THE TOTAL INCOME. THOSE DEDUCTIONS ARE NOT LIKE EXEMPTED INCOME. SO THE ARG UMENT IS THAT THE PROVISIONS OF SECTION 14A ARE TO BE ATTRACTED IN RELATION TO I NCOME WHICH DOES NOT FORM PART OF THE TOTAL INCOME, I.E., AN INCOME EXEMPT UNDER T HE ACT. IN THIS REGARD, A DECISION OF ITAT CHENNAI BENCH PRONOUNCED IN THE CA SE OF TAMIL NADU SILK PRODUCERS FEDERATION LTD. (SUPRA) HAS BEEN CITED. RESPECTFULLY FOLLOWING THIS DECISION AS ALSO CONSIDERING THE TOTALITY OF THE FA CTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE CONSIDERED OPINION THAT LEARNED CIT(A) HAS RIGHTLY HELD THAT THE PROVISIONS OF SECTION 14A HAVE WRONGLY BEEN INV OKED IN THIS CASE. IN THE ITA NO 653/A HD/2014 . A.Y. 2009-1 0 4 RESULT, WE HEREBY AFFIRMED THE FINDING OF LEARNED C IT(A) AND DISMISS THIS GROUND OF THE REVENUE. 8. WE FIND THAT THE FACTS AND ISSUES ARE IDENTICAL AND AS NO DISTINGUISHING DECISION HAVE BEEN BROUGHT ON RECORD BY THE REVENUE , RESPECTFULLY FOLLOWING THE FINDINGS OF THE TRIBUNAL IN ASSESSEE S OWN CASE (SUPRA); WE DECLINE TO INTERFERE WITH THE FINDINGS OF THE FIRST APPELLATE AUTHORITY. APPEAL FILED BY THE REVENUE IS ACCORDINGLY DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON 23 - 12- 20 16. SD/- SD/- (MAHAVIR PRASAD) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY ACCOUNTANT MEMBER AHMEDABAD: DATED 23/12/2016 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD