BUNDI CENTRAL CO-OPERATIVE BANK LTD., Kota V. ACIT, Kota

ITA 697/JPR/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99516 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 1 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 13-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P BHATEJA
• Assessee Lawyers: B V MAHESHWARI C A DHK
• Keywords: Opportunity of being heard; Bad and doubtful debts; Revised return
• Section: 143(3)

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 VH-VKJ-EHUK] YS[KK LNL; ,OA JH YFYR DQEKJ] U;KF; D LNL; DS LE{K BEFORE: SHRI T.R.MEENA, AM & SHRI LALIET KUMAR, JM VK;DJ VIHY LA-@ ITA NOS. 697/JP/2014 FU/KZKJ.K O'K Z@ ASSESSMENT YEARS : 2009-10 . THE BUNDI CENTRAL CO- OPERATIVE BANK LTD., BUNDI. CUKE VS. THE ACIT, CIRCLE-1, KOTA. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AABAT 4227 G VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY : SHRI O.P. BHATEJA (ADDL.CIT) FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY S BY : SHRI B.V. MAHESHWARI (C.A.) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 26.11.2015. ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 27/11/2015. VKNS'K@ ORDER PER SHRI LALIET KUMAR, J.M. THE APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. CIT (A), KOTA DATED 08.08.2014. THE SOLE GROUND RAISED IN THE APPEAL I S AS UNDER :- THAT THE LD. A.O. GROSSLY ERRED IN NOT ALLOWING T HE DEDUCTION U/S 80P(2)(A) OF I.T. ACT, 1961 ON THE INCOME OF DIVIDE ND RECEIVED RS. 7,08,945/- AND THE LD. CIT (A), KOTA IS ALSO ERRED IN CONFIRMING THE SAID ADDITION MADE BY LD. A.O. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A COOPERATIVE BANK ENGAGED IN THE BANKING BUSINESS. THE ASSESSEE FILED ITS RETURN OF INCOME ON 27.09.2009 DECLARING AN INCOME OF RS. 99,09,460/- AND LATER ON FILED REV ISED RETURN ON 29.03.2010 DECLARING 2 ITA NO. 697/JP/2014 A.Y. 2009-10. THE BUNDI CENTRAL COOPERATIVE BANK LTD. VS. ACIT AN INCOME OF RS. 35,17,580/-. THE CASE WAS SELECTED FOR SCRUTINY AND PROCESSED UNDER SECTION 143(3) OF THE IT ACT AND ORDER PASSED ON 30 .11.2011 ASSESSING TOTAL INCOME OF RS. 66,21,930/-. DURING THE COURSE OF ASSESSMENT P ROCEEDINGS, THE AO NOTICED THAT ASSESSEE FILED REVISED RETURN AFTER CLAIMING DEDUCT ION FOR PROVISION FOR BAD DEBTS AND U/S 80P(2)(D). THE AO AFTER GOING THROUGH THE AUDIT REPORT, ISSUED SHOW CAUSE BY OBSERVING THAT BANK HAS CLAIMED DEDUCTION U/S 80P O F THE IT ACT, HOWEVER, THIS BANK IS A CO-OPERATIVE BANK WHICH IS ENGAGED IN BANKING ACT IVITIES THEREFORE IT IS NOT ELIGIBLE FOR DEDUCTION U/S 80P AS PER SECTION 80P(4) WHICH SAYS THAT THE PROVISIONS OF THIS SECTION SHALL NOT APPLY IN RELATION TO ANY CO-OPERATIVE BAN K OTHER THAN A PRIMARY AGRICULTURAL CREDIT SOCIETY OR A PRIMARY CO-OPERATIVE AGRICULTUR AL AND RURAL DEVELOPMENT BANK, AND REQUIRED THE ASSESSEE AS TO WHY CLAIM OF DEDUCTION U/S 80P MAY NOT BE DISALLOWED AND ADDED TO THE TOTAL INCOME OF THE BANK. THE ASSESSE E VIDE ITS LETTER DATED 03.11.2011 EXPLAINED THAT THE ASSESSEE IS ENGAGED PRIMARILY IN AGRICULTURE CREDIT ADVANCES, THEREFORE, IT CANNOT BE SEPARATED FROM THE PRIMARIL Y AGRICULTURAL CREDIT SOCIETY. ITS PRINCIPAL OBJECT IS TO GIVE ADVANCES TO THE RURAL A GRICULTURE SECTOR, HENCE THE DEDUCTION IS BASED ON ITS WORKING NOT ON ITS NAME AND THE WOR KING IS SATISFYING THE CONDITIONS OF SECTION 80P(4). THEREFORE, DEDUCTION HAS RIGHTLY BE EN CLAIMED. THE REPLY OF THE ASSESSEE COULD NOT FIND FAVOUR WITH THE AO, THEREFO RE, HE MADE THE ADDITION OF RS. 7,08,945/- UNDER SECTION 80P AND ADDED TO THE TOTAL INCOME OF THE BANK. 3. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER BEFORE LD. CIT (A) WHO HAS CONFIRMED THE ADDITION BY FOLLOWING HIS OWN ORDER I N APPEAL NO. 588/11-12 FOR THE A.Y. 2009-10. THE LD. CIT (A) AFTER CONSIDERING THE PROVISIONS O F SECTION 80P (4) AND THE 3 ITA NO. 697/JP/2014 A.Y. 2009-10. THE BUNDI CENTRAL COOPERATIVE BANK LTD. VS. ACIT OBJECTS OF THE ASSESSEE HELD THAT THE PRINCIPAL OBJ ECT OF ASSESSEE IS NOT TO PROVIDE LONG TERM CREDIT FOR AGRICULTURAL AND RURAL DEVELOPMENT ACTIVITIES. SECONDLY, ASSESSEE IS NOT A PRIMARY BANK BUT A NODAL BANK WHICH WORKS AS A BALA NCING CENTER FOR OTHER CO-OPERATIVE BANKS WORKING IN THE AREA. THE LD. CIT (A) OBSERVE D THAT ASSESSEE DISTRIBUTED LOANS OF RS. 78.38 (76.85%) CRORES THROUGH CO-OPERATIVE SOCI ETIES AND ONLY RS. 23.61 (23.15%) CRORE WERE DISTRIBUTED DIRECTLY. FROM THESE FIGURE S IT CAN BE DEDUCED THAT ASSESSEE WAS NOT A PRIMARY BANK BUT A CENTRAL COOPERATIVE BAN K ACTING AS A NODAL BANK FOR MANY CO-OPERATIVE SOCIETIES AND BANKS. THEREFORE, THE L D. CIT (A) HELD THAT THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION U/S 80P(2)(D) OF THE IT ACT. THE FACTS IN THIS YEAR BEING SIMILAR TO LAST YEAR, THE LD. CIT (A) CONFIRMED THE ADDITION OF RS. 7,08,945/-. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE US. 4.1. THE LD. A/R OF THE ASSESSEE, AT THE TIME OF HE ARING OF THE APPEAL, FILED DETAILED WRITTEN SUBMISSION SUPPORTING THE CLAIM OF THE ASSE SSEE AND REQUESTED TO ALLOW THE CLAIM OF THE ASSESSEE. 4.2. AT THE OUTSET, THE LD. D/R VEHEMENTLY SUPPORTE D THE ORDER OF THE LD. CIT (A). 4.3. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED TH E MATERIAL AVAILABLE ON RECORD. WE FIND THAT THE ISSUE IS COVERED BY THE DECISION O F THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE A.Y. 2008-09 IN ITA NO. 486/JP/2012 DA TED 05.06.2015 WHEREIN THE ORDER OF LD. CIT (A) WAS SET ASIDE TO THE FILE OF AO FOR FRESH CONSIDERATION. SINCE THE FACTS IN THE PRESENT CASE ARE SIMILAR TO LAST YEAR, RESPECTF ULLY FOLLOWING THE ORDER FOR THE A.Y. 4 ITA NO. 697/JP/2014 A.Y. 2009-10. THE BUNDI CENTRAL COOPERATIVE BANK LTD. VS. ACIT 2008-09, WE SET ASIDE THE ISSUE TO THE FILE OF AO F OR DE NOVO AND DECIDE THE CASE BY PROVIDING REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27/11/20 15. SD/- SD/- VH-VKJ-EHUK YFYR DQEKJ (T.R. MEENA) (LALIET KUMAR) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 27/11/2015 DAS/ VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- THE BUNDI CENTRAL CO-OPERATIVE BANK LTD., BUNDI. 2. IZR;FKHZ@ THE RESPONDENT- THE ACIT, CIRCLE-1, KOTA. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDRVIHY@ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 697/JP/2014) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR 5 ITA NO. 697/JP/2014 A.Y. 2009-10. THE BUNDI CENTRAL COOPERATIVE BANK LTD. VS. ACIT