Belapu Vyavasaya Seva Sahakari Sangha Niyamitha , Udupi V. Income Tax Officer Ward-1 & TPS , Udupi

ITA 705/BANG/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1355 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2016-2017
• Appeal Filed On: 09-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K.N.DHANDAPANI
• Keywords: Opportunity of being heard; Source of fund; Set aside
• Section: 80P; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 705 /BANG/201 9 ASSESSMENT YEAR : 201 6 - 1 7 M/S. BELAPU VYAVASAYA SEVA SAHAKARI SANGHA LTD., PANIYOOR, BELAPU POST, UDUPI 574 140. PAN: AACAB7010N VS. THE INCOME TAX OFFICER, WARD 1 & TPS, UDUPI. APPELLANT RESPONDENT ASSESSEE BY : SHRI MAHESH R. UPPIN, ADVOCATE RE VENUE BY : SHRI K.N. DHANDAPANI, JCIT (DR) DATE OF HEARING : 10 .0 6 .201 9 DATE OF PRONOUNCEMENT : 14 .0 6 .201 9 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE AND THE SAME IS DIRECTED AGAINST THE ORDER OF LD. CIT(A), MANGALURU DATED 22.03.2019 FOR ASSESSMENT YEAR 2016-17. 2. AT THE VERY BEGINNING, IT IS SUBMITTED BY LD. AR OF ASSESSEE THAT ALTHOUGH THE ASSESSEE HAS RAISED AS MANY AS 11 GROUNDS OF APPEAL AS PER THE CONCISE GROUNDS OF APPEAL FILED BY THE ASSESSEE BUT THE ONLY EFFECTIVE GRIEVANCE OF THE ASSESSEE IS REGARDING DISALLOWANCE OF ASSESSEES CLAIM FOR DEDUCTION U/S. 80P OF THE IT ACT. 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THE ASSESSEE HAS EARNED AN INTEREST INCOME OF RS. 51,18,590/- WHICH HAS BEEN ASSESSED BY THE AO AS INCOME FROM OTHER SOURCES AND ASSESSEES CLAIM FOR DEDUCTION U/S. 80P OF THE IT ACT WAS DISALLOWED BY THE AO AND IT IS CONFIRMED BY CIT(A). HE SUBMITTED THAT THE MAIN BASIS OF THE DECISION OF THE AUTHORITIES BELOW IS BY FOLLOWING THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY AS REPORTED IN 395 ITR 611 (KARN). HE ALSO SUBMITTED THAT OTHER JUDGMENT ON WHICH RELIANCE HAS BEEN PLACED BY THE AUTHORITIES BELOW IS THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF THE CITIZEN CO-OPERATIVE SOCIETY LTD. VS. ACIT AS REPORTED IN 397 ITR 1. HE SUBMITTED THAT NONE OF THE AUTHORITIES BELOW ITA NO. 705/BANG/2019 PAGE 2 OF 3 HAS EXAMINED AND COMPARED THE FACTS OF THE PRESENT CASE WITH THE FACTS IN THE CASE OF THE CITIZEN CO-OPERATIVE SOCIETY LTD. VS. ACIT (SUPRA). REGARDING THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY (SUPRA), IT WAS SUBMITTED THAT IN THE FACTS OF PRESENT CASE, THIS JUDGMENT OF HON'BLE KARNATAKA HIGH COURT IS NOT APPLICABLE AND INSTEAD OF THAT, ANOTHER JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO AS REPORTED IN 230 TAXMAN 309 IS APPLICABLE. AT THIS JUNCTURE, THIS PROPOSITION WAS PUT FORWARD BY THE BENCH THAT UNDER SIMILAR FACTS, THE TRIBUNAL IS RESTORING THE MATTER BACK TO THE FILE OF CIT(A) FOR FRESH DECISION AFTER EXAMINING THE FACTS OF THE PRESENT CASE IN THE LIGHT OF THESE TWO JUDGMENTS RENDERED IN THE CASE OF PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY (SUPRA) AND TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO (SUPRA) WITH THE DIRECTION THAT IF THE FACTS ARE IN LINE WITH THE FACTS IN THE CASE OF PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY (SUPRA), THEN THE ISSUE SHOULD BE DECIDED AGAINST THE ASSESSEE. BUT IF THE FACTS OF THE PRESENT CASE ARE IN LINE WITH THE FACTS IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO (SUPRA), THEN THE ISSUE SHOULD BE DECIDED IN FAVOUR OF THE ASSESSEE. THE BENCH POINTED OUT THAT IN THE CASE OF PCIT AND ANOTHER VS. TOTAGARS CO- OPERATIVE SALE SOCIETY (SUPRA), THE AMOUNT DEPOSITED IN BANK ON WHICH INTEREST INCOME WAS EARNED WAS OUT OF THE LIABILITY OF THE ASSESSEE SOCIETY AND NOT OUT OF ITS OWN FUNDS AND FOR THIS REASON, IN THAT CASE OF PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY (SUPRA), THE HON'BLE KARNATAKA HIGH COURT DECIDED THE ISSUE AGAINST THE ASSESSEE. BUT IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO (SUPRA), IT WAS FOUND THAT THE MONEY DEPOSITED IN BANK BY ASSESSEE WAS OUT OF ITS OWN FUNDS AND NOT OUT OF LIABILITY AND THEREFORE, THE ISSUE IN THAT CASE WAS DECIDED IN FAVOUR OF THE ASSESSEE. THE BENCH PROPOSED THAT SINCE THE FACTS IN THE PRESENT CASE ARE NOT READILY AVAILABLE ON RECORD AND THERE IS NO FINDING OF AUTHORITIES BELOW ON THIS FACTUAL ASPECT REGARDING THE SOURCE OF FUNDS DEPOSITED ON BANK ON WHICH INTEREST INCOME WAS EARNED, THE ISSUE SHOULD GO BACK TO THE FILE OF CIT(A)M FOR FRESH DECISION. THE BENCH ALSO PROPOSED THAT REGARDING THE JUDGMENT OF HONBLE APEX COURT RENDERED IN THE CASE OF THE ITA NO. 705/BANG/2019 PAGE 3 OF 3 CITIZEN CO-OPERATIVE SOCIETY LTD. VS. ACIT (SUPRA) ALSO, THE LD. CIT(A) SHOULD PASS A SPEAKING AND REASONED ORDER AFTER COMPARING THE FACTS OF PRESENT CASE WITH THE FACTS IN THAT CASE IN THE LIGHT OF LAW FOR COOPERATIVE SOCIETY IN THE STATE OF KARNATAKA BECAUSE IN THAT CASE, THE STATE IS DIFFERENT AND COOPERATIVE LAW IS DIFFERENT. . IN REPLY, THE LD. AR OF ASSESSEE AGREED WITH THIS PROPOSITION PUT FORWARD BY THE BENCH. THE LD. DR OF REVENUE SUPPORTED THE ORDER OF CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND WE SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER BACK TO HIS FILE FOR FRESH DECISION IN THE LIGHT OF ABOVE DISCUSSION, BY WAY OF A SPEAKING AND REASONED ORDER AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. THE LD. CIT(A) IS DIRECTED TO PASS A SPEAKING AND REASONED ORDER AFTER COMPARING THE FACTS OF PRESENT CASE WITH THE FACTS IN THE CASE OF THE CITIZEN CO-OPERATIVE SOCIETY LTD. VS. ACIT (SUPRA). HE IS ALSO DIRECTED TO EXAMINE THE FACTS OF PRESENT CASE IN THE LIGHT OF THESE TWO JUDGMENTS OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO (SUPRA) AND PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY (SUPRA) AND PASS NECESSARY ORDER AS PER LAW IN THE LIGHT OF ABOVE DISCUSSION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO BOTH SIDES. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/- SD/- (PAVAN KUMAR GADALE) (ARUN KUMAR GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 14 TH JUNE, 2019. /MS/ COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.