The ACIT, 1(1), V. M/s Bhopal Co. Op. Central Bank Ltd.,

ITA 713/IND/2007

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0095 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 10 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 23-09-2009
• Assessment Year: 2004-2005
• Appeal Filed On: 19-11-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Section: 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI BHAVNESH SAINI, JM & SHRI V.K. GUPTA, A M ITA NO.713/IND/2007 AY: 2004-05 (PAN AAAAB 3271 B) ACIT-1(1), BHOPAL APPELLANT VS. BHOPAL CO-OPERATIVE BANK LTD., NEW MARKET, T.T. NAGAR, BHOPAL RESPONDENT DEPARTMENT BY SMT. APARNA KARAN, ADDL. CIT, DR ASSESSEE BY NONE O R D E R PER SHRI V.K. GUPTA, AM THIS APPEAL FIELD BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) DATED 11.9.2007 FOR THE ABOVE AY. 2. NONE APPEARED ON BEHALF OF THE ASSESSEE, HENCE WE PROCEED TO DECIDE THIS APPEAL AFTER HEARING THE LD. DR AND ON THE BASIS OF MATERIAL ON RECORD. 3. IN THIS APPEAL, REVENUE IS AGGRIEVED BY THE DECI SION OF THE LD. CIT(A) IN HOLDING THAT ASSESSEE WAS ENTITLED FOR DEDUCTION U/S 80P(2) OF THE IT ACT IN RESPECT OF INCOME OF RS.7,29,545/- EARNED BY WAY OF SERVICE CHARGE FROM THE OWNERS OF PUBLIC DISTRIBUTION SYSTEM. 2 4. THE FACTS, IN BRIEF, ARE THAT ASSESSEE IS A COOP ERATIVE BANK CLAIMED DEDUCTION U/S 80P(2)(A) AND 80P(2)(C). THE AO, NOTED THAT ASSESSEE WAS RECEIVING MONEY FROM THE OWNERS OF PUBLIC DISTRIBUT ION SYSTEM AND THEREAFTER THE ASSESSEE ISSUED RELEASE ORDER IN THE IR FAVOUR WHICH ENABLED THEM TO RECEIVE THE GOODS. THE ASSESSEE CHARGED FEE FOR SUCH SERVICE FROM SUCH PERSONS. THE AO HELD THAT THIS ACTIVITY DID NOT FALL WITHIN THE AMBIT OF BANKING ACTIVITY. HENCE, HE DENIED THE DEDUCTION TH EREON U/S 80P(2)(A)(I) OF THE ACT. AGGRIEVED BY THIS, THE ASSESSEE CARRIED THE MATTER INTO THE APPEAL BEFORE THE LD. CIT(A). THE ATTENTION OF THE LD . CIT(A) WAS DRAWN TO THE DEFINITION OF BANKING ACTIVITY AS GIVEN IN BANK ING REGULATION ACT, 1949 WHEREIN THE SAID ACTIVITY WAS COVERED. THE LD. CIT(A) E XAMINED THE PROVISIONS OF SEC. 6(1)(B) OF BANKING REGULATION AC T, 1949 AND HELD THAT THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION ON SUCH INCO ME US/ 80P(2)(A)(I) OF THE ACT. AGGRIEVED BY THIS, THE REVENUE IS IN APPEA L BEFORE US. 5. THE DR NARRATED THE FACTS AND PLACED STRONG RELIA NCE ON THE ORDER OF THE AO. 6. WE HAVE CONSIDERED THE SUBMISSIONS MADE BY THE L D. DR AND THE LEGAL PROVISIONS. IT IS NOT IN DISPUTE THAT ASSESSE E IS COOPERATIVE BANK AND IS ELIGIBLE FOR DEDUCTION U./S 80P(2) OF THE ACT IN RESPECT OF ITS INCOME FROM BANKING ACTIVITIES. ON THE IMPUGNED INCOME, THE AO DENIED THE DEDUCTION MERELY FOR THE REASON THAT IN HIS OPINION, SUCH ACT IVITY DID NOT FALL WITHIN 3 THE AMBIT OF BANKING ACTIVITIES. HOWEVER, THE SAID A CTIVITY AS PER PROVISIONS OF SEC. 6 (1)(B) OF THE BANKING REGULATION ACT, 194 9, THE ACTIVITY OF COLLECTING THE AMOUNT FROM THE CUSTOMERS AND ISSUE OF GOODS RELEASE ORDER WHEREIN THE STATE GOVT. IS A PARTY, IN OUR OPINION, IS A BANKING ACTIVITY. HENCE, WE HOLD THAT ORDER OF THE LD. CIT(A) IS CORREC T IN LAW. THUS, THIS GROUND OF THE REVENUE IS DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 24.9.2009. SD/- SD/- JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 24.9.2009 {VYAS}