The Jeeda Multi-Purpose Coop.Society Ltd, Bathinda V. The Deputy Commissioner of Income tax, Bathinda

ITA 81/ASR/2010

• Counselvise Citation: 8120914 RSA 2010
• Duration Of Justice: 1 year(s) 9 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-12-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 16-02-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIK CHAND
• Section: 143(3); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.L. KARWA, HONBLE VICE PRESIDENT AND SH. D.K. SRIVASTAVA, ACCOUNTANT MEMBER I.T.A. NO.81(ASR)/2010 ASSESSMENT YEAR: 2006-07 THE JEEDA MULTIPURPOSE CO-OP.SOCIETY LTD. VS. D.C.I .T. VILL. JEEDA, DISTT. BHATINDA. CIRCLE II, BATHIND A PAN:AAAT6143Q (APPELLANT) (RESPONDENT) APPELLANT BY: WRITTEN SUBMISSIONS RESPONDENT BY: SH. AMRIK CHAND, DR DATE OF HEARING :07/12/2011 DATE OF PRONOUNCEMENT:08.12.2010 ORDER PER H.L. KARWA, VP, THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE CIT(A), BHATINDA, DATED 20 TH NOV., 2009, RELATING TO ASSESSMENT YEAR 2006- 07. 2. IN THIS APPEAL, THE ASSESSEE HAS TAKEN FOLLOWING GROUNDS: 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN UPHOLDING THE ADDITION/ASSESSING OF INCOME AT RS.2,32,790/-. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN REJECTING THE P LEA OF 2 THE ASSESSEE THAT WE HAVE NO SUNDRY DEBTORS AND IN TT. INCOME IS ONLY ON THE ADVANCING OF LOANS AND NOT ON DEBITS ON ACCOUNT OF SALE OF COMMODITIES. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN UPHOLDING THE ADDITION/ASSESSING OF THE INCOME AT RS.2,32,790/- A S THE INTEREST INCOME FROM BANKING ACTIVITIES IS EXEMPT U /S 80P(A)(I) OF THE INCOME-TAX ACT, 1961. 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE IS AN AGRICULTURAL SERVICE SOCIETY. THE SOCIETY IS A REG ISTERED SOCIETY WITH THE REGISTRAR OF CO-OPERATIVE SOCIETIES AND THE MAIN OB JECT OF THE SOCIETY IS TO PROVIDE FERTILIZERS, CATTLE FEEDS, PESTICIDES AND S EEDS AND SUCH OTHER COMMODITIES ON SUBSIDIES RATES TO THE MEMBERS OF TH E SOCIETY WHO ARE PURELY AGRICULTURISTS. THE SOCIETY CLAIMED DEDUCTION UNDER SECTION 80P(2)(A)(IV)OF THE INCOME-TAX ACT, 1961 ( IN SHORT, THE ACT). IT WAS ONE OF THE CONTENTIONS OF THE ASSESSEE THAT IN PRECEDING YEARS, THE A.O. HAS ALLOWED EXEMPTION U/S 80P(2)(A)(IV) AND FACTS OF THE CASE ARE SIMILAR TO THE PRESENT CASE. THE A.O. DISALLOWED THE CLAIM OF DEDUCTION U/S 80P(2)(A)(IV) OF THE ACT, OF THE INTEREST INCOME RECEIVED BY SOCIETY FROM ITS MEMBERS ON THE SUPPLY OF AGRICULTURE COMMODITY. ACCORDING TO THE ASSESSING OFFICER, THE PROVISION OF SECTION 80P(2)(A)(IV) OF THE ACT, DOES NOT SPEAK OF DEDUCTI ON TO INTEREST RECEIVED FROM ITS MEMBERS WHICH IS ENTIRELY OF DIFFERENT NAT URE. THE A.O. FURTHER OBSERVED THAT EACH ASSESSMENT YEAR IS SEPARATE ASSE SSMENT YEAR AND THERE IS NO BAR IN TAKING THE CORRECT VIEW IN ANOTHER YEAR. HE, THEREFORE, HELD THAT INTEREST INCOME IS NOT TAX FREE AND DOES NOT QUALIF Y FOR DEDUCTION U/S 80P. 3 4. ON APPEAL, THE LD. CIT(A) DISMISSED THE APPEAL O F THE ASSESSEE AND CONFIRMED THE ORDER OF THE A.O. NOW AGGRIEVED WITH THE FINDINGS OF THE CIT(A), THE ASSESSEE IS IN APPEAL BEFORE THIS TRIB UNAL. 5. IN THIS CASE, THE ASSESSEE HAS SUBMITTED WRITTEN SUBMISSIONS, WHICH ARE AVAILABLE ON RECORD. IN THE WRITTEN SUBMISSIONS, TH E ASSESSEE HAS SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN UPHOLDING THE ADDI TION OF RS.2,37,790/-, WHICH WAS REDUCED TO RS.1,82,790/- AS THE A.O. GAVE RELIEF U/S 80P(2)(C)(II) READ WITH SECTION 154 ON THE APPLICATION OF THE ASS ESSEE VIDE HIS ORDER DATED 25.05.2010. FURTHER, THE ASSESSEE HAS SUBMITTED THA T THERE CAN BE NARROW INTERPRETATION THAT CREDIT SHOULD BE ONLY OF CASH A ND NOT ON ACCOUNT OF GOODS SOLD ON CREDIT BASIS. THIS IS ALSO AS PER THE ACCOU NTING PRINCIPLES THAT CREDIT IS TO BE TAKEN NOT ONLY FOR LOAN BORROWED BUT ALSO FO R THE GOODS SOLD ON CREDIT TO CUSTOMERS/MEMBERS. THE CREDIT CAN BE OF MONEY OR GOODS AS PER DEFINITION OF THE WORD CREDIT AT PAGE 331 GIVEN IN BLACKS LAW DICTIONARY (5 TH EDITION), WHICH IS REPRODUCED BELOW: CREDIT THE ABILITY OF A BUSINESS OR PERSON TO BORROW MONE Y, OR OBTAIN GOODS ON TIME, IN CONSEQUENCE OF THE FAVOURA BLE OPINION HELD BY THE PARTICULAR LENDER AS TO SOLVENC Y AND RELIABILITY. 5.1. THE ASSESSEE FURTHER SUBMITTED THAT LIBERAL AP PROACH SHOULD BE TAKEN AS SECTION 80P HAS BEEN ENACTED WITH A VIEW TO ENCO URAGE AND PROMOTE GROWTH OF CO-OPERATIVE SECTOR IN THE ECONOMIC LIFE OF THE COUNTRY AND IN PURSUANCE OF THE DECLARED POLICY OF THE GOVERNMENT. 4 5.2. IT IS ALSO SUBMITTED BY THE ASSESSEE IN ITS WR ITTEN SUBMISSIONS THAT THE DEPARTMENT HAS NOT IMPOSED TAX ON THE ASSESSEE IN T HE PRIOR ASSESSMENT YEARS TO THE ASSESSMENT YEAR UNDER APPEAL AS MENTIONED IN PARA 2 & 3 OF THE ASSESSMENT ORDER. SIMILARLY, THE A.O. HAS NOT IMPOS ED TAX ON THE ASSESSEE IN THE NEXT FOUR ASSESSMENT YEARS SO BY APPLYING THE R ULE OF CONSISTENCY THE TAX CANNOT BE IMPOSED ON THE ASSESSEE ON SUCH INCOME. R ELIANCE WAS PLACED ON THE DECISION OF THE ITAT, AMRITSAR BENCH, DATED 10 .06.2011 IN THE CASE OF THE PACCA KALAN MULTI-PURPOSE CO-OP. SOCIETY, PACCA KALAN VS. DCIT, CIRCLE-II, BHATINDA, PASSED IN ITA NO.109(ASR)/2010 , RELATING TO ASSESSMENT YEAR 2006-07. 6. IN SUPPORT OF REVENUE CASE, SHRI AMRIK CHAND, T HE LD. DR, HEAVILY RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAV E ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IN THE CASE OF THE PACCA KALAN MULTI-PURPOSE CO-OP. SOCIETY, PACCA KALAN (SUPRA), THE ASSESSEE CLAIMED DEDUCTION U/S 80P(2)(A)(IV) OF THE ACT. THE A.O. DI SALLOWED INTEREST INCOME EARNED BY THE ASSESSEE FROM PROVIDING CREDIT FACILI TIES TO ITS MEMBERS ON THE SUPPLY OF FERTILIZERS, PESTICIDES, SEEDS ETC. IN FU RTHER, APPEAL, THE LD. CIT(A) UPHELD THE ORDER OF THE A.O. WHILE DECIDING THE APP EAL OF THE ASSESSEE, THIS BENCH OF THE TRIBUNAL ALLOWED THE CLAIM OF THE ASSE SSEE OBSERVING AS UNDER: 6. WE HAVE CAREFULLY PERUSED AND CONSIDERED THE E NTIRE FACT SITUATION OF THE CASE AS WELL AS RIVAL SUBMISSIONS MADE BY THE CONTENDING PARTIES. IT IS AN UNDISPUTED FACT THAT THE AO UNDER IDENTICAL SET OF FACTS AND CIRCUMSTANCES OF THE CAS E, DULY CONSIDERED AND ACCEPTED THE CLAIM OF THE ASSESSEE FOR THE ASSE SSMENT YEARS 2003- 5 04, 2004-05 & 2009-10 UNDER SCRUTINY ASSESSMENT MAD E UNDER SECTION 143(3) OF THE ACT. HOWEVER, DURING THE ASSESSMENT Y EAR 2006-07, THE CLAIM WAS NOT ACCEPTED. IN VIEW OF THIS, THE QUASI -JUDICIAL AUTHORITY LIKE A.O. CANNOT CHANGE HIS OPINION ON THE FOUNDATI ON OF SUBJECTIVITY, ARBITRARINESS AND SURMISES WITHOUT BRINGING ON RECO RD CLEARLY DIFFERENT SET OF FACTS AND CIRCUMSTANCES. IN THE ASSESSMENT Y EAR UNDER CONSIDERATION, THIS BECOMES MORE IMPERATIVE AND RE LEVANT PARTICULARLY, WHEN THE AO HAS ACCEPTED THE CLAIM O F THE ASSESSEE UNDER SCRUTINY ASSESSMENT, AS MENTIONED EARLIER. TH EREFORE, THE CONCEPT OF CONSISTENCY AND DOCTRINE OF RES-JUDICATA IS APPLICABLE TO THE FACTS AND CIRCUMSTANCES OF THE PRESENT CASE. IN THIS CASE, THE ASSESSEE PLACED RELIANCE ON THE FOLLOWING DECISIONS : I) BERGER PAINTS INDIA LTD. CIT, 266 ITR 99 (SC) II) RADHASOAMI SATSANG VS. CIT 193 ITR 321 (SC) 6.1 THE CASE OF THE ASSESSEE IS THAT THE APPELLANT IS CO-OPERATIVE CREDIT SOCIETY, WHEREAS THE CASE LAWS RELIED UPON B Y THE AO PERTAIN TO CONSUMER CO-OPERATIVE SOCIETY. WE HAVE GONE THROUGH THE CASE LAWS RELIED UPON BY THE AO AND FOUND THE SAME ARE NOT A PPLICABLE TO THE FACT SITUATION OF THE PRESENT CASE, AS THE OBJECT O F THE ASSESSEE, IN SUCH A CASE IS DIAMETRICALLY OPPOSITE, TO THE OBJECT OF THE PRESENT ASSESSEE. THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE PHRASE ATTRIBUTABLE IS APPEARING UNDER SECTION 80P, HAS WIDE AMBIT VIS--VIS, THE PHRASE DERIVED FROM. HE SUBMITTED HIS CONTENTIO N ON THE BASIS OF THE DECISION OF CAMBAY ELECTRIC SUPPLY INDUSTRIAL CO., LTD. VS. CIT 113 ITR 84 (SC). WE ARE IN COMPLETE AGREEMENT WITH THE CONTENTION RAISED BY THE ASSESSEE AND FOUND THAT THE CONTENTIO N HAS MERIT BASED ON THE PHRASE USED UNDER SECTION 80P(2)(A)(IV) OF T HE ACT. IN VIEW OF THIS, THE FINDINGS OF THE LD. CIT(A) ARE SET ASIDE AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 7.1. THE FACTS OF THE PRESENT CASE ARE IDENTICAL TO THE FACTS OF THE CASE ADJUDICATED BY THIS BENCH OF THE TRIBUNAL IN THE CA SE OF THE PACCA KALAN MULTI-PURPOSE CO-OP. SOCIETY, PACCA KALAN (SUPRA). THEREFORE, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL DATED 10.06.201 1 IN THE CASE OF THE 6 PACCA KALAN MULTI-PURPOSE CO-OP. SOCIETY, PACCA KAL AN (SUPRA), WE SET ASIDE THE ORDER OF THE CIT(A) AND ALLOW THE APPEAL OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 8TH DECEMBER, 2011. SD/- SD/- (D.K.SRIVASTAVA) (H.L. KARWA) ACCOUNTANT MEMBER VICE PRESIDENT DATED: 8TH DECEMBER, 2011 /SKR/ COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE: THE JEEDA MULTIPURPOSOE CO-OP. SOCIET Y LTD. BATHINDA 2. THE DCIT,CIR.II, BATHINDA. 3. THE CIT(A), 4. THE CIT, 5. THE SR DR TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH : AMRITSAR.