The Anand Catholic Co. Op. Credit Society Ltd., Anand V. The Income Tax Officer, Vapi Ward-5, Anand

ITA 9/AHD/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 8175 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 02-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: General deduction

Judgement Text

, ,LK ,LK,LK ,LK- -- -,E ,E,E ,E- -- -LH LHLH LH IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD OLHE VGEN] OLHE VGEN] OLHE VGEN] OLHE VGEN] YS[KK LNL; YS[KK LNL; YS[KK LNL; YS[KK LNL; , BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ./ I.T.A. NOS.09 & 10/AHD/2017 ( / ASSESSMENT YEARS : 2012-13 & 2013-14) ANAND CATHOLIC CO.OP CREDIT SOCIETY LTD., NR. D CABIN, GAMDI, TAL & DIST.- ANAND 388 001 / VS. ITO, WARD 5, ANAND. ./ ./ PAN/GIR NO. : AAAAA 5138 Q ( / APPELLANT ) .. ( !' / RESPONDENT ) # / APPELLANT BY : --NONE-- !' $ # / RESPONDENT BY : SHRI PRASOON KABRA, SR. D.R. % &' $ () / DATE OF HEARING 22/05/2018 *+,- $ () / DATE OF PRONOUNCEMENT 29/05/2018 . / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEALS HAVE BEEN FILED AT THE INSTAN CE OF THE ASSESSEE AGAINST THE SEPARATE APPELLATE ORDERS OF THE COMMIS SIONER OF INCOME TAX(APPEALS)-4, VADODARA [CIT(A) IN SHORT] VIDE APPEAL NOS.CAB/4- 121/2015-16 & CAB/4-450/2015-16 DATED 26/09/2018 & 30/09/2016 ARISING IN THE ASSESSMENT ORDER PASSED UNDER S.143(3) OF T HE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS 'THE ACT') D ATED 11/03/2015 & 26/10/2015 RELEVANT TO ASSESSMENT YEARS (AYS) 2012- 13 & 2013-14 RESPECTIVELY. ITA NOS.09 & 10/AHD/2017 M/S. ANAND CATH OLIC CO.OP. CREDIT SOCIETY LTD.VS. ITO ASST.YEAR 2012-13 & 2013-14 - 2 - 2. SINCE COMMON ISSUES HAVE BEEN RAISED BY THE ASSE SSEE IN ITS BOTH THE APPEALS, THEREFORE, WE DECIDED TO CLUB BOTH OF THEM FOR THE PURPOSE OF HEARING AND ADJUDICATION FOR THE SAKE OF BREVITY. 3. FIRST WE TAKE UP ITA NO.09/AHD/2017 FOR ASST. YEAR 2012-13. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL : 1. L'ND A.O. ERRED IN LAW AND ON FACTS IN DISALLOW ING DEDUCTION CLAIMED U/S. 80P(2)(A)(I). 2. L'ND A.O. ERRED IN LAW AND ON FACTS IN DISALLOW ING DEDUCTION INTEREST EARNED ON BANK FDRS BY THE APPELLANT SOCIE TY AMOUNTING TO RS.40.17,802/-, INTEREST INCOME FROM C OOPERATIVE SOCIETY OF RS.285/ - AND OTHER INCOME OF RS.34,147/ - AS INCOME FROM OTHER SOURCES AND NOT ELIGIBLE FOR DEDUCTION U/S.80P(2)(A)(I). 3. L'ND A.O. ERRED IN LAW AND ON FACTS IN HOLDING INTEREST INCOME EARNED BY YOUR APPELLANT ON ITS BANK DEPOSITS AND O THER INCOME AMOUNTING TO RS.40,17,802/- AS INCOME FROM OTHER SO URCES AND DISALLOWANCE OF DEDUCTION CLAIMED U/S 80P THEREON. 4. L'ND A.O. ERRED IN LAW AND ON FACTS IN HOLDING ENTIRE INTEREST INCOME EARNED ON OUR HANK DEPOSITS AMOUNTING TO RS. 40,17,802/- AS INCOME FROM OTHER SOURCES. AND NOT ALLOWING PROP ORTIONATE EXPENSES INCURRED BY THE SOCIETY TO EARN SUCH INCOM E. 5. L'ND A.O. ERRED IN LAW AND ON FACTS IN NOT ADJU STING INCOME CHARGEABLE UNDER THE HEAD OF BUSINESS AND PROFESSIO N AFTER HOLDING INTEREST INCOME EARNED ON OUR HANK DEPOSITS AMOUNTING TO RS. 40,17,802/- AS INCOME FROM OTHER SOURCES. 6. LND AO ERRED IN LAW AND ON FACTS IN NOT ALLOWIN G A GENERAL DEDUCTION OF RS.50,000/- U/S.80P(2)(C) ELIGIBLE TO EVERY COOPERATIVE SOCIETY. 4. AT THE OUTSET, IT WAS OBSERVED THAT LD. COUNSEL FOR THE ASSESSEE HAS APPLIED FOR ADJOURNMENT PETITION, BUT IT WAS POINTE D OUT BY THE LD. DR THAT THE ISSUE RAISED BY THE ASSESSEE HAS BEEN SETT LED BY THE HONBLE GUJARAT HIGH COURT, IN THE CASE OF STATE BANK OF IN DIA VS. COMMISSIONER OF INCOME TAX REPORTED IN 389 ITR 578 AGAINST THE A SSESSEE. ITA NOS.09 & 10/AHD/2017 M/S. ANAND CATH OLIC CO.OP. CREDIT SOCIETY LTD.VS. ITO ASST.YEAR 2012-13 & 2013-14 - 3 - ACCORDINGLY, THE LD. DR PRAYED BEFORE US TO REJECT THE ADJOURNMENT PETITION FILED BY THE ASSESSEE AND DECIDE THE ISSUE ON MERIT. AFTER HEARING THE LD. DR, WE DECIDED TO REJECT THE ADJOURNMENT PE TITION AND PROCEEDED TO HEAR THE APPEAL FILED BY THE ASSESSEE. THE INTERCONNECTED ISSUE RAISED BY THE ASSESSEE IN ITS ALL GROUNDS OF APPEAL IS THAT LD. CIT(A) ERRED IN CONFIRMING THE O RDER OF AO BY DISALLOWING THE DEDUCTION U/S 80P(2)(A)(I) OF THE A CT FOR RS. 40,52,234/- ONLY. 5. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IN TH E PRESENT CASE IS A CO- OPERATIVE CREDIT SOCIETY AND ENGAGED IN PROVIDING C REDIT FACILITIES TO ITS MEMBERS. THE ASSESSEE DURING THE YEAR HAS EARNED IN TEREST INCOME AND OTHER INCOME AS DETAILED UNDER: SR. NO. HEAD OF INCOME AMOUNT 1. INTEREST ON THE ADVANCE GIVEN TO MEMBERS 2 7,00,654 2. INTEREST INCOME ON THE DEPOSITS IN THE BANKS 40 ,17,802 3. INTEREST INCOME ON THE DEPOSITS WITH COOPERATIVE BANKS 285 4. OTHER INCOME 34,147 THE ASSESSEE IN ITS INCOME TAX RETURN HAS CLAIMED T HE DEDUCTION U/S 80P(2)(A)(I) OF THE ACT, IN RESPECT OF ALL THE AFOR ESAID INCOME AMOUNTING TO RS.10,48,259/- ONLY. HOWEVER, THE AO WAS OF THE VIEW THAT THE DEDUCTION U/S 80P(2)(A)(I) OF THE ACT IS LIMITED ON LY, IN RESPECT OF INTEREST INCOME EARNED BY THE ASSESSEE FROM THE ADVANCES GIV EN TO THE MEMBERS. THEREFORE, THE AO TREATED THE INTEREST INCOME EARNE D FROM SHORT TERM DEPOSITS WITH BANKS, COOPERATIVE BANKS AND OTHER IN COME FOR ITA NOS.09 & 10/AHD/2017 M/S. ANAND CATH OLIC CO.OP. CREDIT SOCIETY LTD.VS. ITO ASST.YEAR 2012-13 & 2013-14 - 4 - RS.40,17,802/-, 285/-, 34,147/- RESPECTIVELY, AS IN COME FROM OTHER SOURCES AND HELD THAT THE SAME WAS NOT ALLOWABLE FO R DEDUCTION U/S 80P(2)(A)(I) OF THE ACT IN VIEW OF THE DECISION OF THE HONBLE INCOME TAX APPELLATE TRIBUNAL, AHMEDABAD D BENCH, IN THE CAS E OF MAFATLAL INDUSTRIES LTD IN ITA NO.2797/AHD/2012 VIDE ORDER D ATED 07/02/2014. ACCORDINGLY, THE AO DISALLOWED THE DEDUCTION CLAIME D BY THE ASSESSEE U/S 80P(2)(A)(I) OF THE ACT AND ADDED THE SAME FOR RS.40,52,234/- TO THE TOTAL INCOME OF THE ASSESSEE. 6. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO LD. CI T(A) WHO CONFIRMED THE ORDER OF THE AO. BEING AGGRIEVED BY THE ORDER OF LD. CIT(A) ASSESSEE IS IN SECOND APPEAL BEFORE US. THE LD. DR BEFORE US VEHEMENTLY SUPPORTE D THE ORDER OF AUTHORITIES BELOW. 7. WE HAVE HEARD THE LD DR AND PERUSED THE MATERIAL S AVAILABLE ON RECORD. THE ASSESSEE IN ITS INCOME TAX RETURN HAS S HOWN FOLLOWING GROSS INCOME: SR. NO. HEAD OF INCOME AMOUNT 1. INTEREST ON THE ADVANCE GIVEN TO MEMBERS 2 7,00,654 2. INTEREST INCOME ON THE DEPOSITS IN THE BANKS 40 ,17,802 3. INTEREST INCOME ON THE DEPOSITS WITH COOPERATIVE BANKS 285 4. OTHER INCOME 34,147 ITA NOS.09 & 10/AHD/2017 M/S. ANAND CATH OLIC CO.OP. CREDIT SOCIETY LTD.VS. ITO ASST.YEAR 2012-13 & 2013-14 - 5 - 8. THE INTEREST INCOME EARNED BY THE ASSESSEE FROM ITS MEMBERS ON ACCOUNT OF ADVANCE GIVEN TO THEM FOR RS.27,00,654/- IS ALLOWABLE FOR DEDUCTION U/S 80P(2)(A)(I) OF THE ACT. THE FACTS OF THE CASE ARE NOT IN DISPUTE, THEREFORE WE ARE NOT INCLINED TO REPEAT TH E SAME FOR THE SAKE OF BREVITY. 9. THE INTEREST INCOME EARNED BY THE ASSESSEE FROM THE SHORT TERM DEPOSITS MADE WITH THE STATE BANK OF INDIA IS NOT E LIGIBLE FOR DEDUCTION U/S 80P(2)(A)(I) OF THE ACT, IN VIEW OF THE JUDGMEN T OF THE GUJARAT HIGH COURT IN THE CASE OF STATE BANK OF INDIA VS. CIT RE PORTED IN 389 ITR 578. THEREFORE, WE HOLD THAT THE ASSESSEE CANNOT CLAIM T HE DEDUCTION U/S 80P(2)(A)(I) OF THE ACT IN RESPECT OF INTEREST INCO ME EARNED FROM SHORT TERM DEPOSITS MADE WITH THE BANK. HOWEVER, THE ASSE SSEE IS ENTITLED TO CLAIM THE DEDUCTION OF THE EXPENDITURE INCURRED BY IT IN CONNECTION WITH SUCH INTEREST INCOME. THEREFORE, WE DIRECT THE AO T O TAKE THE NET INTEREST INCOME FOR THE PURPOSE OF DISALLOWANCE OF DEDUCTION U/S 80P(2)(A)(I) OF THE ACT. 10. NOW COMING TO THE INTEREST INCOME EARNED BY THE ASSESSEE ON THE DEPOSITS MADE WITH OTHER COOPERATIVE BANKS FOR RS. 285/- ONLY, IN THIS REGARD WE NOTE THAT THE ASSESSEE IS ELIGIBLE FOR DE DUCTION IN RESPECT OF SUCH INCOME UNDER CLAUSE (D) TO SUB SECTION 2 OF SE CTION 80P OF THE ACT. THEREFORE, WE DIRECT THE AO TO ALLOW THE DEDUCTION OF RS.285/- TO ASSESSEE AS DISCUSSED ABOVE. ITA NOS.09 & 10/AHD/2017 M/S. ANAND CATH OLIC CO.OP. CREDIT SOCIETY LTD.VS. ITO ASST.YEAR 2012-13 & 2013-14 - 6 - 11. NOW COMING TO THE AMOUNT OF DEDUCTION CLAIMED B Y THE ASSESSEE IN RESPECT OF INCOME EARNED BY IT FROM OTHER SOURCE S FOR RS.34,147/-, IN THIS REGARD, WE NOTE THAT THE ASSESSEE IS NOT ENTIT LED FOR DEDUCTION IN RESPECT OF SUCH INCOME IN VIEW OF THE JUDGMENT OF T HE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF MAFATLAL I NDUSTRIES LTDS IN ITA NO.2797/AHD/2012 VIDE ORDER DATED 07/02/2014. THERE FORE, WE DIRECT THE AO NOT TO ALLOW ANY DEDUCTION IN RESPECT OF SUCH IN COME U/S 80P(2)(A)(I) OF THE ACT. 12. THE ASSESSEE IN ITS GROUNDS OF APPEAL HAS ALSO CLAIMED THE DEDUCTION OF RS.50,000/- U/S 80P(2) OF THE ACT. IN THIS REGARD, WE DIRECT THE AO TO ALLOW THE DEDUCTION IN ACCORDANCE TO THE PROVISIONS SPECIFIED U/S 80P(2)(C) OF THE ACT. 13. IN VIEW OF ABOVE, WE DIRECT THE AO TO ADJUDICAT E THE ISSUE AFRESH IN ACCORDANCE WITH THE PROVISIONS OF LAW AND IN THE LI GHT OF THE ABOVE STATED DISCUSSION HENCE, GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 14. NOW COMING TO ITA NO.10/AHD/2017 FOR ASST. YEAR 2013-14. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL: 1. L'ND A.O. ERRED IN LAW AND ON FACTS IN DISALLOW ING DEDUCTION CLAIMED U/S. 80P(2)(A)(I). 2. L'ND A.O. ERRED IN LAW AND ON FACTS IN HOLDING INTEREST INCOME EARNED BY YOUR APPELLANT ON ITS BANK DEPOSITS AND O THER INCOME AMOUNTING TO RS.8,97,438/- AS INCOME FROM OTHER SOU RCES AND DISALLOWANCE OF DEDUCTION CLAIMED U/S.80P THEREON. ITA NOS.09 & 10/AHD/2017 M/S. ANAND CATH OLIC CO.OP. CREDIT SOCIETY LTD.VS. ITO ASST.YEAR 2012-13 & 2013-14 - 7 - 3. L'ND A.O. ERRED IN LAW AND ON FACTS IN HOLDING ENTIRE INTEREST INCOME EARNED ON OUR BANK DEPOSITS AMOUNTING TO RS. 8,97,438/- AS INCOME FROM OTHER SOURCES. AND NOT ALLOWING PROP ORTIONATE EXPENSES INCURRED BY THE SOCIETY TO EARN SUCH INCOM E. 4. L'ND A.O. ERRED IN LAW AND ON FACTS IN ADJUSTI NG INCOME CHARGEABLE UNDER THE HEAD OF BUSINESS AND PROFESSIO N AFTER HOLDING INTEREST INCOME EARNED ON OUR BANK DEPOSITS AMOUNTING TO RS.8,97,438/- AS INCOME FROM OTHER SOURCES. 5. LND AO ERRED N LAW AND ON FACTS IN NOT ALLOWING A GENERAL DEDUCTION OF RS.50,000/- U/S. 80P(2)(C) ELIGIBLE TO EVERY COOPERATIVE SOCIETY. 15. AT THE OUTSET, IT IS OBSERVED THAT THE ISSUE RA ISED BY THE ASSESSEE ARE EXACTLY IDENTICAL TO THE ISSUES IN ITA NO.09/AHD/20 17, WHICH WE HAVE ALREADY DECIDED IN PARAGRAPH 9 TO 13 OF THIS ORDER. THEREFORE, WE DIRECT THE AO TO ADJUDICATE THE ISSUE RAISED BY THE ASSESS EE IN THIS APPEAL IN THE LIGHT OF THE DECISION HELD IN THE OWN CASE OF THE A SSESSEE IN ITA NO.09/AHD/2017. THUS, THE APPEAL FILED BY THE ASSES SEE IS ALLOWED FOR STATISTICAL PURPOSES. 16. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER PRONOUNCED IN OPEN COURT ON 29/05/2018 SD/- SD/- JKTIKY ;KNO JKTIKY ;KNO JKTIKY ;KNO JKTIKY ;KNO OLHE VGEN OLHE VGEN OLHE VGEN OLHE VGEN U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; U;KF;D LNL; YKS[KK LN YKS[KK LN YKS[KK LN YKS[KK LN L; L; L; L; (RAJPAL YADAV) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 29/05/2018 PRITI YADAV, SR.PS ITA NOS.09 & 10/AHD/2017 M/S. ANAND CATH OLIC CO.OP. CREDIT SOCIETY LTD.VS. ITO ASST.YEAR 2012-13 & 2013-14 - 8 - !'# $#! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. /01( % 2( / CONCERNED CIT 4. % 2( ( ) / THE CIT(A)-4, VADODARA. 5. 567 !(&01 , ) 01- , 8 / / DR, ITAT, AHMEDABAD 6. 79 :' / GUARD FILE. % & / BY ORDER, ' 5( !( //TRUE COPY// '/& () ( DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD 1. DATE OF DICTATION 24/05/2018 ( DICTATION-PAD 5 P AGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 25/05/2018. 3. OTHER MEMBER 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S 29/05/2018 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S. 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER