Jafari Momin Vikas Co-op. Credit Society Ltd., Sidhpur V. The CIT, Ahmedabad

ITA 902/AHD/2012

• Counselvise Citation: 90220514 RSA 2012
• Duration Of Justice: 1 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 24-04-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B K S PANDYA
• Assessee Lawyers: J M TRIVEDI
• Section: 56; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE S/SHRI D. K. TYAGI, JM AND T. R. MEENA, AM) ITA NO.902/AHD/2012 A. Y.: 2007-08 JAFARI MOMIN VIKASH CO-OP. CREDIT SOCIETY LTD., AT. & POST KAKOSHI, TAL. SIDDHPUR PIN 384 290 PA NO. AAAAJ 1053F VS THE COMMISSIONER OF INCOME TAX, GANDHINAGAR, 1 ST FLOOR, NATURE VIEW BUILDING , ASHRAM ROAD, AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY SHRI J. M. TRIVEDI, AR RESPONDENT BY SHRI B. K. S. PANDYA, CIT DR DATE OF HEARING: 20-06-2012 DATE OF PRONOUNCEMENT: 20-06-2012 O R D E R PER T. R. MEENA: THIS IS ASSESSEES APPEAL ARISING OUT OF THE ORDER OF THE LEARNED CIT, GANDHINAGAR PASSED U/ S 263 OF THE IT ACT DATED 29-02-2012 FOR ASSESSMENT YEAR 2007-08. 2. THE ASSESSEE IS A CO-OPERATIVE SOCIETY. THE ASSE SSEE HAD CLAIMED DEDUCTION U/S 80P (2) (A) (I) OF THE ACT OF RS.77,50,897/-. THE CLAIM HAD BEEN ALLOWED BY THE AO IN THE ORDER PASSE D U/S 143 (3) OF THE ACT, BUT IT WAS HELD BY THE CIT THAT THIS ISSUE HAS NOT BEEN EXAMINED IN THE LIGHT OF THE PROVISIONS OF SECTION 80P (4) OF THE ACT INSERTED BY THE FINANCE ACT, 2006 WITH EFFECT FROM 01-04-2007. SHOW CAUSE NOTICE WAS ISSUED BY THE CIT ON 16-01-2012 TO THE ASSESSEE. ITA NO.902/AHD/2012 (AY: 2007-08) JAFARO MOMIN VOKASH CO-OP. CREDIT SOCIETY LTD. VS C IT, GANDHINAGAR 2 FINALLY, THE CIT HELD THAT THE AOS ORDER DATED 7-12-2009 FOR AY 2007-08 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE TO THE EXTENT OF NON-VERIFICATION OF DEDUCTION CLAIMED U/S 80P (2) (A) (I) OF THE ACT IN THE LIGHT OF THE PROVISIONS OF SECTION 80 OP(4) OF THE ACT AND SET ASIDE THE ORDER OF THE AO FOR FRESH ASSESSM ENT AND TO DECIDE THE CASE AS PER LAW IN ACCORDANCE WITH THE DISCUSS IONS MADE IN THE ORDER PASSED U/S 263 OF THE ACT. 3. THE ASSESSEE WAS AGGRIEVED WITH THE ORDER OF THE CIT. THE LEARNED COUNSEL FOR THE ASSESSEE FILED COPY OF THE DECISION OF THE ITAT BANGALORE B BENCH IN THE CASE OF ACIT VS M/S . BANGALORE COMMERCIAL TRANSPORT CREDIT CO-OPERATIVE SOCIETY LT D. IN ITA NO.1069/BANG/2010 DATED 08-04-2011 IN WHICH THE AO HAD NOT ALLOWED DEDUCTION U/S 80P (2) (A) (I) OF THE ACT B ECAUSE THE ASSESSEE WAS IN BANKING BUSINESS AND WAS NOT ENTITLED TO CLA IM DEDUCTION U/S 80 P(2) (A) (I) OF THE ACT. THE ITAT BANGALORE B BENCH DECIDED THE APPEAL IN FAVOUR OF THE ASSESSEE AND AGAINST THE RE VENUE BY OBSERVING AT PAGE 5 PARA 9.3 OF THE ORDER WHICH IS REPRODUCED AS UNDER: 9.3 IF THE INTENTION OF THE LEGISLATURE WAS NOT TO GRANT DEDUCTION U/S 80 P (2) (A) (I) TO COOPERATIVE SOCIE TIES CARRYING ON THE BUSINESS OF PROVIDING CREDIT FACILITIES TO I TS MEMBERS, THEN THIS SECTION WOULD HAVE BEEN DELETED. THE NEW PROVISO TO SECTION 80 P(4) WHICH IS BROUGHT INTO STATURE IS AP PLICABLE ONLY TO COOPERATIVE BANKS AND NOT TO CREDIT COOPERATIVE SOCIETIES. THE INTENTION OF THE LEGISLATURE OF BRINGING IN COO PERATIVE BANKS INTO THE TAXATION STRUCTURE WAS MAINLY TO BRING IN PAR WITH COMMERCIAL BANKS. SINCE THE ASSESSEE IS A COOPERATI VE SOCIETY AND NOT A COOPERATIVE BANK, THE PROVISIONS OF SECTI ON 80 P (4) WILL NOT HAVE APPLICATION IN THE ASSESSEES CASE AN D THEREFORE, IT ITA NO.902/AHD/2012 (AY: 2007-08) JAFARO MOMIN VOKASH CO-OP. CREDIT SOCIETY LTD. VS C IT, GANDHINAGAR 3 IS ENTITLED TO DEDUCTION U/S 80 P(2)(A)(I) OF THE A CT. HENCE, WE ARE OF THE VIEW THAT THE ORDER OF THE CIT(A) IS COR RECT AND IN ACCORDANCE WITH LAW AND NO INTERFERENCE IS CALLED F OR. THE LEARNED COUNSEL FOR THE ASSESSEE ALSO FILED WRI TTEN SUBMISSION IN ITS PAPER BOOK PAGE 11 AND 12 WHICH READS AS UNDER: DEFINITION OF STATE CO-OPERATIVE BANK AND CENTR AL CO- OPERATIVE BANK IS GIVEN IN CLAUSE (CCVI) OF SECTIO N 56 (C). AS PER THE SAID DEFINITION STATE CO-OPERATIVE BANK AND CENTRAL CO-OPERATIVE BANK SHALL HAVE MEANINGS RESPECTIVELY ASSIGNED TO THEM IN THE NATIONAL BANK FOR AGRICULTURAL AND R URAL DEVELOPMENT ACT, 1981 (61 OF 1981). AS PER SECTION 2 (D) OF THE NATIONAL BANK FOR AGRIC ULTURAL AND RURAL DEVELOPMENT ACT, 1981; CENTRAL COOPERATIVE BANK MEANS THE PRINCIPAL CO-OPE RATIVE SOCIETY IN DISTRICT IN A STATE, THE PRIMARY OBJECT OF WHICH IS THE FINANCING OF OTHER CO-OPERATIVE SOCIETIES IN THAT D ISTRICT; PROVIDED THAT IN ADDITION TO SUCH PRINCIPAL SOCIETY IN DISTRICT, OR WHERE THERE IS NO SUCH PRINCIPAL SOCIETY IN A DISTR ICT, THE STATE GOVERNMENT MAY DECLARE ANY ONE OR MORE COOPERATIVE SOCIETIES CARRYING ON THE BUSINESS OF FINANCING OTH ER CO- OPERATIVE SOCIETIES, IN THAT DISTRICT TO BE ALSO OR TO BE A CENTRAL COOPERATIVE BANK OR CENTRAL CO-OPERATIVE BANKS WITH IN THE MEANING OF THIS DEFINITION. AS PER SECTION 2 (U) OF THE NATIONAL BANK FOR AGRIC ULTURAL AND RURAL DEVELOPMENT ACT, 1981; STATE COOPERATIVE BANK MEANS THE PRINCIPAL CO-OPERATIVE SOCIETY IN A STATE, THE PRIMARY OBJECT OF WHICH IS THE FINANCING OF OTHER CO-OPERATIVE SOC IETIES IN THE STATE: PROVIDED THAT IN ADDITION TO SUCH PRINCIPAL SOCIETY IN A STATE, OR WHERE THERE IS NO SUCH PRINCIPAL SOCIETY IN A STATE, THE STATE GOVERNMENT MAY DECLARE ANY ONE OR MORE COOPER ATIVE SOCIETIES CARRYING ON BUSINESS IN THAT STATE TO BE ALSO OR TO BE A ITA NO.902/AHD/2012 (AY: 2007-08) JAFARO MOMIN VOKASH CO-OP. CREDIT SOCIETY LTD. VS C IT, GANDHINAGAR 4 STATE CO-OPERATIVE BANK OR CENTRAL CO-OPERATIVE BAN KS WITHIN THE MEANING OF THIS DEFINITION. THE PLAIN READING OF ABOVEMENTIONED TWO PROVISIONS MAKES IT AMPLY CLEAR THAT CO-OPERATIVE CREDIT SOCIETY NOT HA VING PRIMARY OBJECT OF FINANCING OF OTHER CO-OPERATIVE SOCIETIES IN EITHER DISTRICT OR IN THE STATE CANNOT BE CONSTRUED TO BE ARE CENTRAL CO-OPERATIVE BANK OR STATE CO-OPERATIVE BANK AS PER THE NATIONAL BANK FOR AGRICULTURAL AND RURAL DEVELOPMEN T ACT, 1981. 4. AT THE TIME OF HEARING, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT ONLY GRIEVANCE OF THE ASSESSEE WAS T HAT THE LEARNED CIT WHILE DIRECTING THE AO TO RE-FRAME THE ASSESSME NT ORDER IN ACCORDANCE WITH LAW, HAS ALSO MADE CERTAIN OBSERVAT IONS IN HIS ORDER ON THE ISSUE OF ALLOWABILITY OF DEDUCTION U/S 80 P (2) (A) (I) OF THE ACT WHICH WAS CONTRARY TO THE DECISION OF THE ITAT BANG ALORE B BENCH IN THE CASE OF ACIT VS M/S. BANGALORE COMMERCIAL TR ANSPORT CREDIT CO-OPERATIVE SOCIETY LTD. IN ITA NO.1069/BANG/2010 FOR AY 2007-08 DATED 08-04-2011. HE, THEREFORE, SUBMITTED THAT THE DIRECTION OF THE LEARNED CIT MAY KINDLY BE MODIFIED TO THE EXTENT TH AT THE AO WILL RE- FRAME THE ASSESSMENT ORDER IN ACCORDANCE WITH LAW I GNORING THE OBSERVATIONS MADE BY THE LEARNED CIT ON ALLOWABILIT Y OF DEDUCTION U/S 80 P (2) (A) (I) OF THE ACT . THE LEARNED DR DID NO T OBJECT TO THIS SUBMISSION OF THE ASSESSEE. THEREFORE, THE DIRECTIO N OF THE LEARNED CIT IS MODIFIED AND THE AO IS DIRECTED TO RE-FRAME THE ASSESSMENT ORDER IN ACCORDANCE WITH LAW IGNORING THE OBSERVATI ON OF THE LEARNED CIT ON ALLOWABILITY OF DEDUCTION U/S 80 P(2) (A) (I ) OF THE ACT. ITA NO.902/AHD/2012 (AY: 2007-08) JAFARO MOMIN VOKASH CO-OP. CREDIT SOCIETY LTD. VS C IT, GANDHINAGAR 5 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 20-06-2012 SD/- SD/- (D. K. TYAGI) JUDICIAL MEMBER (T. R. MEENA) ACCOUNTANT MEMBER LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 25-06-2012 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 26-06-2012/27-06-12 OTHER MEMBER : 28-06-12- 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 28-06-12 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: 28-06-12 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 28-06-12 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK: 28-06-12 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: