M/s Manjunatheshwara Credit Co-operative Society Ltd , Bangalore V. Income Tax Officer Ward-6(2)(2), Bangalore

ITA 936/BANG/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5902 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 1 month(s) 5 day(s)
• Appeal Type: Income Tax (Transfer Pricing) Appeal
• Pronouncement Date: 01-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 26-03-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR S PALANI
• Assessee Lawyers: CHAITANYA V M
• Keywords: Opportunity of being heard; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC-A BENCH : BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER ITA NO. 936 / BANG/201 8 ASSESSMENT YEAR : 20 1 3 - 14 M/S. MANJUNATHESHWARA CREDIT CO-OPERATIVE SOCIETY LTD., NO. 20, 3 RD MAIN, 2 ND BLOCK, RING ROAD, NANDINI LAYOUT, BANGALORE 560 096. PAN: AAKAS1721M VS. THE INCOME TAX OFFICER, WARD 6 (2) (2), BANGALORE. APPELLANT RESPONDENT APPELLANT BY : SHRI CHAITANYA V.M., ADVOCATE RESPONDENT BY : DR. S. PALANI, ADDL. CIT (DR) DATE OF HEARING : 12 .04.2018 DATE OF PRONOUNCEMENT : 20 .04.2018 O R D E R PER SHRI A.K. GARODIA, ACCOUNTANT MEMBER THIS APPEAL IS FILED BY THE ASSESSEE WHICH IS DIREC TED AGAINST THE ORDER OF LD. CIT(A)-6, BANGALORE DATED21.11.2017 FOR ASSESSMENT YEAR 2013-14. 2. THE GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER. 1. THE ORDER PASSED BY THE AUTHORITIES BELOW TO THE EXTENT WHICH IS AGAINST TO THE APPELLANT IS BAD IN LAW AND CONTRARY TO THE SETTLED PRINCIPLES OF LAW. 2. THE APPELLANT DENIES HIMSELF LIABLE TO BE TAXED ON A TOTAL INCOME OF RS. 30,51,245/- AS ASSESSED BY THE LEARNED ASSESSIN G OFFICER AS AGAINST THE RETURN INCOME OF RS. NIL UNDER THE FACTS AND CI RCUMSTANCES OF THE CASE OF THE APPELLANT. 3. THE ASSESSING OFFICER HAS ERRED IN DISALLOWING T HE CLAIM OF DEDUCTION OF AN AMOUNT OF RS. 30,51,245/- U/S.80P(2 )(A)(I) OF THE ACT ON THE FACT AND CIRCUMSTANCES OF THE CASE. 4. THE CIT(A) ERRED IN COMING TO THE CONCLUSION THA T, THE 'APPELLANT FAILED TO ESTABLISH AS TO HOW THE FACTS OF ITS CASE DIFFERS FROM THAT OF THE JURISDICTIONAL KARNATAKA HIGH COURT IN M/S. TOTGARS CO-OPERATIVE ITA NO.936/BANG/2018 PAGE 2 OF 4 SALE SOCIETY LTD CASE', WITHOUT APPRECIATING THE FA CTS AND CIRCUMSTANCES OF THE CASE. 5. THE ASSESSING OFFICER AND CIT(A) ERRED IN NOT HO LDING THAT THE APPELLANT IS NOT A PRIMARY CO-OP BANK AS REFERRED I N SECTION 5(CCV) OF THE BANKING REGULATION ACT, 1949 ON THE FACTS AND C IRCUMSTANCES OF THE CASE. 6. THE CIT(A) FAILED TO APPRECIATE THAT, INSERTION OF CLAUSE (VIIA) IN SECTION 2(24) OF THE ACT DOES NOT ALTER THE POSITIO N SO FAR AS EXEMPTION U/S.80P(2)(A)(I) OF THE ACT IS CONCERNED TO A CO-OP CREDIT SOCIETY WHICH IS ENGAGED IN PROVIDING CREDIT FACILITIES TO ITS ME MBERS. 7. THE APPELLANT CRAVES LEAVE TO ADD, ALTER, DELETE OR SUBSTITUTE ANY OF THE GROUNDS URGED ABOVE. 8. IN VIEW OF THE ABOVE AND OTHER GROUNDS THAT MAY BE URGED AT THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT PRAYS THAT THE APPEAL MAY BE ALLOWED IN THE INTEREST OF EQUITY AND JUSTIC E. 3. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT THE ONLY ISSUE INVOLVED IN THIS CASE IS REGARDING ALLOWABILITY OF DEDUCTION U/S. 80P(2)( A)(I) OF RS. 30,51,245/- IN RESPECT OF INTEREST INCOME FROM BANK. HE SUBMITTED THAT CIT(A) HAS FOLLOWED THE JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDER ED IN THE CASE OF PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY AS REPORTED IN395 ITR 611 (KARN). BUT THE ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE BY ANOTHER JUDGMENT OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CAS E OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO AS REPORTE D IN 230 TAXMAN 309. AT THIS JUNCTURE, THE BENCH POINTED OUT THAT THERE IS NO CONFLICT IN THESE TWO JUDGMENTS OF HON'BLE KARNATAKA HIGH COURT BUT THE U LTIMATE CONCLUSION IN THESE TWO JUDGMENTS IS DIFFERENT BECAUSE OF THE DIFFERENC E IN FACTS. THE BENCH POINTED OUT THAT IN CASE OF PCIT AND ANOTHER VS. TO TAGARS CO-OPERATIVE SALE SOCIETY(SUPRA), IT WAS FOUND THAT THE INVESTMENT IN BANK IS OUT OF LIABILITY OF THE ASSESSEE AND THEREFORE, THE ISSUE IS DECIDED AGAINS T THE ASSESSEE WHEREAS IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPER ATIVE LTD. VS. ITO(SUPRA), THE MONEY DEPOSITED IN BANK WAS NOT OUT OF LIABILITY BUT OUT OF ASSESSEES OWN FUND AND THEREFORE, THE DECISION IS IN FAVOUR OF THE ASSESSEE. THE BENCH WANTED TO KNOW AS TO WHETHER THERE IS ANY FINDING OF AUTHORITIES BELOW REGARDING THIS ASPECT. THE LD. AR OF ASSESSE E SUBMITTED THAT THESE FACTS ITA NO.936/BANG/2018 PAGE 3 OF 4 ARE NOT COMMENTED UPON BY ANY OF THE AUTHORITIES BE LOW AND THE SAME ARE NOT READILY AVAILABLE BEFORE THE TRIBUNAL ALSO AND HENC E, THE MATTER MAY BE RESTORED BACK TO THE FILE OF AO FOR FRESH DECISION AFTER EXAMINING THE RELEVANT FACTS. THE LD. DR OF REVENUE SUPPORTED THE ORDER O F CIT(A). 4. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND I FI ND THAT THE ISSUE INVOLVED IN THE PRESENT CASE IS ABOUT THE DEDUCTION U/S. 80P(2)(A)( I) IN RESPECT OF INCOME ON ACCOUNT OF INTEREST FROM BANK. THIS ASPECT SHOULD BE EXAMINED WHETHER THE RELEVANT INVESTMENT IN BANK WAS OUT OF LIABILITY OF THE ASSESSEE OR WAS OUT OF THE ASSESSEES OWN FUNDS. THESE FACTS ARE NOT READILY AVAILABLE AND THERE IS NO COMMENT OF ANY OF THE AUTHORITIES BELOW ON THIS ASP ECT. HENCE I FEEL IT PROPER TO RESTORE THE MATTER BACK TO THE FILE OF AO FOR FR ESH DECISION. ACCORDINGLY, I SET ASIDE THE ORDER OF CIT(A) AND RESTORE THE MATTER BA CK TO THE FILE OF AO FOR FRESH DECISION AFTER EXAMINING THE FACTS OF THE PRESENT C ASE IN THE LIGHT OF JUDGMENTS OF HON'BLE KARNATAKA HIGH COURT RENDERED IN THE CAS E OF PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY(SUPRA) AND TUMKU R MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO(SUPRA) AND IF IT IS FOUND THAT THE FACTS OF THE PRESENT CASE ARE IN LINE WITH THE FACTS IN THE CASE OF PCIT AND ANOTHER VS. TOTAGARS CO-OPERATIVE SALE SOCIETY(SUPRA) THEN THE ISSUE MAY BE DECIDED AGAINST THE ASSESSEE AND IF THE FACTS OF THE PRESEN T CASE ARE IN SAME LINE WITH THE FACTS IN THE CASE OF TUMKUR MERCHANTS SOUHARDA CREDIT COOPERATIVE LTD. VS. ITO(SUPRA) THEN THE ISSUE MAY BE DECIDED IN FAV OUR OF THE ASSESSEE. THE AO SHOULD PASS NECESSARY ORDER AS PER LAW AS PER AB OVE DISCUSSION AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD TO AS SESSEE. 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENT IONED ON THE CAPTION PAGE. SD/- (ARUN KUMAR GARODIA) ACCOUNTANT MEMBER BANGALORE, DATED, THE 20 TH APRIL, 2018. /MS/ ITA NO.936/BANG/2018 PAGE 4 OF 4 COPY TO: 1. APPELLANT 4. CIT(A) 2. RESPONDENT 5. DR, ITAT, BANGALORE 3. CIT 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.