ITO, Ward 1(1), Nashik V. Dhanlaxmi Graimn Gibarshet Sahakari Patsanstha Maryadit, Nashik

ITA 949/PUN/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80014 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 23-07-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 02-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS S PRAVEENA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.949/PN/2013 (ASSESSMENT YEAR : 2009-10) INCOME TAX OFFICER, WARD 1 (1), NASHIK. . APPELLANT VS. DHANLAXMI GRAMIN BIGARSHETI SAHAKARI PATSANSTHA MARYADIT, SAHAKAR BHAVAN, NAYGAON, TAL. SINNAR, DIST. NASHIK. PAN : AAAAD1314P . RESPONDENT DEPARTMENT BY : MRS. S. PRAVEENA ASSESSEE BY : MR. ABHAY AVCHAT DATE OF HEARING : 23-07-2014 DATE OF PRONOUNCEMENT : 23-07-2014 ORDER PER G. S. PANNU, AM THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGA INST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-I, NASHIK DATED 11.02.2013 WHICH, IN TURN, HAS ARISEN FROM AN ORDER DATED 29.12.2011 PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2009-10. 2. IN THIS APPEAL, THE REVENUE HAS RAISED THE FOLLO WING GROUNDS OF APPEAL :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A)-I, NASHIK IS NOT JUSTIFIED IN HOLDIN G THAT ASSESSEE IS ENTITLED TO DEDUCTION U/S. 80P(2)(A)(I) OF THE IT ACT, WHEN THE INCOME OF THE SOCIETY ON ACCOUNT OF INTEREST FROM BANKS OTHER THAN CO-OPE RATIVE BANKS ARE NOT COVERED BY THE ACTIVITY OF PROVIDING CREDIT FACILIT IES TO ITS MEMBERS AND HENCE, NOT ELIGIBLE FOR DEDUCTION U/S. 80P(2)(A)(I) OF THE IT ACT. 2. THE LEARNED CIT (A) HAS ALSO DISREGARDED THE FAC T THAT THE CO-OPERATIVE SOCIETY IS REQUIRED TO SATISFY THE CRI TERIA FOR AVAILING BENEFIT OF SEC. 80P(2)(D) I.E. THE INTEREST INCOME SHOULD BE F ROM OTHER CO-OPERATIVE SOCIETY, WHEREAS IN THE ASSESSEE SOCIETY'S CASE THE INTEREST INCOME IS FROM OTHER THAN CO-OPERATIVE BANKS WITH REGARD TO INVEST MENT MADE. ITA NO.949/PN/2013 A.Y. : 2009-10 3. IT IS THEREFORE PRAYED THAT THE ORDER OF THE LEA RNED CIT(A) BE VACATED AND THAT OF THE ASSESSING OFFICER WARD 1(1) , NASHIK BE RESTORED. 4. THE APPELLANT CRAVES LEAVE TO ADD, AMEND AND ALT ER ANY GROUND(S) OF APPEAL. 3. IN BRIEF, THE RELEVANT FACTS ARE THAT ASSESSEE I S A CO-OPERATIVE SOCIETY ENGAGED IN THE BUSINESS OF PROVIDES CREDIT FACILITI ES TO ITS MEMBERS. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, IT FILED A RET URN OF INCOME DECLARING TOTAL INCOME OF RS. NIL WHICH, INTER-ALIA, CONTAINED A CLAIM OF EXEMPTION U/S 80P OF THE ACT IN RELATION TO ITS ENTIRE INCOME. THE ASSE SSING OFFICER, HOWEVER, FOUND THAT ASSESSEE HAD EARNED INTEREST ON DEPOSITS KEPT WITH STATE BANK OF INDIA AMOUNTING TO RS.20,39,476/- WHICH WAS NOT ELIGIBLE FOR DEDUCTION U/S 80P(2)(A)(I) OF THE ACT. ACCORDING TO THE ASSESSIN G OFFICER, THE SAID INCOME COULD NOT CONSTITUTE OPERATIONAL INCOME OF THE ASSE SSEE INASMUCH AS THE SAME COULD NOT BE SAID TO HAVE BEEN DERIVED FROM TH E ACTIVITY OF PROVIDING CREDIT FACILITIES TO ITS MEMBERS. THUS, EXEMPTION CLAIMED U/S 80P(2)(A)(I) OF THE ACT WITH RESPECT TO THE IMPUGNED INCOME WAS DEN IED. THE CIT(A) HAS SINCE ALLOWED THE CLAIM OF THE ASSESSEE, AGAINST WH ICH REVENUE IS IN APPEAL BEFORE US. 4. AT THE TIME OF HEARING, IT WAS A COMMON POINT BE TWEEN THE PARTIES THAT A SIMILAR CONTROVERSY HAS BEEN CONSIDERED BY THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ITO VS. NIPHAD NAGARI SAHAKARI PATSANST HA LTD. VIDE ITA NO.1336/PN/2011 DATED 31.07.2013. 5. THE RELEVANT PORTION OF DECISION OF OUR CO-ORDIN ATE BENCH IN THE CASE OF NIPHAD NAGARI SAHAKARI PATSANSTHA LTD. (SUPRA) WHIC H HAS DEALT WITH A SIMILAR ISSUE, READS AS UNDER :- 11.3 IN THE INSTANT CASE THERE IS NO DISPUTE TO TH E FACT THAT THE SOCIETY IS A CREDIT COOPERATIVE SOCIETY AUTHORISED BY THE REGISTRAR OF COOPERATIVE SOCIETIES FOR ACCEPTING DEPOSITS AND LE NDING MONEY TO ITS MEMBERS AS PER LICENSE GRANTED BY THE REGISTRAR OF COOPERATIVE SOCIETIES AND THE MAIN OBJECT OF THE SOCIETY IS TO PROVIDE CR EDIT FACILITY TO MEMBERS ITA NO.949/PN/2013 A.Y. : 2009-10 WHO CAN BE ANY PERSON OF THE SOCIETY. WE FIND THE P UNE BENCH OF THE TRIBUNAL IN THE CASE OF MAHAVIR NAGARI SAHAKARI PAT SANSTHA LTD. REPORTED IN 74 TTJ 793 (PUNE) HAS HELD THAT THE CREDIT SOCIE TY WHICH IS CARRYING ON THE BUSINESS OF BANKING ACTIVITY AND PROVIDING CRED IT FACILITY TO ITS MEMBERS IS ELIGIBLE FOR DEDUCTION U/S.80P(2)(A)(I). IN VIEW OF THE ABOVE DISCUSSION AND FOLLOWING THE DECISIONS OF THE AHMEDABAD BENCH OF THE TRIBUNAL AND COCHIN BENCH OF THE TRIBUNAL WHICH IN TURN HAVE CON SIDERED THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF TOTAGAR'S COOPERATIVE SALE SOCIETY LTD. (SUPRA) WE FIND NO INFIRMITY IN THE OR DER OF THE LD.CIT(A). 6. IN THE ABSENCE OF ANY DECISION TO THE CONTRARY A ND TO MAINTAINING CONSISTENCY, WE HEREBY AFFIRM THE ORDER OF THE CIT( A) WHICH IS IN CONFORMITY WITH THE DECISION OF THE TRIBUNAL IN THE CASE OF NI PHAD NAGARI SAHAKARI PATSANSTHA LTD. (SUPRA). THUS, ON THIS ASPECT, REV ENUE FAILS. 7. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ABOVE DECISION WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF THE HEARING O N 23 RD JULY, 2014. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED: 23 RD JULY, 2014. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-I, NASHIK; 4) THE CIT-I, NASHIK; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY I.T.A.T., PUNE