ACIT Circle 3(1), Trichy V. The Tirhcirappalli District Co op Milk Producers Union Ltd., Trichy

ITA 983/CHNY/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4132 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 09-04-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: N GOPIKRISHNAJCITD R
• Section: 143(3); 80P

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: CHENNAI . . . , , % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./ ITA NO.983/CHNY/2019 & & /ASSESSMENT YEAR: 2014-15 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-3(1),RANGE-3, 44,WILLIAMS ROAD, CANTONMENT,TRICHY. VS. M/S.THE TIRUCHIRAPPALLI DISTRICT CO-OP MILK PRODUCERS UNION LTD., KOTTAPATTU,PUDUKKOTTAI ROAD, TRICHY 620 023. [ PAN: AAAAT 0654 Q ] ( ) /APPELLANT) ( *+) /RESPONDENT) ) , / APPELLANT BY : MR.N.GOPIKRISHNA,JCIT,D.R *+) , /RESPONDENT BY : NONE , /DATE OF HEARING : 25.06.2019 , /DATE OF PRONOUNCEMENT : 19.08.2019 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER : THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS), TRICHY DATED 14.01.2019 FOR ASSESSMENT YEAR 2014-15. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE RESPON DENT ASSESSEE IS A CO-OPERATIVE SOCIETY, ENGAGED IN THE BUSINESS OF PR ODUCING MILK AND MILK ITA NO.983/CHNY/2019 :- 2 -: PRODUCTS. THE E-RETURN OF INCOME FOR THE ASSESSMENT YEAR 2014-15 WAS FILED ON 14.10.2014 DISCLOSING TOTAL INCOME OF RS. 43,04, 440/- AFTER CLAIMING DEDUCTION OF RS.1,37,72,830/- U/S.80P(2)(D) OF THE ACT. AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPLETED BY INCOME TAX OFFICER, WARD-3(3), TRICHY VIDE ORDER DATED 27.12.2016 PASSE D U/S. 143(3) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) DECLARIN G TOTAL INCOME OF RS. 1,80,77,274/-. WHILE DOING SO, THE ASSESSING OFFIC ER HAD NOT ALLOWED THE BENEFIT OF DEDUCTION U/S.80P(2)(D) OF THE ACT IN RE SPECT OF INTEREST INCOME OF RS.1,36,89,966.97 EARNED FROM NATIONALIZED BANK, PL ACING RELIANCE ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF TO TAGARS CO-OPERATIVE SALE SOCIETY VS. ITO [2010] 322 ITR 28 3(SC). BEING AGGRIEVED BY THE ABOVE ORDER, ASSESSEE PREFERRED AN APPEAL BEFOR E THE LD.CIT(A), WHO VIDE IMPUGNED ORDER DELETED THE ADDITION MADE BY THE ASS ESSING OFFICER, PLACING RELIANCE ON THE DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF PRINCIPAL C.I.T., HUBLI VS. TOTAGARS CO-OPERATIVE S ALE SOCIETY, REPORTED IN [2017] 78 TAXMANN.COM 169(KARNATAKA) WHEREIN THE HO NBLE KARNATAKA HIGH COURT DISTINGUISHED THE DECISION OF THE HONBLE SUP REME COURT IN THE CASE OF TOTAGARS CO-OPERATIVE SALE SOCIETY VS. ITO, REPORTE D IN [2010] 322 ITR 283(SC) HELD THAT THE INTEREST INCOME EARNED ON THE DEPOSITS MADE OUT OF THE SURPLUS GENERATED OF THE CO-OPERATIVE SOCIETY IS EL IGIBLE FOR DEDUCTION U/S.80P(2)(D) OF THE ACT. SIMILARLY, THE LD.CIT(A) HAS ALSO RELIED ON THE DECISION OF HONBLE ANDHRA PRADESH AND TELENGANA HIGH COURT IN THE CASE OF VAVVERU ITA NO.983/CHNY/2019 :- 3 -: CO-OPERATIVE RURAL BANK LTD., VS. CHIEF C.I.T. REPO RTED IN [2017] 88 TAXMANN.COM 728 WHEREIN THE RATIO OF THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF TOTAGARS CO-OPERATIVE SAL E SOCIETY VS. ITO, REPORTED IN [2010] 322 ITR 283(SC) WAS FOLLOWED. BEING AGGR IEVED, THE REVENUE IS IN APPEAL BEFORE US IN THE PRESENT APPEAL CHALLENGING THE DECISION OF LD. CIT(A) TO DELETE THE ADDITION OF RS.1,37,72,830/- U/S.80P(2)( D) OF THE ACT. 3. THE LD.SENIOR D.R SUBMITTED THAT THE CO-OPERATI VE SOCIETY CANNOT BE TREATED AS THE CO-OPERATIVE BANK AND THEREFORE, THE INTEREST INCOME EARNED BY THE CO-OPERATIVE SOCIETY FROM THE CO-OPERATIVE BANK S CANNOT BE ALLOWED AS DEDUCTION IN THE CLAUSE (D) OF SUB-SECTION (2) OF S ECTION 80P OF THE ACT. 4. ON THE OTHER HAND, NONE APPEARED ON BEHALF OF T HE ASSESSEE AND ALSO NO WRITTEN SUBMISSION WAS FILED FROM RESPONDENT ASS ESSEE SIDE. 5. WE HAVE HEARD THE SUBMISSION OF LD.DR AND PERUS ED THE MATERIAL AVAILABLE ON RECORD. THE ONLY ISSUE INVOLVED IN THE PRESENT APPEAL IS WHETHER OR NOT THE RESPONDENT-ASSESSEE IS ENTITLED FOR DEDU CTION U/S.80P(2)(D) OF THE ACT IN RESPECT OF THE INTEREST EARNED FROM ANOTHER CO-OPERATIVE SOCIETY. ADMITTEDLY, THE RESPONDENT-ASSESSEE IS A CO-OPERATI VE SOCIETY AND EARNED INTEREST INCOME OF RS.1,36,89,966/- FROM NATIONALIZ ED BANKS AND A SUM OF RS.1,36,829/- FROM TIRUCHIRAPPALLI DISTRICT CO-OPE RATIVE BANK. ASSESSEE CLAIMED ENTIRE INTEREST INCOME AS EXEMPTION FROM TA X UNDER THE PROVISIONS OF SECTION 80P(2)(D) OF THE ACT. THE NATIONALIZED BAN KS CANNOT BE TREATED AS A CO-OPERATIVE SOCIETY AND THEREFORE, THE INTEREST IN COME EARNED ON THE FIXED ITA NO.983/CHNY/2019 :- 4 -: DEPOSIT WITH THE NATIONALIZED BANKS CANNOT BE EXEMP T UNDER THE PROVISIONS OF SECTION 80P(2)(D) OF THE ACT. HOWEVER, IN RESPECT OF INTEREST INCOME EARNED ON THE FIXED DEPOSIT MADE WITH TIRUCHIRAPPALLI DIST RICT CO-OPERATIVE BANK IS ALSO NECESSARILY A CO-OPERATIVE SOCIETY ON THE RATI O OF THE DECISION OF THE HONBLE KARNATAKA HIGH COURT CITED SUPRA AND ALSO T HE DECISION OF THE HONBLE TELANGANA AND ANDHRA PRADESH HIGH COURT CITED SUPRA IS SQUARELY APPLICABLE. THUS, THE FINDINGS OF THE LD.CIT(A) ARE REVERSED IN RESPECT OF INTEREST INCOME EARNED FROM THE NATIONALIZED BANKS AND THE FINDINGS OF THE LD.CIT(A) IN RESPECT OF THE INTEREST INCOME EARNED FROM TIRUCHIR APPALLI DISTRICT CO-OPERATIVE BANK IS HEREBY CONFIRMED. ACCORDINGLY, THE APPEAL O F REVENUE IS PARTLY ALLOWED. 5. IN THE RESULT, THE APPEAL OF REVENUE IS PARTLY ALLOWED. ORDER PRONOUNCED ON THE 19 TH AUGUST, 2019 IN CHENNAI. SD/- SD/- ( . . . ) (N.R.S. GANESAN) /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER /CHENNAI, 2 /DATED: 19 TH AUGUST, 2019. K S SUNDARAM , *34 54 /COPY TO: 1. ) /APPELLANT 4. 6 /CIT 2. *+) /RESPONDENT 5. 4 * /DR 3. 6 ( ) /CIT(A) 6. & /GF ITA NO.983/CHNY/2019 :- 5 -: