ITO, Muzaffarnagar V. M/s. Kisan Sewa Sahakarti Samiti Ltd. Morna, Muzaffarnagar

ITA 987/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5228 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 24-05-2017
• Assessment Year: 2013-2014
• Appeal Filed On: 21-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES SMC: NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA.NO.987/DEL./2017 ASSESSMENT YEAR 2013-2014 THE INCOME TAX OFFICER G.T. ROAD KHATAULI, MUZAFFARNAGAR. VS. M/S. KISAN SEWA SAHAKARI SAMITI LTD., V & PO MOMA. DIST. MUZAFFARNAGAR. PAN AAAAK4638D (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI T. VASANTHAN, SR. D.R. FOR ASSESSEE : SHRI ANIL JAIN, ADVOCATE DATE OF HEARING : 09.08.2017 DATE OF PRONOUNCEMENT : 16.08.2017 ORDER THIS APPEAL BY REVENUE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(A), MUZAFFARNAGAR, DATED 20.12.2016 FOR A.Y. 2013- 2014, ON THE FOLLOWING GROUNDS : 1. TH E CIT(A ) HAS ER R ED IN LAW AND ON FACTS BY HOLD I NG THE ASSESSEE EL I G I BLE FOR DEDUCTION U/S. 80P OF INCOME TAX ACT , 1961 IGNORING THE FACTS MENTIONED I N THE ASSESSMENT ORDER . 2. THE CIT(A) HAS ERRED IN LAW AND ON FACTS BY DELETING THE ADDIT ION OF RS.36 , 66 , 535/- MADE BY THE A . O . BY IGNORING THE FACTS THAT THE ASSESSEE DID NOT COMPLY ANY OF THE NOTICES I SSUED BY THE A . O . AND HENCE FAILED TO SUBSTANTIATE ITS CLAIM . 3. THE CIT(A) HAS ERRED IN LAW AND ON FACTS AS HE ALLOWED THE CLA I M OF THE ASSESSEE BY HOLDING THAT THE AMOUNT SHOWN AS DEPOSITS FROM N ON MEMBERS WAS THE AMO U NT OF SECUR I TY TAKEN FROM STAFF MEMBERS WHILE THE AMOUNT UNDER THIS HEAD WAS ONLY RS.29,068.15/- IN THE BALANCE SHEET OF THE ASSESSEE . 2. THE FACTS OF THE CASE ARE THAT ASSESSEE IS A COOPER ATIVE SOCIETY CLAIMED DEDUCTION UNDER SECTION 80P OF THE AC T. IT HAS BEEN MENTIONED BY THE A.O. IN THE ASSESSMENT ORDER THAT ASSESS EE HAS 2 ITA.NO.987/DEL./2017 M/S. KISAN SEWA SAHAKARI SAMIT I LTD., V & PO MORNA, DIST. MUZAFFARNAGAR. ACCEPTED DEPOSITS FROM NON-MEMBERS FOR RS.29,068 AS SHOWN IN THE BALANCE SHEET. ON THIS BASIS, THE A.O. HAD DISALLOWED THE DEDUCTION UNDER SECTION 80P OF THE ACT AS THE ASSESSEE WAS FOUND DOING BUSINESS WITH NON-MEMBERS. DURING THE APPELLATE PROC EEDINGS, IT HAS BEEN EXPLAINED BY THE ASSESSEE THAT ASSESSEE HAD TAKEN SECURITY DEPOSITS OF RS.29,068 FROM THE STAFF MEMBERS AND PROVI DING LIST OF THE SAME. FURTHER, THE A.O. HAS ALSO MADE ADDITION OF RS.6 ,10,000 ON ACCOUNT OF TRANSFER TO RESERVE, DEBITED TO P & L A/C. I T WAS EXPLAINED BY ASSESSEE THAT IT HAS TRANSFERRED THE AMOUNT OF RS.6,10 ,000 BY DEBITING P & L AMOUNT WHICH IS DULY REFLECTED IN THE B ALANCE SHEET. THE ASSESSEE ALSO SUBMITTED BEFORE LD. CIT(A) THAT IN A .Y. 2012-2013 THE LD. CIT(A) VIDE ORDER DATED 18 TH JULY, 2016 HAS ALLOWED THE DEDUCTION UNDER SECTION 80P IN THE ASSESSEES CASE WH EREIN THE DEPOSIT FROM NON-MEMBERS WERE AT RS.24,068, DETAILS O F THE SAME HAVE BEEN ATTACHED WITH THE BALANCE SHEET FOR A.Y. 2012 -2013. THE LD. CIT(A) ON PERUSAL OF THE DETAILS FILED DURING TH E APPELLATE PROCEEDINGS NOTED THAT AN AMOUNT OF RS.29,068 IS ON AC COUNT OF SECURITY TAKEN FROM THE STAFF MEMBERS, DIVIDEND PAYMEN T TO THE STATE GOVERNMENT, LIST OF SAME REPRODUCED AT PAGE-10 OF THE I MPUGNED ORDER. THE LD. CIT(A) ACCORDINGLY ALLOWED THE CLAIM OF ASSESSEE UNDER SECTION 80P OF THE ACT AND DELETED THE ADDITIONS. HIS FI NDINGS AT PAGE- 11 OF THE APPELLATE ORDER IS REPRODUCED AS UNDER : FROM THE ABOVE FACTS IT IS NOTED THAT THE APPELLANT HAS NOT DONE ANY BUSINESS WITH NON MEMBERS AS NOTED B Y THE A.O. THEREFORE, THE A.O. WAS NOT JUSTIFIED IN M A KING DISALLOWANCE OF DE D U CTION U/S 80P OF THE ACT IN THIS CASE ON THIS BASIS. FURT HER THE APPELLANT HAS TRANSFERRED THE AMOUNT OF RS.6,10,000/- FROM P & L A/C TO ITS BALANCE SHEET FOR DIFFERENT RESERVE/FUNDS MAINTAINE D . IT IS IN THE NATURE OF APPROPRIATION O F PR OFITS. ONCE THE APPELL A N T HAS BEEN 3 ITA.NO.987/DEL./2017 M/S. KISAN SEWA SAHAKARI SAMIT I LTD., V & PO MORNA, DIST. MUZAFFARNAGAR. FOUND ELIGIBLE FOR DEDUCTION ' U/S 80P OF THE ACT, IT IS IMMATERIAL HOW THE PROFITS HAVE BEEN APPROPRIATED OR NET PROFI T IS RS.30,60,181/- OR RS.36,66,535/- COMPUTED BY THE A. O. AS IN BOTH THE SITUATIONS PROFITS OF THE SOCIETY ARE ELIG IBLE FOR DEDUCTION U/S 80P OF THE ACT . KEEPING IN VIEW THE OVERALL FACTS AND DISCUSSION AS ABOVE IT IS HELD THAT THE A.O. WAS NO T JUSTIFIED IN DISALLOWING DEDUCTION U/S 80P OF THE ACT AND MAKING ASSESSMENT IN THIS CASE AT RS . 36,66,535/-. THE SAME IS HEREBY DELETED. GROUND OF APPEAL NOS. 1 TO 3 ARE ALLOWED. 3. THE LD. D.R. RELIED UPON THE ORDERS OF THE A.O. A ND SUBMITTED THAT DESPITE ISSUING SHOW CAUSE NOTICE BY A.O, ASSESSEE DID NOT COMPLY WITH THE SHOW CAUSE NOTICE. THEREFORE, ADDI TION SHOULD NOT BE DELETED. ON EARLIER DATE OF HEARING, THE LD. D.R. WAS DIRECTED TO VERIFY WHETHER DEPARTMENT HAS FILED ANY APPEAL AGAINS T THE ORDER OF THE LD. CIT(A) FOR PRECEDING A.Y. 2012-2013 ON THE SA ME ISSUE BEFORE THE TRIBUNAL. THE LD. D.R. SUBMITTED THAT DUE TO LESSER TA X EFFECT, THE DEPARTMENT DID NOT FILE ANY APPEAL BEFORE THE TRIBUNAL AGAINST THE ORDER OF THE LD. CIT(A) FOR PRECEDING A.Y. 2012-2013 . 4. ON THE OTHER HAND, LEARNED COUNSEL FOR THE ASSESSE E SUBMITTED THAT REQUIRED DETAILS HAVE BEEN NOTED IN THE BO OKS OF ACCOUNT AND THE BALANCE SHEET WHICH HAVE BEEN PRODUCED BEFORE A.O. AT ASSESSMENT STAGE WHICH HAVE BEEN TEST-CHECKED. THER EFORE, NO FRESH DETAILS HAVE BEEN FILED BEFORE LD. CIT(A) AND AS SUC H DEPARTMENTAL APPEAL MAY BE DISMISSED. 5. I HAVE CONSIDERED THE RIVAL CONTENTIONS AND DO NO T FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LD. CIT( A). IT IS AN ADMITTED FACT THAT IN PRECEDING A.Y. 2012-2013 THE LD. CI T(A) ON THE SAME ISSUE ALLOWED THE DEDUCTION UNDER SECTION 80P OF THE I.T. ACT TO THE ASSESSEE AND NO DEPARTMENTAL APPEAL HAVE BEEN FILE D BEFORE 4 ITA.NO.987/DEL./2017 M/S. KISAN SEWA SAHAKARI SAMIT I LTD., V & PO MORNA, DIST. MUZAFFARNAGAR. TRIBUNAL. THOUGH THE ASSESSEE DID NOT FILE SPECIFIC REPLY BEFORE A.O. TO THE SHOW CAUSE NOTICE ISSUED IN THIS REGARD BUT THE ASSE SSEE PRODUCED THE DOCUMENTS, BOOKS OF ACCOUNT AND OTHER DETAILS WHICH HAVE BEEN EXAMINED BY A.O. AT ASSESSMENT STAGE. THE A.O. COULD H AVE VERIFY THE FACT FROM THE BOOKS OF ACCOUNT THAT ASSESSEE HAS NOT DEAL T WITH ANY NON-MEMBERS. THE ASSESSEE SUBMITTED THESE SIMILAR DETA ILS AS PER BOOKS OF ACCOUNT AND BALANCE SHEET BEFORE LD. CIT(A) WHICH CLEARLY PROVE THAT ASSESSEE HAS TAKEN SECURITY DEPOSITS FROM THE STAFF MEMBERS AND DIVIDEND WAS PAYABLE TO THE STATE GOVERNME NT. IT THEREFORE, PROVE THAT ASSESSEE HAS NOT DONE ANY BUSINES S WITH NON MEMBERS. THEREFORE, DEDUCTION UNDER SECTION 80P SHOUL D NOT BE DISALLOWED TO THE ASSESSEE. THE FINDING OF FACT RECORD ED BY THE LD. CIT(A) HAVE NOT BEEN REBUTTED THROUGH ANY EVIDENCE OR MATERIAL ON RECORD. THEREFORE, NO INFIRMITY HAVE BEEN POINTED OU T IN THE ORDER OF THE LD. CIT(A). FURTHER, THE DEPARTMENT DID NOT RAISE ANY SPECIFIC GROUND OF VIOLATION OF RULE 46A OF THE I.T. RULES IN THE GROUNDS OF APPEALS. THEREFORE, I DO NOT FIND ANY JUSTIFICATION TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) IN GRANTING DEDUCTION UNDER SECTION 80P OF THE I.T. ACT TO THE ASSESSEE FOR DELETING THE ADDITIONS ON ME RIT. THE DEPARTMENT APPEAL FAILS AND IS DISMISSED. 6. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISMISSED . ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DELHI, DATED 16 TH AUGUST, 2017 VBP/- 5 ITA.NO.987/DEL./2017 M/S. KISAN SEWA SAHAKARI SAMIT I LTD., V & PO MORNA, DIST. MUZAFFARNAGAR. COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT SMC BENCH 6. GUARD FILE // ASST. REGISTRAR // ITAT : DELHI BENCHES : DELHI.