Charotar Nagrik Sahkari Bank Ltd., Anand V. The ACIT, Anand Circle, Anand

MA 114/AHD/2010

• Counselvise Citation: [2012] 123 COUNSELVISE.COM (IT) 7452 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 1 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-01-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 24-12-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 12-05-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: M G PATEL
• Keywords: Capital asset; Gift; Business income

Judgement Text

, , , , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD , . ! !,'# ' $ BEFORE SHRI MUKUL KR.SHRAWAT, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER MA NO.114/AHD/2010 ( IN TA NO.371/AHD/2006) [ ! % ! % ! % ! % / / / / ASSESSMENT YEAR : 2002-03] CHAROTAR NAGRIK SAHAKARI BANK LTD. CHIMAN SATHI BHAVAN SUBHASH ROAD ANAND ! ! ! ! / VS. THE ASST.INCOME TAX OFFICER ANAND CIRCLE AANAND ' '# ./() ./ PAN/GIR NO. : AABFC 3231 A ( APPLICANT ) .. ( RESPONDENT ) APPLICANT BY : SHRI M.G. PATEL, A.R. RESPONDENT BY : SHRI SAMIR TEKRIWAL, D.R. !* + ,#/ // / DATE OF HEARING : 13/01/2012 - % + ,# / DATE OF PRONOUNCEMENT : 13/01/2012 './ O R D E R PER SHRI MUKUL KR. SHRAWAT, JUDICIAL MEMBER : THIS MISCELLANEOUS PETITION HAS BEEN FILED ON 12.5. 2010 ARISING FROM THE ORDER OF THE TRIBUNAL DATED 27/7/2006 TIT LED AS ABOVE. 2. VIDE THIS MISCELLANEOUS PETITION, LD.AR MR.M.G. PATEL HAS EMPHASIZED THAT HIS MAIN PLANK OF ARGUMENT IS THAT GROUND NO.3 AS RAISED BEFORE THE TRIBUNAL WAS NOT CORRECTLY APPRECIATED A ND DECIDED BY THE MA NO.114/AHD/2010 ( IN ITA NO. 371/AHD /2006) CHAROTAR NAGRIK SAHAKARI BANK LTD. VS. ACIT ASST.YEAR 2002-03 - 2 - TRIBUNAL. RELEVANT PORTIONS ARGUED BEFORE US AS ARISING FROM THE SAID MISCELLANEOUS PETITION ARE REPRODUCED BELOW:- 1. THE APPELLANT FILED APPEAL BEFORE THE HON'BLE ITAT, B BENCH, AHMEDABAD AGAINST OF LD. CIT(A)-IV, BARODA IN APPEAL NO.CAB/IV-A-5/05-06 ON THE FOLLOWING AMONG O THER GROUNDS: GROUND NO.3 LD. CIT(A) HAS ERRED IN TREATING THE INVESTMENT IN GOVERNMENT.SECURITIES AS CAPITAL ASSETS AND NOT ALL OWEING DEDUCTION OF INCOME EARNED ON SALE OF IT US/80P(2)( A)(I) OF THE INCOME TAX ACT, 1961. 2. APPEAL WAS HEARD BY THE HON'BLE MEMBERS OF ITAT B BENCH, AHMEDABAD AND A COMMON ORDER WAS PASSED IN RESPECT OF ITA NO.370 & 371/AHD/2006 FOR A.YS. 2000-01 AND 2002-03 (BEING THE APPEAL UNDER CONSIDERATION) AS UNDER (CO PY OF ITAT ORDER IS ENCLOSED AS ANNEXURE-A): 6. THE HON.SUPREME COURT IN THE CASE OF CIT VS. RAMANATHAPURA DISTRICT CO.OP. CENTRAL BANK LTD. (SU PRA) HAS HELD AS UNDER: HELD, THAT (I) INTEREST ON SECURITIES, (II) SUBSID IES FROM THE GOVERNMENT, AND (III) DIVIDEND RECEIVED BY THE ASSE SSEE, A CO-OPERATIVE SOCIETY CARRYING ON BANKING BUSINESS, WERE BUSINESS INCOME OF THE ASSESSEE, AND THE ASSESSEE W AS ENTITLED TO DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE INCOME TAX ACT, 1961, IN RESPECT THEREOF RESPECTFULLY FOLLOWING THE ABOVE MENTIONED DECISION OF SPECIAL BENCH, THE DECISION OF HON.JURISDICTIONAL HIGH COU RT IN THE CASE OF CIT VS. BARODA PEOPLES CO-OP.BANK LTD. (SUP RA) AND THE DECISION OF HON.SUPREME COURT IN THE ABOVE CASE , WE HOLD THAT LD. CIT(A) WAS WRONG IN NOT GRANTING THE RELIE F TO THE ASSESSEE AND, THEREFORE, WE REVERSE THE ORDER OF CI T(A) AND ALLOW BOTH THE APPEALS OF THE ASSESSEE. MA NO.114/AHD/2010 ( IN ITA NO. 371/AHD /2006) CHAROTAR NAGRIK SAHAKARI BANK LTD. VS. ACIT ASST.YEAR 2002-03 - 3 - 3.IT SEEMS THAT IN DECIDING THE ABOVE APPEAL, HON BLE MEMBERS OF B BENCH OF ITAT HAVE NOT CONSIDERED IN THE ORDER THE GROUNDS STATED IN PARA-1 ABOVE, WHICH WERE SPECIFIC AND WER E DIFFERENT FROM THE GROUNDS OF A.Y. 2000-01 WHICH ARE AS FOLLO W:- 1. LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS G RAVELY ERRED IN NOT TREATING THE INCOME EARNED ON INVESTME NT WITH SARDAR SAROVAR NARMADA NIGAM LTD. AS NOT PERMITTED AND TREATED AS NOT COVERED FOR DEDUCTION U/S.80P(2)(A)( I) OF THE ACT. 2. LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS GR AVELY ERRED IN NOT TREATING THE INCOME EARNED ON INVESTME NT WITH NATIONALISED BANK AS NOT BANKING BUSINESS AND TREAT ED AS NOT COVERED FOR DEDUCTION U/S.80P(2)(A)(I) OF THE ACT. 3. LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS GR AVELY ERRED IN NOT TREATING THE INCOME EARNED ON MONEY AT CALL AND SHORT NOTICE FROM DFHI AND PNB GIFTS AS NOT BANKING BUSINESS AND TREATED AS NOT COVERED FOR DEDUCTION U/S.80P(2)(A)(I) OF THE ACT. 4. LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS GR AVELY ERRED IN NOT FOLLOWING THE PRINCIPLE LAID DOWN IN C ASE OF SURAT DIST. CO.OP. BANK LTD. VS. THE ITO WARD-2(6) SURAT WHERE ENTIRE INCOME OF A CO-OPERATIVE BANK IS AVAILABLE A S DEDUCTION U/S.80P(2)(A)(I) OF THE ACT. ENTIRE INCOME BE FULLY ALLOWED AS DEDUCTION AVAILAB LE AND TOTAL INCOME BE REDUCED TO RS.NIL. 4. IN VIEW OF THE ABOVE ORDER PASSED, IT APPEARS T HAT THE HONBLE ITAT B BENCH HAS NOT DEALT WITH OR DECIDED SPECIF ICALLY THE GROUNDS STATED ABOVE PARAGRAPH NO.1 FOR A.Y. 2002-0 3 IN THE ORDER. MA NO.114/AHD/2010 ( IN ITA NO. 371/AHD /2006) CHAROTAR NAGRIK SAHAKARI BANK LTD. VS. ACIT ASST.YEAR 2002-03 - 4 - 2.1. LD.AR HAS ALSO PLEADED THAT WHILE GIVING THE EFFECT OF THE ORDER OF THE TRIBUNAL, THE CONCERNED REVENUE OFFICER HAS NOT GRANTED THE REQUISITE RELIEF IN RESPECT OF CAPITAL GAIN AND INCOME FROM O THER SOURCES. THE REVENUE OFFICER HAS FOLLOWED HONBLE SUPREME COURT DECISION, I.E. CIT VS. RAMANATHAPURAM DISTRICT CO-OPERATIVE CENTRAL B ANK LTD. 255 ITR 423(SC) AS DIRECTED BY THE TRIBUNAL BUT DUE TO THE SPECIFIC DIRECTION OF GRANTING EXEMPTION OR REDUCTION FROM THE TOTAL INCO ME OF CAPITAL GAIN AND OTHER SOURCES AGAIN AN ASSESSMENT WAS MADE ON INCOM E OF RS.2,04,72,502/-, THOUGH THE CO-OPERATIVE BANK HAP PENED TO BE TOTALLY EXEMPT FROM TAX. 3. FROM THE SIDE OF THE REVENUE LD.DR MR.SAMIR TEKR IWAL APPEARED AND PLACED RELIANCE ON THE ORDER OF THE TRIBUNAL A ND ARGUED THAT THE APPEAL OF THE ASSESSEE WAS ALLOWED IN THE LIGHT OF FEW DECISIONS CITED AT THAT TIME BY THE LD.AR MR.PATEL. HE HAS DRAWN OUR ATTENTION ON PARAGRAPH NOS.3, 5 & 6 OF THE ORDER OF THE TRIBUNAL , REPRODUCED BELOW FOR READY REFERENCE:- 3. AT THE OUTSET THE LD. AR OF THE ASSESSEE POINT ED OUT THAT THIS ISSUE IS NOW COVERED BY THE DECISION OF HON. SUPREM E COURT IN THE CASE OF CIT VS. RAMANATHAPURA DISTRICT CO-OP. CENTR AL BANK LTD. 255 ITR 423 (SC) [COPY OF WHICH HAS BEEN PLACED ON RECORD] AND ALSO BY THE DECISION OF THE TRIBUNAL IN THE CASE OF SURAT DISTRICT CO-OP.BANK LTD. VS. ITO 85 ITD 1 (SB). MA NO.114/AHD/2010 ( IN ITA NO. 371/AHD /2006) CHAROTAR NAGRIK SAHAKARI BANK LTD. VS. ACIT ASST.YEAR 2002-03 - 5 - 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS IN THE LIGHT OF MATERIAL PLACED BEFORE US. WE FIND FORCE IN THE CONTENTION OF LD. AR THAT THE ISSUE IS SQUARELY COVERED BY THE DECISI ON OF SPECIAL BENCH IN THE CASE OF SURAT DISTRICT CO-OP.BANK LTD. VS. ITO 85 ITD 1 (SB). VIDE AFOREMENTIONED DECISION OF SB IT HAS BEE HELD AS UNDER: 57. I VIEW OF THE AFORESAID DISCUSSIONS, WE ARE O F THE CONSIDERED OPINION THAT THE ENTIRE INCOME IN QUESTI ON VIZ., INTEREST INCOME ON INVESTMENTS IN GOVERNMENT SECURI TIES, FIXED DEPOSITS, KVPS AND IVPS, INVESTMENTS WITH UTI ETC., OUT OF SURPLUS/IDLE MONEY AVAILABLE FROM WORKING CA PITAL INCLUDING VOLUNTARY RESERVES, EXCESS COLLECTION OF INTEREST TAX AND LOCKER RENT ARE ALL INCOME ATTRIBUTABLE TO BUSINESS OF BANKING AND ARE ELIGIBLE FOR GRANT OF DEDUCTION UND ER SECTION 80P(2)(A)(I) OF THE ACT. 6. THE HON.SUPREME COURT IN THE CASE OF CIT VS. RAMANATHAPURAM DISTRICT CO-OP.CENTRAL BANK LTD. (SU PRA) HAS HELD AS UNDER:- HELD, THAT (I) INTEREST ON SECURITIES, (II) SUBSID IES FROM THE GOVERNMENT, AND (III) DIVIDEND RECEIVED BY THE ASSE SSEE, A CO-OPERATIVE SOCIETY CARRYING ON BANKING BUSINESS, WERE BUSINESS INCOME OF THE ASSESSEE, AND THE ASSESSEE W AS ENTITLED TO DEDUCTION UNDER SECTION 80P(2)(A)(I) OF THE INCOME-TAX ACT, 1961, IN RESPECT THEREOF. RESPECTFULLY FOLLOWING THE ABOVE MENTIONED DECISION OF SPECIAL BENCH, THE DECISION OF HON.JURISDICTIONAL HIGH COUR T IN THE CASE OF CIT VS. BARODA PEOPLES CO-OP. BANK LTD. (SUPRA) AND THE DECISION OF HON.SUPREME COURT IN THE ABOVE CASE, WE HOLD THAT LD. CIT(A) WAS WRONG IN NOT GRATING THE RELIEF TO THE A SSESSEE AND, THEREFORE, WE REVERSE THE ORDER OF CIT(A) AND ALLOW BOTH THE APPEALS OF THE ASSESSEE. MA NO.114/AHD/2010 ( IN ITA NO. 371/AHD /2006) CHAROTAR NAGRIK SAHAKARI BANK LTD. VS. ACIT ASST.YEAR 2002-03 - 6 - 4. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES, WE ARE OF THE CONSCIENTIOUS VIEW THAT NO MISTAKE AT ALL WAS COMMI TTED BY THE TRIBUNAL AS INDICATED BY THE APPLICANT. THE TRIBUNAL HAS R EFERRED A DECISION OF SURAT DISTRICT CO-OPERATIVE BANK LTD. & ORS. VS. IT O & ORS. 85 ITD 1 (SB) AND ALSO NOTED THAT THE SAID DECISION WAS APPR OVED BY THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. BA RODA PEOPLES CO- OPERATIVE BANK LTD. 280 ITR 282 (GUJ.). PARAGRAPH NO.3 OF THE IMPUGNED ORDER OF THE TRIBUNAL CLEARLY REFERRED THA T LD.AR MR.M.G.PATEL HAD STATED THAT THE ISSUE WAS COVERED BY CIT VS. RA MANATHAPURAM DISTRICT CO-OPERATIVE CENTRAL BANK LTD. 255 ITR 42 3 (SC). NOW THE CONTENTION IS THAT THE REFERRED DECISION OF THE HON BLE SUPREME COURT PRESCRIBES RELIEF ALSO IN RESPECT OF CAPITAL GAIN A ND THAT WAS NOT DULY CONSIDERED BY THE AO. IN OUR CONSIDERED OPINION, I N A SITUATION WHEN A REVENUE OFFICER EITHER DO NOT FOLLOW AN ORDER OF TH E SUPREME COURT OR DO NOT CORRECTLY APPLY THE RATIO LAID DOWN THEREIN OR IF DO NOT FOLLOW THE LAW LAID DOWN THEREIN, THEN HE IS THE ONE WHO HAS C OMMITTED THE MISTAKE. AS FAR AS THE TRIBUNAL IS CONCERNED, THE APPEAL OF THE ASSESSEE WAS ALLOWED FOLLOWING THE CITED DECISIONS AND ONCE AN A PPEAL HAS BEEN ALLOWED, THEN CONSEQUENTIAL EFFECT OUGHT TO HAVE BE EN GIVEN BY THE AO. DUE TO THIS REASON, THERE SHOULD NOT BE ANY GRIEVAN CE AGAINST THE ORDER OF THE TRIBUNAL BUT IT SHOULD BE, IF AT ALL, AGAINST T HE ORDER OF THE AO WHILE GIVING EFFECT TO THE ORDER OF THE TRIBUNAL. THAT I S WHY ON ENQUIRY, LD.AR MR.PATEL HAS MADE A STATEMENT AT THE BAR THAT AGAIN ST THE ORDER GIVING EFFECT TO THE ITATS ORDER, A REMEDIAL ACTION HAS A LREADY BEEN TAKEN BY FILING AN APPLICATION U/S.154 OF IT ACT, AS ALSO AN APPEAL HAS ALREADY BEEN FILED. UNDER THESE CIRCUMSTANCES, WE HEREBY HOL D THAT THERE WAS NO MA NO.114/AHD/2010 ( IN ITA NO. 371/AHD /2006) CHAROTAR NAGRIK SAHAKARI BANK LTD. VS. ACIT ASST.YEAR 2002-03 - 7 - MISTAKE ON THE PART OF THE TRIBUNAL SO AS TO RECTIF Y U/S.254(2) OF IT ACT, HENCE HEREBY DISMISS THIS MISCELLANEOUS PETITION. 5. IN THE RESULT, MISCELLANEOUS APPLICATION FILED B Y THE ASSESSEE IS DISMISSED. '. #' / ! 0 1 THIS ORDER IS PRONOUNCED IN OPEN COURT ON 1 3 /01/2012 SD/- SD/- ( . ! ! ) ( ) '# ( A. MOHAN ALANKAMONY ) ( MUKUL KR. SHRAWAT ) ACCOUNTANT MEMBER JUDICIA L MEMBER AHMEDABAD; DATED 13/ 01 /2012 2,..!, .!../ T.C. NAIR, SR. PS '. + 34 5'4% '. + 34 5'4% '. + 34 5'4% '. + 34 5'4%/ COPY OF THE ORDER FORWARDED TO : 1. '6 / THE APPLICANT 2. 37'6 / THE RESPONDENT. 3. 8 / CONCERNED CIT 4. 8() / THE CIT(A)-IV, BARODA 5. 4;0 3! , , / DR, ITAT, AHMEDABAD 6. 0< =* / GUARD FILE. '.! '.! '.! '.! / BY ORDER, 74 3 //TRUE COPY// > >> >/ // / ( ( ( ( ( DY./ASSTT.REGISTRAR) , , , , / ITAT, AHMEDABAD 1. DATE OF DICTATION..13.1.2012 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13.1.2012 OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.13.1.2012 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 13.1.2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 9. DATE OF DESPATCH OF THE ORDER