The ITO,Wd/2(1), Trivandrum V. M/s.Postal Telecom BSNL Employees Co-op Society Ltd, Trivandrum

MA 130/COCH/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3776 (ITAT-COCHIN)
• Duration Of Justice: 1 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 29-11-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 24-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A S BINDHU
• Section: 251; 254(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI CHANDRA POOJAR I, AM & SHRI GEORGE GEORGE K, JM MA NO.127/COCH/2019 : ASST.YEAR 2010 - 2011 (ARISING OUT OF ITA NO. 68 /COCH/201 9 ) MA NO.128/COCH/2019 : ASST.YEAR 2011 - 2012 (ARISING OUT OF ITA NO. 69 /COCH/201 9) MA NO.129/COCH/2019 : ASST.YEAR 2012 - 2013 (ARISING OUT OF ITA NO. 70 /COCH/201 9) MA NO.130/COCH/2019 : ASST.YEAR 2013 - 2014 (ARISING OUT OF ITA NO. 71 /COCH/201 9) MA NO.131/COCH/2019 : ASST.YEAR 2014 - 2015 (ARISING OUT OF ITA NO. 72 /COCH/201 9) THE INCOME TAX OFFICER, WARD 2(1) TRIVANDRUM. VS. M/S.POSTAL TELECOM BSNL EMPLOYEES CO - OP. SOCIETY LTD.,NEAR GANDHARI AMMA KOIL ROAD, TRIVANDRUM 695 001. PAN : AAEAP3000C. ( APPLICANT ) (RESPONDENT) APPLICANT BY : SMT. A.S.BINDHU, SR.DR RESPONDENT BY : SRI.AMALJITH P.J., FCA MA NO.126/COCH/2019 : ASST.YEAR 2015 - 2016 (ARISING OUT OF ITA NO. 100 /COCH/201 9) THE INCOME TAX OFFICER, WARD 2(2) TRIVANDRUM. VS. M/S.AVANAKUZHY SERVICE CO - OP. SOCIETY, AGP 43/13, BANK BUILDING THANNIMOODU TRIVANDRUM 695 123. PAN : AACAA0595P. ( APPLICANT ) (RESPONDENT) APPLICANT BY : SMT. A.S.BINDHU, SR.DR RESPONDENT BY : SMT.SHAMEERA C.ASHRAF M A NO. 127 / COCH /201 9 & ORS. M/S.POSTAL TELECOM BSNL EMPL.CO - OP SO.LTD. & ANR. 2 DATE OF HEARING : 29 . 11 .2019 DATE OF PRONOUNCEMENT : 29 . 11 .2019 O R D E R PER GEORGE GEORGE K. (JM) THESE MISCELLANEOUS APPLICATIONS AT THE INSTANCE OF THE DEPARTMENT ARE DIRECTED AGAINST THE CONSOLIDATED ORDER OF THE TRIBUNAL DATED 30.04.2019. 2. COMMON ISSUE IS RAISED IN THESE MISCELLANEOUS APPLICATIONS, HENCE, THEY WERE HEARD TOGET HER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER. 3 . BRIEF FACTS OF THE CASE ARE AS FOLLOW: THE ASSESSEES ARE PRIMARY AGRICULTURAL CREDIT SOCIETIES, REGISTERED UNDER THE KERALA CO - OPERATIVE SOCIETIES ACT, 1969. IT IS CARRYING ON THE BUSINESS OF BANKING / PROVIDING CREDIT FACILITIES TO ITS MEMBERS. FOR THE ASSESSMENT YEARS UNDER CONSIDERATION, THE ASSESSMENTS WERE COMPLETED BY TREATING INTEREST INCOME RECEIVED FROM INVESTMENT WITH TREASURY AND BANK AS INCOME FROM OTHER SOURCES; THEREBY DENYING THE CLAIM OF DEDUCTION U/S 80P(2)(A)(I) OF THE I.T.ACT. 4 . AGGRIEVED BY THE ASSESSMENT ORDERS COMPLETED, THE ASSESSEES PREFERRED APPEAL TO THE FIRST APPELLATE AUTHORITY. THE CIT(A) FOLLOWING THE ORDER OF THE COCHIN BENCH OF THE TRIBUNAL IN THE CASE OF KIZHATHADIYOOR SERVICE CO - OPERATIVE BANK LTD. FOR ASSESSMENT YEAR 2009 - 2010 IN ITA NO.525/COCH/2014 (ORDER D ATED 20.07.2016) DECIDED THE ISSUE IN FAVOUR OF THE M A NO. 127 / COCH /201 9 & ORS. M/S.POSTAL TELECOM BSNL EMPL.CO - OP SO.LTD. & ANR. 3 ASSESSEE. THE CIT(A) HELD THAT INTEREST INCOME EARNED ON INVESTMENT MADE WITH TREASURY AND BANKS ARE PART OF THE BANKING ACTIVITY OF ASSESSEE AND THEREFORE THE SAID INCOME WAS ELIGIBLE FOR DEDUCTION U/S 8 0P(2)(A)(I) OF THE I.T.ACT. 5. THE ITAT CONFIRMED THE VIEW TAKEN BY THE CIT(A). THE REVENUE HAS FILED THESE MISCELLANEOUS APPLICATIONS SEEKING TO RECALL THE CONSOLIDATED ORDER OF THE TRIBUNAL DATED 30.04.2019 FOR CONFIRMING THE CIT(A)S ORDER IN GRANTING BENEFIT OF DEDUCTION U/S 80P(2)(A)(I) OF THE I.T.ACT IN RESPECT OF INTEREST INCOME RECEIVED BY THE ASSESSEE FROM INVESTMENTS MADE WITH TREASURY AND OTHER BANKS. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE GROUNDS RAISED IN THE MISCELLANEOUS APPLICATIONS. THE LEARNED AR SUBMITTED THAT THERE IS NO MISTAKE APPARENT IN THE CONSOLIDATED ORDER OF THE TRIBUNAL DATED 30.04.2019, REQUIRING THE TRIBUNAL TO INTERFERE WITH THE SAME U/S 254(2) OF THE I.T.ACT. 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL ON RECORD. IN THESE CASES, THE ASSESSMENTS WERE COMPLETED BY TREATING THE INTEREST INCOME RECEIVED FROM INVESTMENTS MADE WITH TREASURY AND OTHER BANKS AS INCOME FROM OTHER SOURCES, THEREBY DENYING THE CLAIM OF DEDUCTION U/S 80P(2)(A)(I) OF THE I.T.ACT. ON FURTHER APPEAL, THE CIT(A) FOLLOWING THE ORDER OF THE COCHIN BENCH OF THE TRIBUNAL IN THE CASE OF KIZHATHADIYOOR SERVICE CO - OPERATIVE BANK LTD. FOR ASSESSMENT YEAR 2009 - 2010 IN ITA NO.525/COCH/2014 (ORDER M A NO. 127 / COCH /201 9 & ORS. M/S.POSTAL TELECOM BSNL EMPL.CO - OP SO.LTD. & ANR. 4 DATED 20.07.2016) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE CIT(A) HELD THAT THE INTER E ST INCOME EARNED ON INVESTMENT MADE WITH TREASURY AND BANKS ARE PART OF THE BA NKING ACTIVITY OF THE ASSESSEE, AND THEREFORE, THE SAID INCOME WAS ELIGIBLE FOR DEDUCTION U/S 80P(2)(A)(I) OF THE I.T.ACT. THE TRIBUNAL IN THE IMPUGNED ORDER HAD RELIED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: - (I) CIT V. KARNATAKA STATE CO - OPERATIVE BAN K [ 251 ITR 194 (SC) ] (II) VAVERU CO - OPERATIVE RURAL BANK LTD. V CIT [(2017) 396 ITR 371 (THE TELUNGANA AND ANDHRA PRADESH HIGH COURT) (III) MUTTOM SERVICE CO - OPERATIVE BANK LTD. (ITA NO.372/COCH/2010) (IV) MUNDAKKAYAM SERVICE CO - OPERATIVE BANK LTD. (ITA NO.106/COCH/2016). (V) THE MANGALAM SERVICE CO - OPERATIVE BANK LTD. V. ITO (ITA NO.495/COCH/2017 ORDER DATED 17.10.2017) (VI) M/S.MUTHOLY SCB LTD. V. ITO [ITA NO.11/COCH/2014 ORDER DATED 24.09.2014] (VI I) THE AZHIKODE SERVICE CO - OPERATIVE BANK LTD. & OTHERS (ITA NO.261/COCH/2017 & OTHERS ORDER DATED 12 TH JULY, 2017) 7 . 1 AFTER REFERRING TO THE ABOVE JUDICIAL PRONOUNCEMENTS, THE TRIBUNAL CAME TO A CATEGORICALLY FINDING THAT THE ASSESSEES IN THESE CASES HAD MADE INVESTMENTS WITH SUB - TREASURIES, DISTRICT CO - OPERATIVE BANKS AND OTHER BANKS IN THE COURSE OF ITS BUSINESS OF BANKING / PROVIDING CREDIT FACILITIES TO ITS M A NO. 127 / COCH /201 9 & ORS. M/S.POSTAL TELECOM BSNL EMPL.CO - OP SO.LTD. & ANR. 5 MEMBERS AND THE INCOME SHOULD BE ASSESSED AS INCOME FROM BUSINESS AND NOT AS INCOME FROM OTH ER SOURCES. THEREFORE, IT WAS CATEGORICALLY CONCLUDED BY THE TRIBUNAL THAT THE ASSESSEES IN THESE CASES WERE ENTITLED TO THE DEDUCTION U/S80P(2)(A)(I) OF THE I.T.ACT ON THE INTEREST INCOME RECEIVED ON SUCH INVESTMENTS. T HERE IS NO MISTAKE APPARENT ON RECOR D IN THE CONSOLIDATED ORDER OF THE ITAT DATED 30.04.2019, WARRANTING OUR INTERFERENCE U/S 256(2) OF THE I.T.ACT. IT IS ORDERED ACCORDINGLY. 8 . IN THE RESULT, THE MISCELLANEOUS APPLICATIONS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON THIS 29 TH DAY OF NOVEMBER , 2019 . SD/ - SD/ - ( CHANDRA POOJARI ) ( GEORGE GEORGE K. ) ACCOUNTANT MEMBER JUDICIA L MEMBER COCHIN ; DATED : 29 TH NOVEMBER , 2019 . DEV A DAS G * COPY OF THE ORDER FORWARDED TO : BY ORDER, (ASSTT. REGISTRAR) ITAT, COCHIN 1. THE APPLICANTS. 2. THE RESPONDENT. 3. THE CIT (APPEALS) - THIRUVANANTHAPURAM . 4. THE PR.CIT THIRUVANANTHAPURAM. 5. DR, ITAT, COCHIN 6 . GUARD FILE.