The ITO, Wd-2(1), Trivandrum V. The Government Secretariat Staff Co-op Society Ltd, Trivandrum

MA 140/COCH/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8837 (ITAT-COCHIN)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 10-01-2020
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 10-01-2020
• Assessment Year: 2014-2015
• Appeal Filed On: 24-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRITUNJAYA SHARMA
• Section: 201; 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. 135 /COCH/2019 : ASST.YEAR 201 3 - 201 4 (ARISING OUT OF ITA NO. 111 /COCH/201 9) MA NO.1 36 /COCH/2019 : ASST.YEAR 201 4 - 201 5 (ARISING OUT OF ITA NO. 112 /COCH/201 9) THE INCOME TAX OFFICER, WARD 2(1) TRIVANDRUM. VS. M/S. ANANTHAPURAM CO - OP. SOCIETY LTD., KAITHAMUKKU, TRIVANDRUM 695 021 . PAN : AAEAA4313K . ( APPLICANT ) (RESPONDENT) MA NO.137/COCH/2019 : ASST.YEAR 2014 - 2015 (ARISING OUT OF ITA NO. 97 /COCH/201 9) THE INCOME TAX OFFICER, WARD 2(1) TRIVANDRUM. VS. M/S.KERALA UNIVERSITY EMPLOYEES CO - OP. SOCIETY, UNIVERSITY OFFICE BUILDING PALAYAM TRIVANDRUM 695 034. PAN : AADAT4659A. ( APPLICANT ) (RESPONDENT) APPLICANT BY : SRI.MRITUNJAYA SHARMA , SR.DR RESPONDENT BY : --- NONE --- MA NO. 140 /COCH/2019 : ASST.YEAR 201 4 - 201 5 (ARISING OUT OF ITA NO. 93 /COCH/201 9) THE INCOME TAX OFFICER, WARD 2( 1 ) TRIVANDRUM. VS. M/S. THE GOVT. SECRETARIAT STAFF CO - OP. SOCIETY, NEAR CANTONMENT POLICE STATION, A.G.POST OFFICE TRIVANDRUM 695 001 . PAN : AACAT4582D . ( APPLICANT ) (RESPONDENT) APPLICANT BY : SRI.MRITUNJAYA SHARMA , SR.DR RESPONDENT BY : --- NONE --- (ADJOURNMENT APPLICATION DATED 08.01.2020) M A NO. 135 / COCH /201 9 & ORS. M/S. ANANTHAPURAM CO - OP. SO.LTD.& ANR. 2 DATE OF HEARING : 10.01.2020 DATE OF PRONOUNCEMENT : 10 .01.2020 O R D E R PER GEORGE GEORGE K. (JM) THESE MISCELLANEOUS APPLICATIONS AT THE INSTANCE OF THE DEPARTMENT ARE DIRECTED AGAINST VARIOUS ORDER S OF THE TRIBUNAL. 2. COMMON ISSUE IS RAISED IN THESE MISCELLANEOUS APPLICATIONS, HENCE, THEY WERE HEARD TOGETHER 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 , CO - OPERATIVE BAN KS, OTHER BANK S 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 YE AR 2009 - 2010 IN ITA NO.525/COCH/2014 M A NO. 135 / COCH /201 9 & ORS. M/S. ANANTHAPURAM CO - OP. SO.LTD.& ANR. 3 (ORDER DATED 20.07.2016) DECIDED THE ISSUE IN FAVOUR OF THE 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 80P(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 ORDER S OF THE TRIBUNAL FOR CONFIRMING THE CIT(A)S O RDER 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 T HE MISCELLANEOUS APPLICATIONS. THE LEARNED AR SUBMITTED THAT THERE IS NO MISTAKE APPARENT IN THE ORDER S OF THE TRIBUNAL, 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 PERUSED THE MA TERIAL 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.A CT. 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 DATED 20.07.2016) DECIDED THE ISSUE IN FAVOU R OF THE ASSESSEE. M A NO. 135 / COCH /201 9 & ORS. M/S. ANANTHAPURAM CO - OP. SO.LTD.& ANR. 4 THE CIT(A) HELD THAT THE INTEREST INCOME EARNED ON INVESTMENT MADE WITH TREASURY AND BANKS ARE PART OF THE BANKING 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 T RIBUNAL IN THE IMPUGNED ORDER HAD RELIED ON THE FOLLOWING JUDICIAL PRONOUNCEMENTS: - (I) CIT V. KARNATAKA STATE CO - OPERATIVE BANK [ 251 ITR 194 (SC) ] (II) VAVERU CO - OPERATIVE RURAL BANK LTD. V CIT [(2017) 396 ITR 371 (THE TELUNGANA AND ANDHRA PRADESH HI GH 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] (VII) 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 I TS MEMBERS AND THE INCOME SHOULD BE ASSESSED AS INCOME FROM M A NO. 135 / COCH /201 9 & ORS. M/S. ANANTHAPURAM CO - OP. SO.LTD.& ANR. 5 BUSINESS AND NOT AS INCOME FROM OTHER 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. THERE IS NO MISTAKE APPARENT ON RECORD IN THE ORDERS OF THE ITAT, 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 10 TH DAY OF JANUARY, 2020 . SD/ - SD/ - ( CHANDRA POOJARI ) ( GEORGE GEORGE K. ) ACCOUNTANT MEMBER JUDICIA L MEMBER COCHIN ; DATED : 10 TH JANUARY, 2020 . 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.