The Classic Co.operative Bank Ltd., Ahmedabad V. ITO, Ward-5(2)(4), Ahmedabad

MA 171/AHD/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3128 (ITAT-AHMEDABAD)
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 11-03-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 02-04-2019
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Set aside

Judgement Text

- , - IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D BEFORE SHRI RAJPAL YADAV, VICE-PRESIDENT AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER MISC. APPLICATION NO.171/AHD/2019 IN ITA NO.1873/AHD/2017 / ASSTT.YEAR : 2013-14 THE LIQUIDATOR THE CLASSIC CO-OP BANK LTD NR.PUNJABI HALL NAVRANGPURA AHMEDABAD. VS. ITO, WARD - 5(2)(4) AHMEDABAD. ( APPLICANT ) ( RESPONENT ) ASSESSEE BY : NONE REVENUE BY : SHRI DILIPKUMAR, SR.DR / DATE OF HEARING : 06/03/2020 ! / DATE OF PRONOUNCEMENT: 11/03/2020 / O R D E R PER RAJPAL YADAV, VICE-PRESIDENT PRESENT MA IS DIRECTED AT THE END OF THE ASSESSEE P OINTING OUT APPARENT ERROR IN THE ORDER OF THE TRIBUNAL DATED 11.1.2019 PASSED IN ITA NO.1873/AHD/2017. 2. THE TRIBUNAL WHILE DECIDING THE APPEAL OF THE AS SESSEE RECORDED THE FOLLOWING FINDING: MA NO.171/AHD/2019 2 2. GROUNDS OF APPEAL TAKEN BY THE ASSESSEE ARE NOT IN CONSONANCE WITH RULE 8 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963. THEY ARE DESCRIPTIVE AND ARGUMENTATIVE IN NATURE. IN BR IEF, GRIEVANCE OF THE ASSESSEE IS THAT THE LD.CIT(A) HAS ERRED IN UPHOLDI NG FINDING OF THE AO THAT THE ASSESSEE IS NOT ENTITLED FOR DEDUCTION AMO UNTING TO RS.7,70,959/- UNDER SECTION 80P(2)(D) OF THE INCOME TAX ACT, 1961. 3. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, W E HAVE GONE THROUGH THE RECORD CAREFULLY. IT EMERGES OUT FROM THE RECORD THAT THE ASSESSEE WAS EARLIER A COOPERATIVE BANK, BUT SUBSEQ UENTLY, ITS LICENCE WAS CANCELLED BY RESERVE BANK OF INDIA, HENCE, IT I S BEING ASSESSED IN THE STATUS OF CREDIT SOCIETY. IT HAS FILED ITS RET URN OF INCOME DECLARING NIL INCOME ON 13.2.2014. THE LD.AO HAS GONE THROUG H THE RECORD AND OBSERVED THAT THE ASSESSEE EARNED INTEREST INCOME A MOUNTING TO RS.7,70,959/- ON DEPOSITS WITH GUJARAT STATE COOPER ATIVE BANK. THE LD.AO HAS HELD THAT THIS INTEREST INCOME DOESNT QU ALIFY FOR GRANT OF DEDUCTION UNDER SECTION 80P(2)(D) OF THE ACT. ACCO RDINGLY HE DISALLOWED THIS DEDUCTION AND MADE ADDITION. APPEA L TO THE LD.CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. 4. BEFORE US, THE LD.COUNSEL FOR THE ASSESSEE AT TH E VERY OUTSET SUBMITTED THAT THE ASSESSEE HAS NOT CLAIMED ANY DED UCTION IN THE COMPUTATION OF INCOME. HENCE, THERE COULD NOT BE A NY DISALLOWANCE AT THE END OF THE AO. ON THE OTHER HAND, LD.DR RELIED UPON THE ORDER OF THE AO. 5. ON DUE CONSIDERATION OF THE ABOVE FACTS AND CIRC UMSTANCES, WE FIND THAT THE ASSESSEE HAS NOT PLACED ON RECORD COP Y OF COMPUTATION OF INCOME. THOUGH, THE LD.COUNSEL FOR THE ASSESSEE IS POSSESSING ACKNOWLEDGEMENT WHICH WAS PRODUCED BEFORE US, BUT F ROM THIS ACKNOWLEDGEMENT, COMPLETE DETAILS OF THE INCOME COM PUTED BY THE ASSESSEE FOR THE PURPOSE OF TAXATION ARE NOT DISCER NIBLE. THEREFORE, WE DEEM IT APPROPRIATE TO SET ASIDE THE ISSUE TO THE F ILE OF THE AO FOR VERIFICATION. THE LD.AO SHALL EXAMINE COMPUTATION OF INCOME AND IF IT REVEALS THAT NO DEDUCTION UNDER SECTION 80P(2)(D) Q UA THIS INTEREST INCOME IS CLAIMED BY THE ASSESSEE, THEN THERE COULD NOT BE ANY DISALLOWANCE BECAUSE THAT WILL AMOUNT TO DOUBLE DIS ALLOWANCE. ONCE THE ASSESSEE HAS NOT CLAIMED; TWICE THE AO HIMSELF HAS CARVED OUT THIS AMOUNT AND MADE ADDITION. IN CASE IF SUCH DEDUCTIO N IS NOT CLAIMED IN COMPUTATION OF INCOME, THEN NO DISALLOWANCE BE MADE TO THE TOTAL INCOME OF THE ASSESSEE. THE AO SHALL DECIDE THE IS SUE IN ACCORDANCE WITH LAW. MA NO.171/AHD/2019 3 6. IT IS TO MENTION HERE THAT OBSERVATION MADE BY U S WILL NOT IMPAIR OR INJURE THE CASE OF THE AO NOR CAUSE ANY PREJUDIC E TO THE DEFENCE/EXPLANATION OF THE ASSESSEE IN THE SET ASID E PROCEEDINGS BEFORE THE AO. 3. IN THE APPLICATION, THE ASSESSEE HAS PLEADED AS UNDER: A. STATEMENT OF FACTS : RS.7,70,959.00 HAS BEEN DISALLOWED IN RESPECT OF DE DUCTION U/S 80P(2)(D). THE A.O & CIT(APPEALS) ERRED IN DISALLOWANCE OF ABO VEMENTIONED DEDUCTION AS THE SAME INCOME DERIVED BY WAY OF INTEREST INCOM E BY CO-OPERATIVE SOCIETY FROM ITS INVESTMENTS IN OTHER CO-OPERATIVE SOCIETY, IT IS ARGUED THAT THE SAME INCOME IS DEDUCTIBLE U/S 80P(2)(D). THIS I S THE FACT THAT ASSESSEE'S LICENSE WAS CANCELLED AND THE ASSESSEE IS NOT ELIGI BLE TO BE CONSIDERED AS A STATE COOPERATIVE BANK. THE INCOMES UNDER CONSIDERA TION, ARE ARISING IN THE FINANCIAL YEAR 2012-13 I.E. FROM 1.4.2012 TO 31.3.2 013. DURING THIS PERIOD THE ASSESSEE COULD NOT ENGAGE ITSELF IN ANY BANKING ACTIVITY AS THE LICENSE WAS CANCELLED. THE ASSESSEE'S EXISTENCE AS A STATE CO-O PERATIVE BANK HAS ENDED AS THE RELEVANT NOTIFICATION HAS BEEN ALREADY STRUC K DOWN BY THE RBI. SINCE THE ASSESSEE IS NOT A BANKING COMPANY AND ALSO NOT A COOPERATIVE BANK, THE INCOME EARNED FROM CERTAIN ACTIVITIES DO NOT QUALIF Y FOR DEDUCTION UNDER SECTION 80(P)(2)(A)(I). THE SAME INCOME IS DEDUCTIB LE U/S 80P(2)(D). IT IS CONTENDED THAT THIS STATUS OF THE ASSESSEE AS SOCIE TY CONTINUED TO REMAIN EVEN AFTER ITS LICENSE TO TRANSACT BANKING ACTIVITY WAS CANCELLED. THEREFORE, INCOME EARNED FROM INTEREST FROM INVESTMENTS IN CO- OPERATIVE SOCIETIES IS QUALIFIED FOR DEDUCTION UNDER SECTION 80P(2)(D). SU BSTANTIAL INCOMES AROSE DUE TO INVESTMENTS. THE NATURE OF INCOME AS EARNED BY ASSESSEE IS AS UNDER: (A) INTERE ST INCO ME FRO M THE GUJA RAT STAT E CO- OPERATIVE BANK RS 7709 59 00 4. IN RESPONSE TO THE NOTICE OF HEARING NONE HAS CO ME PRESENT ON BEHALF OF THE ASSESSEE. 5. WITH THE ASSISTANCE OF THE LD.DR, WE HAVE GONE T HROUGH THE RECORD CAREFULLY. THE POWER OF RECTIFICATION UNDER SECTI ON 254 OF THE INCOME TAX ACT CAN BE EXERCISED ONLY WHEN THE MISTAKE, WHICH I S SOUGHT TO BE RECTIFIED, IS AN OBVIOUS PATENT MISTAKE, WHICH IS APPARENT FROM T HE RECORD AND NOT A MA NO.171/AHD/2019 4 MISTAKE, WHICH IS REQUIRED TO BE ESTABLISHED BY ARG UMENTS AND LONG DRAWN PROCESS OF REASONING ON POINTS, ON WHICH THERE MAY CONCEIVABLY BE TWO OPINIONS. A PERUSAL OF THE ABOVE STATEMENT OF FACTS PLEADED IN THE IMPUGNED RECTIFICATION APPLICATION WOULD INDICATE THAT THE A SSESSEE FAILED TO POINT OUT ANY APPARENT ERROR IN THE ORDER OF THE TRIBUNAL. T HEREFORE, WE DO NOT FIND ANY APPARENT ERROR IN THE ORDER OF THE TRIBUNAL, WHICH REQUIRE RECTIFICATION. ACCORDINGLY, MA IS DISMISSED. 6. IN THE RESULT, MISC. APPLICATION OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 11 TH MARCH, 2020 AT AHMEDABAD. S D / - (WASEEM AHMED) ACCOUNTANT MEMBER S D / - (RAJPAL YADAV) VICE-PRESIDENT