ITO, JHALAWAR V. M/S JHALAWAR SAHKARI BHOOMI VIKAS BANK LTD., JHALAWAR

MA 45/JPR/2012

• Counselvise Citation: [2015] 124 COUNSELVISE.COM (IT) 3022 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 6 month(s) 16 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 15-05-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 29-10-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: MAHENDRA GARGIA
• Keywords: Business income
• Section: 143(3); 56; 154

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR JH VKJ-IH-RKSYKUH] U;KF;D LNL; ,OA JH VH-VKJ-EHUK] YS[KK LNL; DS LE{K BEFORE: SHRI R.P. TOLANI, JM & SHRI T.R. MEENA, AM M.A. NO. 47/JP/2012 (ARISING OUT OF ITA NO. 812/JP/2011) ASSTT. YEAR-2005-06 JHALAWAR SAHKARI BHOOMI VIKAS BANK LTD., JHALAWAR CUKE VS. I.T.O., JHALAWAR. LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO. AAAAJ 1243 M VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT M.A. NO. 45/JP/2012 (ARISING OUT OF ITA NO. 812/JP/2011) ASSTT. YEAR-2005-06 I.T.O., JHALAWAR. CUKE VS. JHALAWAR SAHKARI BHOOMI VIKAS BANK LTD., JHALAWAR LFKK;H YS[KK LA-@THVKBZVKJ L A-@ PAN/GIR NO. AAAAJ 1243 M VIHYKFKHZ @ APPELLANT IZR;FKHZ @ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI MAHENDRA GARGIA (ADV) JKTLO DH VKSJ LS @ REVENUE BY : SHRI KAILASH MANGAL (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 15/05/2015 ?KKS'K .KK DH RKJH[ K @ DATE OF PRONOUNCEMENT : 15/05/2015 M.A. NO. 47 & 45 /JP/2012_ JHALAWAR SAHKARI BHOOMI VIKAS BANK LTD. VS. ITO 2 VKNS'K @ ORDER PER: T.R. MEENA, A.M. BOTH ARE THE CROSS MISC. APPLICATIONS, ONE BY THE ASSESSEE AND ANOTHER BY THE REVENUE FILED U/S U/S 254(2) OF THE INCOME TA X ACT, 1961 (IN SHORT THE ACT) AGAINST THE ORDER OF THIS BENCH OF ITAT, JAIPUR IN ITA NO. 812/JP/2011, WHICH WAS PASSED ON 31/05/2012. 2. IN ASSESSEES M.A., IT SUBMITTED AS UNDER:- 1. THAT ABOVE APPEAL WAS DECIDED BY THIS HONBLE ITAT VIDE ORDER DATED 31/05/2012, FOR A.Y. 2005-06, IN THE APPEAL F ILED BY THE REVENUE. A COPY OF THE SAME IS ENCLOSED HERE WITH FO R A READY REFERENCE AND MARKED AS ANNEXURE-1. 2. BEFORE PROCEEDING TO POINT OUT THE EXACT NATURE OF MISTAKE, IT IS NECESSARY TO APPRAISE THE HONBLE BENCH WITH THE REL EVANT FACTUAL BACKGROUND. THE ASSESSEE IS A FINANCIAL INSTITUTION REGISTERED UNDER CO- OPERATIVE SOCIETY ACT AND DERIVES INCOME FROM INTE REST. THE RETURN OF INCOME (ROI) WAS FILED ON 26/10/2007, SHOWI NG TOTAL INCOME AT NIL, AFTER SETTING OFF B/F BUSINESS LOSSE S FOR PREVIOUS YEARS, WHEREAS ASSESSMENT ORDER WAS PASSED U/S 143(3) ON 26/10/2007 AT TOTAL INCOME OF RS. 28,64,487/- BY DE TERMINING THE DECLARED INCOME AS INCOME FROM OTHER SOURCES. HOWEVE R, DUE TO SET OFF OF CARRY FORWARD BUSINESS LOSSES THE NET INC OME WAS M.A. NO. 47 & 45 /JP/2012_ JHALAWAR SAHKARI BHOOMI VIKAS BANK LTD. VS. ITO 3 ASSESSED AT NIL. SUBSEQUENTLY, THE A.O. PASSED ORDE R U/S 154 DATED 29/05/2009 AND WITHDREW THE BENEFIT OF SET OFF. THE APPEAL AGAINST THE SAID ORDER U/S 154 WAS DECIDE D ON DATED 29/07/2011 IN APPEAL NO. 61/09-10. THE LD. CIT(A) HO WEVER, DISMISSED THE SAME, AGAINST WHICH THE DEPARTMENT HAS COME IN SECOND APPEAL. ON THE OTHER HAND, THE APPEAL AGAINS T U/S 143(3) WAS DECIDED BY THE LD CIT(A) ON 28/07/2011 IN APPEAL NO. 15/10- 11 HOLDING THE SUBJECTED THREE INCOMES WERE BUSINESS INCOME AND ELIGIBLE FOR DEDUCTION U/S 80P(2)(A)(I) OF THE ACT. 3. THE HONBLE ITAT PROCEEDED TO DECIDE THE APPEAL AG AINST THE ORDER OF THE LD. CIT(A) DATED 28/07/2011 BEING AGAIN ST THE ORDER U/S 143(3) AS MODIFIED BY THE ORDER U/S 154 DATED 2 9/07/2011. VIDE PARA 2 OF THE SUBJECTED ORDER, THE HONBLE IT AT PROCEEDED TO DECIDE THE ISSUE WHETHER THE THREE ITEMS OF INCOME V IZ INCOME FROM EMPLOYEES OF RS. 2,91,626/-, JEEP CHARGES OF R S. 8,53,392/- AND INCOME FROM NO DUES CERTIFICATES OF RS. 43,990/ - COULD BE EXCLUDED WHILE COMPUTING THE DEDUCTION U/S 80P(2)(A) (I) OF THE ACT. FURTHER VIDE PARA 3.3 THE HONBLE ITAT DECIDED THAT INTEREST FROM EMPLOYEES WAS NOT ELIGIBLE FOR DEDUCTION FOLLOWI NG THE DECISIONS OF HON'BLE SUPREME COURT IN THE CASE OF TO TAGARS COOPERATIVE SALE SOCIETY LTD. VS. ITO (2010) 322 ITR 283 (SC) AND CIT VS/ KOTAGIRI INDL. COOP. TEA FACTORY (1997) 2 24 ITR 604 (SC). FURTHER VIDE PARA 4 & 5 THE HONBLE ITAT HELD THE INCOMES FROM JEEP CHARGES AND NO DUES CERTIFICATES AS ELIGI BLE FOR THE DEDUCTION. HOWEVER, THEREAFTER VIDE PARA 6.1 THE HON BLE ITAT OBSERVED THAT THE REAL ISSUE WAS NOT THE ELIGIBILITY OF CERTAIN M.A. NO. 47 & 45 /JP/2012_ JHALAWAR SAHKARI BHOOMI VIKAS BANK LTD. VS. ITO 4 INCOME FOR DEDUCTION U/S 80P(2)(A)(I) OF THE ACT BU T WAS WHETHER SUCH INCOMES WOULD FALL TO BE ASSESSED AS INCOME FRO M OTHER SOURCES U/S 56 OF THE ACT OR AS SPROFITS OR GAINS O F BUSINESS U/S 28. IN PARA 6.3, THE HONBLE ITAT CONSIDERED ALL THE THREE INCOMES AS INCOMES TO BE ASSESSED AS ICOME FROM PROFITS OR GAINS OF BUSINESS AND NOT INCOME FROM OTHER SOURCES. SOME OF THE FINDINGS RECORDED BY THE HONBLE ITAT IN PARA 6.2 ARE EXTRACT ED HEREUNDER: 6.2.------AS REGARDS THE INCOME BY WAY OF INTERES T FROM EMPLOYEES DISCUSSED VIDE PARA 3 OF THIS ORDER, THE SAME IN OUR VIEW WOULD STAND TO BE ANSWERED IN FAVOUR OF IT BEING A BUSINESS INCOME. ---------ACCORDINGLY, ALL THE THREE INCOMES UNDER REFERENCE, IRRESPECTIVE OF WHETHER EXIGBLE TO DEDUCTION U/S 80P (2)(A)(I) OR NOT, ARE LIABLE TO BE ASSESSED AS BUSINESS INCOME I .E. AS RETURNED BY THE ASSESSEE. ----------THERE IS NO CASE FOR DISTURBING THE ASS ESSEES RETURN IN RESPECT OF THESE THREE INCOMES, BEING LIABLE TO BE ASSESSED AS BUSINESS INCOME, WHICH WOULD STAND TO BE SET OFF AGAI NST THE BROUGHT FORWARD LOSS U/S 72 OF THE ACT.------------- -- THE HONBLE ITAT ALSO DISTINGUISHED THE CASE OF TOTAG ARS (SUPRA) ON FACT AND HENCE, WAS NOT APPLICABLE ON THE CASE IN HAND. THE PRIMARY ISSUE FRAMED BY THE HONBLE ITAT VIDE PARA 6.1 BEFORE IT, WAS THUS, DECIDED IN FAVOUR OF THE ASSESSEE. 4. HOWEVER, IN PARA 7 AT PAGE 7, THE HONBLE ITAT ONC E AGAIN CAME BACK TO THE CASE LAWS RELIED UPON BY THE ASSESSEE A ND OBSERVED M.A. NO. 47 & 45 /JP/2012_ JHALAWAR SAHKARI BHOOMI VIKAS BANK LTD. VS. ITO 5 THAT THEY WERE NOT ON THE ISSUE INVOLVED NOR WERE REL EVANT AND WERE GIVEN PRIOR TO THE DECISION OF TOTAGARS (SUPRA) AND THEREFORE, TOTAGARS (SUPRA) AND KOTAGIRI INDL. COOP . TEA FACTOR (SUPRA) WERE FOUND TO BE APPLICABLE ON THE FACTS OF THE CASE AND ACCORDINGLY, WERE APPLIED. THE APPEAL OF THE REVENUE WAS DISPOSED OFF THUS, IN THE ABOVE TERMS. 5. IT IS HUMBLY SUBMITTED THAT THE HONBLE ITAT HAS CLEARLY FRAMED THE PRIMARY ISSUE BEFORE IT VIDE PARA 6.1 AND ALSO CITED CERTAIN CASE LAWS TO BRING HOME THE POINT THAT THE LAW IS WELL SETTLED THAT THE TRIBUNAL HAS GOT ENOUGH POWER AND ITS JURISDICTIO N PERMITS IT TO ADJUDICATE THE REAL ISSUE BEFORE IT. OTHERWISE AL SO THE REAL ISSUE WAS WHETHER THE THREE ITEMS OF INCOME WERE TO BE TREAT ED AS BUSINESS INCOME OR INCOME FROM OTHER SOURCES. THE HO NBLE ITAT IN A DETAILED MANNER HAD ALREADY DECIDED VIDE PARA 6.2 AS ABOVE THAT ALL THE THREE ITEMS OF INCOME WHERE TO BE TREAT ED AS BUSINESS INCOME. HOWEVER, AGAIN VIDE PARA 7 THE FINDINGS RECORDED BY THE HONBLE ITAT (WITH A CROSS REFERENCE TO PARA 3.1 OF THE SAME ORDER), HAS CREATED A BONAFIDE CONFUSION AS TO WHETHER THE HON BLE ITAT HAVING DECIDED THE ISSUE CLEARLY IN FAVOUR OF THE A SSESSEE VIDE PARA 6.1 AND 6.2, HAS TAKEN A U-TURN I.E. APPEARS TO HAVE DECIDED THE APPEAL AGAINST THE ASSESSEE. THIS IS MORE PARTI CULARLY WHEN IN THE LAST PARA NO. 8, IT IS HELD THAT THE REVENUES APPEAL IS DISPOSED OF IN THE ABOVE TERMS. IT IS NOT CLEAR WHE THER THE APPEAL OF THE REVENUE IS DISMISSED OR ALLOWED. IN AN Y CASE, HOWEVER, THE HONBLE ITAT, HAVING ALREADY CLOSED THE ISSUE OF THE M.A. NO. 47 & 45 /JP/2012_ JHALAWAR SAHKARI BHOOMI VIKAS BANK LTD. VS. ITO 6 ALLOWABILITY OR OTHERWISE OF THE DEDUCTION U/S 80P(2) (A)(I) OF THE ACT WHICH WAS NOT THE REAL ISSUE AS THE ASSESSEE NEIT HER CLAIMED NOR THERE WAS ANY POSSIBILITY OF MAKING A CLAIM OF S UCH DEDUCTION OF CHAPTER VI A FOR WANT OF THE POSITIVE GROSS TOTAL INCOME, AND HAVING FRAMED THE REAL ISSUE BEFORE IT, THERE WAS NO NECESSITY OF AGAIN REPEATING OR RECORDING FINDING IN PARA 7. 6. THIS WAY, A MISTAKE APPARENT FROM THE FACT HAS CRE PT WHICH DESERVES A SUITABLE RECTIFICATION U/S 254(2) OF THE ACT AND IT IS HUMBLY PRAYED THAT PARA 7, IF THOUGHT FIT KINDLY BE REMOVED WHICH IS CREATING A CONFUSION AND IT MAY KINDLY BE DECLAR ED VERY SPECIFICALLY WHAT HAS BEEN THE FATE OF THE APPEAL OF THE REVENUE. 3. THE REVENUE HAS SUBMITTED THAT ADMITTEDLY, THE M. A. AGAINST THE APPEAL ORDER DATED 31/5/2012 PASSED IN ITA NO. 812/JP/2011 IN CASE OF JHALAWAR SAHKARI BHOOMI BANK LTD. IN A.Y. 2005-06 AS THE ISS UE DECIDED IN THE DEPARTMENTAL APPEAL IS COVERED BY THE DECISION OF H ON'BLE SUPREME COURT IN THE CASE OF TOTAGARS COOPERATIVE SALE SOCIETY LTD. VS. ITO (SUPRA) AND PRAYED TO REVIEW THE APPEAL ORDER BY THE ASSESSING OFFICER. 4. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON THE RECORD AND ALSO GONE THRO UGH THE COORDINATE BENCH DECISION. WE DO NOT FIND ANY APPARENT MISTAKE IN TH E ORDER DATED 31/5/2012 PASSED BY THIS BENCH. THE COORDINATE BENCH HAD CONSI DERED THE HON'BLE SUPREME COURTS DECISION IN THE CASE OF TOTAGARS CO OPERATIVE SALE SOCIETY M.A. NO. 47 & 45 /JP/2012_ JHALAWAR SAHKARI BHOOMI VIKAS BANK LTD. VS. ITO 7 LTD. VS. ITO (SUPRA) ON PAGE NO. 2 AND DETAILED FIN DINGS HAVE BEEN GIVEN ON IT WHEREIN THREE ITEMS OF INCOME I.E. INTEREST FROM EMP LOYEES AT RS. 2,91,626/-, JEEP CHARGES AT RS. 8,53,392/- AND NO DUES CERTIFIC ATE INCOME AT RS. 43,990/-. THEREFORE, THERE IS NO APPARENT MISTAKE. 5. IN THE RESULT, BOTH THE MISC. APPLICATIONS FILED BY THE ASSESSEE AS WELL AS THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 15/05/2015. SD/- SD/- VKJ-IH-RKSYKUH VH-VKJ-EHUK (R.P.TOLANI) (T.R. MEENA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ @ JAIPUR FNUKAD @ DATED:- 15 TH MAY, 2015 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- JHALAWAR SAHKARI BHOOMI VIKAS BANK LTD ., JHALAWAR 2. IZR;FKHZ @ THE RESPONDENT- THE I.T.O., JHALAWAR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (M.A. 47 & 45/JP/2012) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR