Mafallal Industries Ltd's Employees Co-Op. Credit Society Ltd., Nadiad V. The Income tax Officer, Nadiad

MA 46/AHD/2014

• Counselvise Citation: [2014] 124 COUNSELVISE.COM (IT) 1954 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 27-06-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 06-06-2014
• Assessment Year: misc
• Appeal Filed On: 12-03-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K C MATHEW
• Assessee Lawyers: M G PATEL
• Section: 56

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH BEFORE: SRI D.K TYAGI, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTAN T MEMBER MAFATLAL INDUSTRIES LTDS EMPLOYEES CO-OPERATIVE CREDIT SOCIETY LTD, NEW SHORROCK MILLS COMPOUND, KAPADWANJ ROAD, NADIAD PAN: AAAAM0581D (APPELLANT) VS THE INCOME TAX OFFICER, WARD-1, NADIAD (RESPONDENT) REVENUE BY: SRI K.C. MATHEW, SR.D.R. ASSESSEE BY: SRI M.G. PATEL, A.R. DATE OF HEARING : 06-06-2014 DATE OF PRONOUNCEMENT : 27-06-20 14 / ORDER PER : D.K. TYAGI, JUDICIAL MEMBER:- THROUGH THIS MISCELLANEOUS APPLICATION ASSESSEE WA NTS US TO RECALL OUR ORDER DATED 07-02-2014 ON THE GROUND THAT WE HA VE NOT CONSIDERED THE APPLICABILITY OF THE DECISION OF HONBLE CO-ORDINAT E BENCH IN THE CASE OF ITO VS. M/S. JAFRI MOMIN VIKAS CO-OP. CREDIT SOCIET Y LTD IN ITA NO. 1491/AHD/2012 WHICH WAS CITED BY THE ASSESSEE DURIN G THE APPELLATE M.A. NO. 46/AHD/2014 (IN ITA NO. 2797/AHD/2012) ASSESSMENT YEAR 2009-10 M.A. NO.46/AHD/2014 (IN ITA NO.2797/AHD/2012) A. Y. 2006-10 PAGE MAFATLAL INDUSTRIES LTDS EMPLOYEES CO-OPERATIVE CR EDIT SOCIETY VS. ITO 2 PROCEEDINGS. FOR MAKING THIS SUBMISSION ASSESSEE PL ACED RELIANCE ON THE DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF DATTANI AND CO. VS. ITO {2004} 41 TAXMANN.COM 360(GUJARAT). LD. DR ON T HE OTHER HAND SUBMITTED THAT THE DECISION OF THE CO-ORDINATE BENC H IN THE CASE OF M/S. JAFRI MOMIN VIKAS CO-OP. CREDIT SOCIETY BEING NOT A PPLICABLE TO THE FACTS OF THE CASE HAS RIGHTLY NOT BEEN FOLLOWED BY THE TRIBU NAL IN THIS CASE, THEREFORE THE MA FILED BY THE ASSESSEE DESERVES TO BE DISMISSED. 2. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORD, WE FIND THAT IN THIS CASE ISSUE BEFORE US WAS APPLICABILITY OF T HE PROVISIONS OF SECTION 80P(2)(A)(I). DURING THE ASSESSMENT PROCEEDINGS AO FOUND THAT ASSESSEE RECEIVED INTEREST INCOME OF RS. 31,16,440/- ON LOAN S ADVANCED TO ITS MEMBERS. AS PER AO PROVISION OF SECTION 80P(2)(A)( I) OF THE ACT IN THE CASE OF CO-OPERATIVE SOCIETY ENGAGED IN THE CARRYIN G OF BUSINESS OR PROVIDING CREDIT FACILITY TO ITS MEMBERS THE WHOLE OF THE PROFIT AND GAINS OF BUSINESS ATTRIBUTABLE TO SUCH ACTIVITIES SHALL BE A LLOWED AS DEDUCTION AND HE ALLOWED THIS DEDUCTION IN RESPECT OF THIS AMOUNT OF RS. 31,16,440/-. HOWEVER ASSESSEE ALSO EARNED INTEREST OF RS. 22,81, 357/- ON BANK DEPOSITS WHICH WAS DISALLOWED BY HIM, HOLDING THAT ONLY INTEREST WHICH IS RECEIVED BY THE CREDIT CO-OPERATIVE SOCIETY ON LOAN S ADVANCED TO ITS MEMBERS WAS ELIGIBLE FOR DEDUCTION U/S. 80P(2)(A)(I ). LD. CIT(A) PLACING RELIANCE ON THE DECISION OF HONBLE SUPREME COURT O N SIMILAR FACTS IN THE CASE OF TOTGARS CO-OPERATIVE SALE SOCIETY LTD VS. ITO (2010) TAXMAN 282 CONFIRMED THIS ADDITION OF RS. 22,81,357/- MADE BY AO HOLDING THAT INCOME COMES IN THE CATEGORY OF INCOME FROM OTHER SOURCES AND THEREFORE SUCH INTEREST INCOME HAS RIGHTLY BEEN TAXED BY THE AO U/ S. 56 OF THE ACT. WE UPHELD THIS ORDER OF LD. CIT(A) AND DID NOT TAKE CO GNIZANCE OF CO-ORDINATE BENCHS DECISION IN THE CASE OF M/S JAFRI MOMIN VIK AS CO-OP CREDIT SOCIETY LTD WHEREIN HONBLE TRIBUNAL ON VERIFICATIO N OF BALANCE-SHEET OF THE M.A. NO.46/AHD/2014 (IN ITA NO.2797/AHD/2012) A. Y. 2006-10 PAGE MAFATLAL INDUSTRIES LTDS EMPLOYEES CO-OPERATIVE CR EDIT SOCIETY VS. ITO 3 ASSESSEE ON 31-03-2009 OBSERVED THAT THE FIXED DEPO SITS MADE WERE TO MAINTAIN LIQUIDITY AND THAT THERE WAS NO SURPLUS FU ND WITH THE ASSESSEE AS ATTRIBUTED BY THE REVENUE AND HOLDING THAT ENTIRE F UNDS WERE UTILIZED FOR THE PURPOSE OF BUSINESS, DEDUCTION OF INTEREST ON FIXED DEPOSITS WAS GRANTED U/S. 80P(2)(A)(I) OF THE ACT. SINCE SUCH WAS NOT EV EN THE SUBMISSION OF THE ASSESSEE EITHER BEFORE US OR BEFORE THE LOWER AUTHO RITIES, THE CO-ORDINATE BENCHS DECISION WAS NOT APPLICABLE TO THE FACTS OF THIS CASE. IN VIEW OF THE ABOVE, MA FILED BY THE ASSESSEE IS H EREBY DISMISSED. 3. IN THE RESULT, MA FILED BY THE ASSESSEE IS DISMI SSED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE SD/- SD/- (ANIL CHATURVEDI) ( D.K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 27/06/2014 AK / COPY OF ORDER FORWARDED TO:- 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,