Jafari Momin Vikas Co-op. Credit Co.op.society Ltd. Patan

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IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD “B” BENCH AHMEDABAD

Before Shri G.C.Gupta , Vice President and
Shri T.R. Meena, Accountant Member

ITA Nos. 2665, 2666 & 2667/Ahd/2012
Assessment YearS :2007-08, 08-09 & 09-
10 (Respectively)

ACIT, V/s . The Jafri Momin Vikas Credit
B.K. Circle, Palanpur Co.Op. Society Ltd., Station
Road, Near Masjid, Palanpur.
PAN No. AA EFJ2304G
(Appellant) .. (Respondent)

Shri Y. P. Verma, Sr. D.R.
By Appellant
/By Respondent Shri Mukesh M. Patel, A.R.

/Date of Hearing
22.01.2013
/Date of Pronouncement 01.03.2013

O R D E R

PER : T.R.Meena, Accountant Member

These are three appeals at the behest of Revenue which have

emanated from the orders of CIT(A)-XX, Ahmedabad, dated 21.09.2012 for all

three assessment years. All three appeals were heard together and are being

disposed of by way of this common order for the sake of convenience. The

sole ground of appeal is against deleting the disallowance of Rs. 21,76,526/-

for A.Y. 07-08, Rs.18,23,372/- for A.Y. 08-09 & Rs.21,98,927/- for A.Y. 09-10

made u/s. 80P(2)(a)(i) of the Act.
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ITA Nos. 2665, 2666 & 2667/Ahd/2012
A.Ys. 07-08, 08-09 & 09-10 Page 2

2. The appellant is a society is carrying out business of Banking and

claimed deduction u/s. 80P(2) of the Act. The A.O. observed that Section

2(24) of the Act has been amended w.e.f. 1.4.2007, which reads as under:

?(viia) the profit and gain of any business of banking (including

providing credit facility) carried on by co-operative society with its

members.?

Further, sub-section (4) of 80P inserted with effect from 1.4.2007 reads as

under:

?(4) the provision of this section shall not apply in relation to any

co-operative bank other than A primary Agricultural Credit society, or

A primary co-operative Agricultural and Rural Development bank.?

After analyzing both the Sections, the ld. A.O. found that the appellant is not a

co-operative society neither a primary Agricultural Credit Society nor a primary

Co-operative Agricultural and Rural Development Bank. The clarification

issued by the CBDT is also not applicable in case of assessee. As per A.O.,

the amended provision is applicable on the appellant and income earned by

the Co-operative Credit Society is not exempt under the provisions of Section

80P(2)(a)(i) of the Act, but covers u/s. 80P(4) of the IT Act. Thus, he denied

the deduction u/s. 80P(2)(a)(i) of the Act in all the years.

3. The assessee carried the matter before the ld. CIT(A), who had partly

allowed the appeal after considering the detailed reply of the appellant and

also CBDT clarification vide letter dated 09.05.2007 in F.No. 133/06/2007-TPL

issued. He also considered respected Bangalore ?B? Bench decision in case

of ACIT vs. Bangalore Commercial Transport Credit Co-operative Society Ltd.

in ITA No. 1069/Bang/2010 for A.Y. 2007-08, dated 08.04.2011, wherein the
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ITA Nos. 2665, 2666 & 2667/Ahd/2012
A.Ys. 07-08, 08-09 & 09-10 Page 3

difference between the ?Co-operative Bank? and ?Co-operative Society? has

been discussed in detail. He also relied in case of Dy.CIT, Central Circle,

Panaji, Goa vs. Jayalakshmi Mahila Vividodeshagala Souharda Sahakari Ltd.

(137 ITD 163), ITO, Ward-1(4) Vs. Jankalyan Nagri Sahakari Past Sanstha

Ltd. (24 Taxman 127), ITAT, Pune Bench & Jafari Momin Vikash Co-op.

Credit Society Ltd. vs. CIT, Ahmadabad Tribunal, order dated 20.06.2012 in

ITA No. 902/Ahd/2012. Ld. CIT(A) has held as under:

?Keeping in view the above mentioned CBDT?s circular,

clarification and the case-laws, AO?s finding that in view of the

amendments made in Section 2(24) and 80P, appellant is not

eligible for deduction u/s.80P is not in accordance with law. In view

of the amendment to Sec.2(24), the profits and gains of the

appellant are its income. However, since the appellant is not

covered by Section 80P(4), it is entitled to the deduction u/s. 80P(2).

The disallowance is deleted. AO is directed to allow the deduction in

accordance with the said section.?

However, Hon?ble Supreme Court decision in case of Totgars Co-operative

Sale Society Ltd. vs. ITO (322 ITR 283) (2010), wherein the interest income

on short term deposits and in Government securities is to be treated as

income from other sources. Thus, the CIT(A) allowed the appeal partly.

4. Now the Revenue is before us. Ld. Sr. D.R. relied upon the order of the

A.O., however, ld. Counsel for the appellant relied on the order of the CBDT

Circular as well as various case laws cited by the appellant before the CIT(A)

and requested to confirm the order of the CIT(A).

5. We have heard the rival contentions and perused the material on

record. The ld. CIT(A) has verified the nature of activity and held that the
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ITA Nos. 2665, 2666 & 2667/Ahd/2012
A.Ys. 07-08, 08-09 & 09-10 Page 4

assessee company is a co-operative society not in banking business. The

provisions of Section 80P(4) will not have any application in the assessee?s

case. Therefore, it is entitled to deduction u/s. 80P(2)(a)(i) of the Act. Thus,

we confirm the order of the CIT(A).

6. In the combined result, the Revenue?s appeals are dismissed in all

assessment years.

These Orders pronounced in open Court on 01.03.2013

Sd/- Sd/-
(G.C.Gupta) (T.R. Meena)
Vice President Accountant Member
True Copy
S.K.Sinha
/ Copy of Order Forwarded to:-
1. / Appellant
2. / Respondent
3. / Concerned CIT
4. – / CIT (A)
5. , , / DR, ITAT, Ahmedabad
6. / Guard file.
By order/ ,

/
,

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