Calcutta High Court
Commissioner Of Income Tax Kol-Xvi vs M/S. Ramkrishnapur Co-Operative Bank ... on 15 July, 2009
Author: Subhro Kamal Mukherjee
Bench: Subhro Kamal Mukherjee
ITA No. 111 of 2009
IN THE HIGH COURT AT CALCUTTA
Ordinary Original Civil Jurisdiction
ORIGINAL SIDE
COMMISSIONER OF INCOME TAX KOL-XVI
Versus
M/S. RAMKRISHNAPUR CO-OPERATIVE BANK LTD.
For Appellant : Mr.Rupendra Nath Mitra, senior advocate with Mr.Prithu
Dhudoria, advocate
For Respondent: Mrs. Sutapa Roychowdhury, advocate.
BEFORE:
The Hon'ble JUSTICE SUBHRO KAMAL MUKHERJEE The Hon'ble JUSTICE SANKAR PRASAD MITRA Date : 15th July, 2009.
The Court: This is an appeal against a judgment and order dated September 19, 2008 passed by the Income Tax Appellate Tribunal 'A' Bench, Kolkata in ITA Nos.1415 and 1418/Kol./2008 pertaining to the assessment years 2003-04 and 2004-05.
The assessee is Ramkrishnapur Co-operative Bank Limited. Admittedly, the assessee, a co-operative society, is carrying on the business of banking and providing credit facilities to its customers. The assessee invested certain sums, out of the surplus funds available out of the working capital including voluntary reserves, in various government securities and with the banks. Such investments are integral part of normal 2 banking activities and, therefore, the assessee claimed deduction in respect of such income under Section 80P(2)(a)(i) of the Income Tax Act, 1961 [hereinafter referred to as the "said Act"]. The assessee had shown Rs.14,59,742/- as expenses by the assessee. The assessing officer, however, disallowed 10% per cent. of such expenses. The assessing officer, also, added Rs.2,86,260/-, shown by the assessee, as liability in the suspense account, by treating the same as unexplained income of the assessee under Section 68 of the said Act.
The tribunal affirmed the order of the assessing officer, upsetting the order of the Commissioner of Income Tax in Appeal, by holding that the assessing officer was justified in making disallowance of 10% per cent. of the expenses claimed by the assessee for the assessment year 2003-
04.
Mrs. Roychowdhury, learned advocate for the respondent- assessee, submits that the assessee has accepted the order of the tribunal and has not challenged the same by filing an appeal.
Therefore, we are not concerned in this appeal with regard to the order of the tribunal in so far as it relates to upholding the order of the assessing officer in making the disallowance of 10% per cent. of the expenses amounting to Rs.1,45,000/- for the assessment year 2003-04.
We have considered the provisions of Section 80P(2)(a)(i) of the said Act. The assessee being a co-operative society carrying on the business of banking and providing credit facilities to its customers, the gross total income should be deducted in computing the total income of the assessee. The interest and dividend income derived out of government investments and short term fixed deposits in bank are, also, entitled to deduction.
The point is no longer res judicata. A Division Bench of the Karnataka High Court in the case of Commissioner of Income Tax and another 3 vs. Sri Ram Sahakari Bank Limited, reported in 226 Income Tax Report 632, inter alia, held that interest and dividend income derived out of investment are entitled to deduction.
The assessing officer added Rs.2,86,260/- as unexplained cash credit under Section 68 of the said Act. But, the assessee had shown Rs.2,86,260/- as liability in suspense account. Such liability in suspense account was shown by the assessee in the normal course of its business as the amount could not be properly identified.
The tribunal, in our view, rightly held that the aforementioned amount could not be treated as unexplained cash credit in the hands of the assessee inasmuch as in the daily business of the banking transactions there are number of entries, which could not be properly tallied due to various mistakes, and, therefore, was shown in the suspense account. The views, adopted by the tribunal, are quite reasonable and based on sound legal principles. We do not find any reason to take a different view in this matter.
We are of the considered opinion that this appeal involves no substantial question of law. Therefore, this appeal is dismissed summarily.
In view of the dismissal of the appeal, the connected application also stands dismissed.
We make no order as to costs.
All parties concerned are to act on a signed xerox copy of this order on the usual undertakings.
(SUBHRO KAMAL MUKHERJEE, J.) (SANKAR PRASAD MITRA, J.) sm AR[CR]