Calcutta High Court
Commissioner Of Income Tax-X vs South Eastern Railway Employees ... on 22 July, 2010
Author: Kalyan Jyoti Sengupta
Bench: Kalyan Jyoti Sengupta
ITAT No. 135 OF 2010
GA No.1838 of 2010
IN THE HIGH COURT AT CALCUTTA
SPECIAL JURISDICTION (INCOME TAX)
ORIGINAL SIDE
COMMISSIONER OF INCOME TAX-X, KOLKATA
Versus
SOUTH EASTERN RAILWAY EMPLOYEES CO-OPERATIVE CREDIT SOCIETY
BEFORE:
The Hon'ble JUSTICE KALYAN JYOTI SENGUPTA
The Hon'ble JUSTICE KANCHAN CHAKRABORTY Date : 22nd July, 2010.
The Court:- At the outset it is placed on record that the earlier xerox certified copy which was highlighted in green ink by the department has been replaced by a fresh xerox certified copy. The department concerned must be careful in future while accepting the memorandum of appeal as it was found in this case that the earlier xerox certified copy was not a virgin one. However, the name of the officer who has supplied the earlier xerox certified copy has not been divulged before this Court. In any view of the matter we should not detain ourselves to deal with this matter on this minor issue.
It appears in this matter the Revenue wants us to admit the appeal on the points as formulated hereinbelow;-
i) Whether on the facts and circumstances of the case, the interest earned by the assessee to the tune of Rs.1,18,07,645/- out of its investment in banks is not the activity that arose from the 2 activity of providing loan and credit facilities to its members as the society is not engaged in the business of banking and is therefore not qualifying for deduction u/s.80P(2a)(a)(i) of the Act, the learned Tribunal is correct in law in holding that interest earned on such investment is within the purview of section 80P of the Act ?
We have gone through the impugned judgment and order of the Learned Tribunal. It appears that the point involved is whether interest earned out of the investment earned by the assessee cooperative can be treated to be the income arising out of business activity or from other sources in order to apply the provision of Section 80P(2)(a)(i) of the I.T. Act. It is an undisputed factual position that similar issue arose before the Commissioner of Income Tax (Appeal) in relation to the assessment year 1998-99 to 2002-2003 as also for the assessment year 1995-96 and 1996-97. Then again in relation to the assessment years 2003-04 and 2004-05 a similar point arose. The Learned Tribunal in relation to the assessment years 1998-99 to 2002-03 by order dated 10.11.2006 in ITA Nos.840 to 844/Kol/2006 and again by order dated 29.12.2006 in relation to assessment years 2003-04 and 2004-05 has deleted the disallowance made in those assessment years and it was held that the interest earned by the assessee cooperative society from its short term and fixed deposits with the banks and other institutions were disallowed on the ground that this income was not business profit of the assessee society but was income from other sources. The Ld. Tribunal has also has held that income from investment in banks and other financial institutions is the business income of the assessee society and it is eligible to get deduction under Section 80P(2)(a)(i). The Tribunal has overruled the decisions rendered against the assessee in relation to assessment years 1995-96 and 1996-97 on the same issue in relation to subsequent years.
It was found by the Tribunal while affirming the order of the Commissioner of Income Tax (Appeal) that there is no change in the facts and circumstances of this case and it was held that the assessee was eligible for deduction under Section 80P(2)(a)(i) on interest on investment amounting to Rs.1,18,07,645/- in 3 this assessment year also. Since the Tribunal found that this decision of the Tribunal was followed by CIT (A) there is no reason to take a different view.
Under these circumstances, we feel that when the Commissioner of Income Tax (A) as well as the Tribunal has followed the earlier unchallenged decision no question of law is involved in this matter. Nothing has been produced before us to show subsequent decision of the Tribunal in relation to the assessment years 1998-99 to 2002-03 and 2003-04 have been challenged by any of the parties before this Court.
It is submitted by Mr. Bhowmick that there has been challenge of the decision in relation to assessment years 1995-96, 1996-97 and the same is pending before this Court we think that challenge of the assessee has now become redundant as the earlier view taken in both the assessment years have been reversed by the Tribunal by its subsequent decision. Hence, the pendency of that earlier matter is of no consequence in this matter. Had there been a challenge of the decision of the Tribunal in relation to the assessment years 1998-99 to 2002-03 and also 2003-04 to 2004-05 the matter would have been different. The revenue did not take any step whatsoever. Therefore, we presume the revenue has accepted the subsequent view of the Tribunal and the same now hold the field right now.
The appeal is dismissed accordingly.
Certified photostat copy of this order be made available to the parties, if applied for, on completion of usual formalities.
(KALYAN JYOTI SENGUPTA, J.) (KANCHAN CHAKRABORTY, J.) GH.