Income Tax Appellate Tribunal - Hyderabad
The A.P. Mahesh Co-Operative Urban Bank ... vs Dcit, Cir-2(3), Hyd, Hyderabad on 30 December, 2016
THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH "B", HYDERABAD
BEFORE SMT P. MADHAVI DEVI, JUDICIAL MEMBER
AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER
ITA No. 474/Hyd/2016
Assessment Year: 2011-12
The AP Mahesh Co- vs. DCIT, Cir-2(3),
operative Urban Bank Ltd, Hyderabad
Hyderabad
PAN - AABAT4652K
(Appellant) (Respondent)
Assessee by : Shri B. Satyanarayana Murty
Revenue by : Shri K.J. Rao
Date of hearing : 20-12-2016
Date of pronouncement : 30-12-2016
ORDER
PER P. MADHAVI DEVI, J.M.:
This is the assessee's appeal for the A.Y. 2011-12, against the order of the CIT(A)-IV, Hyderabad, dated 19-0- 2016. In this appeal, the assessee is aggrieved by the order of the CIT(A), and has raised the following grounds of appeal:
"1. The Order of the Hon'ble commissioner of Income Tax in so far it is against the appellant-bank, is contrary to the f acts of the case and the provisions of law.
2. The Hon'ble commissioner of Income Tax is not justif ied in sustaining the disallowance of the amount of Rs.13,93,564/- being the contribution to the Education Fund as required by the co-operative Societies Act. The order of the Hon'ble Commissioner of Income Tax should have seen that the amount contributed was unconditionally appropriated to the National co- operative Union and therefore it is expenditure in the hands of the appellant-bank and is rightly allowable as a deduction in the computation of its Income.
3. The Hon'ble Commissioner of Income Tax should have appreciated that the appellant-bank has remitted 2 ITA No. 474/Hyd/2016 The AP Mahe sh CIT(A)-operative Urban Bank L td, Hyde rabad unconditionally this amount af ter approval of the accounts in the Annual General Meeting.
4. The Hon'ble commissioner of Income Tax should have seen that the contribution of Rs.13,93,564/- is an outf low and expenditure in the hands of the bank and is to be used for purpose of educational development being carried out by the National Co-operative Union, New Delhi.
5. The Hon'ble commissioner of Income Tax (Appeals), Hyderabad erred in equating this amount to the Reserve Funds and other transfers from the net prof it from the bank.
6. The Hon'ble Commissioner of Income Tax (Appeals) should have appreciated that this amount is a charge on the Net Prof its of the bank and therefore rightly allowable as deduction.
7. The Hon'ble Commissioner of Income Tax (Appeals) should have seen that the case law· referred to by him to support his decision on this matter is not applicable to the f acts in this case.
8. The Hon'ble Commissioner of Income Tax (Appeals) should have seen that the national Co-operative Union, New Delhi, has overriding title on the amount contributed by the appellant-bank and that the bank ceases to have any control on the amounts so remitted to the National Co-operative Union, New Delhi. Therefore, it is rightly allowable as a deduction in the Computation of its Income.
9. The Hon'ble Commissioner of Income Tax (Appeals) should have alternatively allowed the deduction in respect of the provision made for education fund in the accounts for the year under consideration.
For these and other grounds that may be urged at the time of hearing of the appeal, it is submitted that the order of the learned Assessing Off icer be set aside or modif ied may be deemed f it.
3. At the time of hearing, the Ld. counsel for the assessee submitted that this issue has arisen in the assessee's own case for the earlier assessment year A.Y. 2010-2011 in ITA No. 1580/Hyd/2013 and vide its order dated 31-10-2014, the Tribunal has dismissed the assessee's appeal. A copy of the said order is placed before us. On perusal of the same, we find that the tribunal has dismissed the assessee's appeal on two grounds that the amount of claim made during the financial year is not out of the income of the that year itself but it was out of the 3 ITA No. 474/Hyd/2016 The AP Mahe sh CIT(A)-operative Urban Bank L td, Hyde rabad income of the earlier year and therefore, it cannot be allowed as the deduction of that year, as assessee is not claiming amount on accrual basis but has claimed on payment basis in the later year and (2) that there is no diversion of income by overriding title since the income reached the assessee before it reached the third party. Facts and circumstances for the year before us being the same, respectfully following the decision of the co-ordinate bench in the assessee's own case for the earlier A.Y, the assessee's appeal is dismissed.
4. In the result, the assessee's appeal is dismissed Pronounced in the open court on 30th December, 2016.
Sd/- Sd/-
(B. RAMAKOTAIAH) (P. MADHAVI DEVI)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Hyderabad, Dated: 30 th December, 2016
KRK
1) The AP Mahesh Co Urban Bank ltd, Hyd C/o C/o Venugopal & Chenoy, CA's, Door No. 4-1- 889/16/2, Tilak Road, Hyderabad-01
2) DCIT, Cir-2(3), Hyd
3) CIT -IV, Hyderabad
4) PCIT-4, Hyderabad
5) The Departmental Representative, I.T.A.T., Hyderabad.
6) Guard File