Income Tax Appellate Tribunal - Jaipur
Deputy Commissioner Of Income Tax, ... vs M/S Jaipur Zila Dugdh Utpadak Sahkari ... on 21 January, 2021
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES 'B' JAIPUR
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BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SINGH YADAV, AM
M.A. Nos. 63, 64 & 65/JP/2020
(Arising out of ITA Nos. 187, 22, 633, 512, 634 & 513/JP/2019 )
fu/kZkj.k o"kZ@Assessment Years : 2014-15, 2011-12 & 2012-13
DCIT, cuke M/s Jaipur Zila Dugdh Utpadak
Circle-06, Vs. Sahkari Sangh Ltd., Jaipur
Jaipur Near Gandhi Nagar Railway
Station, Jaipur
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAAAJ0767G
vihykFkhZ@Appellant izR;FkhZ@Respondent
jktLo dh vksj ls@ Revenue by : Smt. Runi Pal (Addl. CIT)
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s Assessee by : Sh. P. C. Parwal (CA)
lquokbZ dh rkjh[k@ Date of Hearing : 04/12/2020
mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 21/01/2021
vkns'k@ ORDER
PER: VIKRAM SINGH YADAV, A.M. The present miscellaneous applications have been filed by the Revenue against the consolidated order passed by the Tribunal in ITA No. 633/JP/19 & 512/JP/19 for A.Y 2011-12 and 634/JP/19 & 513/JP/2019 dated 02.09.2019 and subsequent order passed by the Tribunal in ITA Nos. 187/JP/19 & 22/JP/19 dated 30.09.2019 for A.Y 2014-15.
MA No. 64/JP/2020 for A.Y 2011-12 2 M.A. Nos. 63, 64 & 65/JP/2020 DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur
2. In this regard, the ld. DR submitted that the department has filed appeal before the Tribunal containing grounds of appeal (ITA. No. 633/JP/2019 for A.Y 2011-12) as under:-
"Whether in the facts and circumstances of the case and in law, the CIT(A) is correct in holding that the income received from investments made with Jaipur Central Co-operative Bank is eligible for deduction u/s 80-P(2)(d) of the I.T Act, 1961 and thereby justified in allowing relief of Rs. 1,49,40,834/-."
3. It was submitted that the Tribunal has passed order dated 02.09.2019 in ITA No.512/JP/2019 (Assessee's appeal) and 633/JP/2019 (Department appeal) for A.Y. 2011-12 in the case of M/s. Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd., Jaipur, which was received in the office of Pr. CIT-2, Jaipur on 25.10.2019. The Tribunal while deciding the grounds of the appeal filed by the department, in para 14 of the order, has decided the issue in the combined order for AY 2011-12 and 2012-13 by holding as under:-
"In the instant case for the purposes of section of the Act, Jaipur Central Cooperative Bank Ltd shall be treated as a co- operative society. Therefore, interest on FDRs placed by the assessee society with such cooperative society shall be eligible for deduction u/s 80P(2)(d) of the Act."
4. It was further submitted that in assessee's own case for A.Y. 2016-17 (ITA No. 1243/JP/2019 dated 4.03.2020), the Tribunal has set aside the issue of calculating interest u/s 80P(2)(d) to the CIT(A) stating that it needs to be determined whether the assessee has 3 M.A. Nos. 63, 64 & 65/JP/2020 DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur incurred any interest expenditure in earning the interest income. The Tribunal in this case stated as under:
"14. The legal proposition thus laid down by the Hon'ble High Court is that the income exempted under section 80P(2) has to be arrived at separately in order to determine the income under section 80P(2) and it can never be envisaged that the total income which has been so received could be allowed without deducting the expenditure incurred in earning the income. In light of the same, the deduction u/s 80P(2)(d) can be allowed only on the net receipt after deducting the expenditure incurred for earning exempt income. Therefore, in the instance case, it needs to be determined whether the assessee has incurred any interest expenditure in earning the interest income."
5. It was submitted that as the Tribunal has now established in assessee's own case for A.Y. 2016-17 (ITA No. 1243/JP/2019) that the deduction u/s 80P(2)(d) can be allowed only on the net receipt after deducting the expenditure incurred for earning exempt income. This issue has not been adjudicated upon by the Tribunal in its decision in this instant case for AY 2011-12, it is requested that the same may be taken up under section 254(2) of the I.T. Act, 1961 for adjudication by recalling and modifying the order dated 02.09.2019 in the case of DCIT, Circle-6, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd., Jaipur, in ITA No.512/JP/19 (Assessee's appeal) and 633/JP/2019(Department appeal) for A.Y. 2011-12.
4 M.A. Nos. 63, 64 & 65/JP/2020DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur MA No. 65/JP/2020 for A.Y 2012-13
6. In this regard, the ld. DR submitted that similar ground of appeal had been taken by the department in this appeal filed before the Tribunal (ITA. No. 634/JP/2019 for A.Y 2012-13) as under:-
"Whether in the facts and circumstances of the case and in law, the CIT(A) is correct in holding that the income received from investments made with Jaipur Central Co-operative Bank is eligible for deduction u/s 80-P(2)(d) of the 1.T Act, 1961 and thereby justified in allowing relief of Rs. 1,59,92,544/-."
7. The Tribunal had passed order dated 02.09.2019 in ITA No.513/JP/2019 (Assessee's appeal) and 634/JP/2019 (Department appeal) for A.Y. 2011-12 in the case of M/s. Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd., Jaipur, which was received in the office of Pr. CIT- 2, Jaipur on 25.10.2019. The Tribunal while deciding the grounds of the appeal filed by the department, in para 14 of the order, has decided the issue in the combined order for AY 2011-12 and 2012-13 by holding as under:-
"In the instant case for the purposes of section of the Act, Jaipur Central Cooperative Bank Ltd shall be treated as a co-operative society. Therefore, interest on FDRs placed by the assessee society with such cooperative society shall be eligible for deduction u/s 80P(2)(d) of the Act."
8. On the other hand, in assessee's own case for A.Y. 2016-17 (ITA No. 1243/JP/2019) the Tribunal has set aside the issue of calculating 5 M.A. Nos. 63, 64 & 65/JP/2020 DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur interest u/s 80P(2)(d) to the CIT(A) stating that it needs to be determined whether the assessee has incurred any interest expenditure in earning the interest income. The Tribunal in this case stated that:
"14. The legal proposition thus laid down by the Hon'ble High Court is that the income exempted under section 80P(2) has to be arrived at separately in order to determine the income under section 80P(2) and it can never be envisaged that the total income which has been so received could be allowed without deducting the expenditure incurred in earning the income. In light of the same, the deduction u/s 80P(2)(d) can be allowed only on the net receipt after deducting the expenditure incurred for earning exempt income. Therefore, in the instance case, it needs to be determined whether the assessee has incurred any interest expenditure in earning the interest income."
9. In view of the above, it was submitted that as the Tribunal has now established in assessee's own case for A.Y. 2016-17 (ITA No. 1243/JP/2019) that the deduction u/s 80P(2)(d) can be allowed only on the net receipt after deducting the expenditure incurred for earning exempt income. This issue has not been adjudicated upon by the Hon'ble Bench in its decision in this instant case for AY 2012-13, it is requested that the same may be taken up under section 254(2) of the I.T. Act, 1961 for adjudication by recalling and modifying the order dated 02.09.2019 in the case of DCIT, Circle-6, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd., Jaipur, in ITA No.513/JP/19 (Assessee's appeal) and 634/JP/2019(Department appeal) for A.Y. 2012-13.
6 M.A. Nos. 63, 64 & 65/JP/2020DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur MA No. 63/JP/2019 for A.Y 2014-15
10. In this regard, the ld. DR submitted the department filed appeal before the Tribunal containing grounds of appeal (ITA. No. 187/JP/2019 for A.Y 2014-15) as under:-
"Ground (1): Whether on the facts and in circumstances of the case and in law the ld. CIT(A) was justified in deleting the addition of Rs. 1,43,24,928/- made by the AO in disallowing contribution made to Sparsh Trust without appreciating the fact that assessee failed to prove direct business nexus and it is not an allowable expenditure u/s 37(1).
Ground (2): Whether in the facts and circumstances of the case and in law the ld. CIT(A) is correct in holding that the income received from investments made with Jaipur Central Cooperative Bank is eligible for deduction u/s 80P(2)(d) of the IT Act, 1961 and thereby justified in allowing relief of Rs. 2,76,34,807/-."
11. The Tribunal has passed order dated 02.09.2019 in ITA No. 22/JP/20 (Assessee's appeal) and 187/JP/2019(Department appeal) for A.Y. 2014-15 in the case of M/s. Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd., Jaipur, which was received in the office of Pr. CIT-2, Jaipur on 25.10.2019. The Tribunal while deciding the grounds of the appeal filed by the department, have decided the issue following the combined order of the Coordinate bench for AY 2011-12 and 2012-13 also wherein it was held that for the purposes of section 80P(2)(d) of the Act, Jaipur Central Cooperative Bank Ltd shall be treated as a co- operative society. Therefore, interest on FDRs placed by the assessee 7 M.A. Nos. 63, 64 & 65/JP/2020 DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur society with such cooperative society shall be eligible for deduction u/s 80P(2)(d) of the Act. It further held that :-
" We thus in the backdrop of our aforesaid observations are unable to persuade ourselves to be in agreement with the view taken by the lower authorities that the assessee would not be entitled for claim of deduction under Sec. 80P(2)(d), in respect of the interest income on the investments made with the co- operative bank. We thus set aside the order of the lower authorities and conclude that the interest income of Rs. 27,48,553/-earned by the assessee on the investments held with the co-operative bank would be entitled for claim of deduction under Sec. 80P(2)(d).
17. In light of above, by virtue of provisions of Section 80P(4) of the Act, the claim of the assessee under section 80(P)(2)(d) cannot be denied to the assessee society.
18. Another issue that arise for consideration is whether deduction u/s 80P(2)(d) shall be allowed on the gross interest income on FDRs or it should be allowed on the net interest income calculated after deducting the interest expenditure allocable to funds placed in form of FDR. Though the assessee has challenged the findings of the ld CIT(A) to the effect that it has not incurred any interest expenditure, we find that there is no necessity to examine the same as conceptually, the deduction under section 80P(2)(d) has to be allowed on gross and not on net interest income as held by the Hon'ble Gujarat 8 M.A. Nos. 63, 64 & 65/JP/2020 DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur High Court in case of Surat Vankar Sahakari Sangh Ltd vs ACIT [2016] 72 Taxmann.com 169 (Guj)"
12. It was submitted that in assessee's own case for A.Y. 2016-17 (ITA No. 1243/JP/2019) the Tribunal has set aside the issue of calculating interest u/s 80P(2)(d) to the CIT(A) stating that it needs to be determined whether the assessee has incurred any interest expenditure in earning the interest income. The Tribunal in this case stated that:
"14. The legal proposition thus laid down by the Hon'ble High Court is that the income exempted under section 80P(2) has to be arrived at separately in order to determine the income under section 80P(2) and it can never be envisaged that the total income which has been so received could be allowed without deducting the expenditure incurred in earning the income. In light of the same, the deduction u/s 80P(2)(d) can be allowed only on the net receipt after deducting the expenditure incurred for earning exempt income. Therefore, in the instance case, it needs to be determined whether the assessee has incurred any interest expenditure in earning the interest income."
13. In view of the above, as the Tribunal has now established in assessee's own case for A.Y. 2016-17 (ITA No. 1243/JP/2019) that the deduction u/s 80P(2)(d) can be allowed only on the net receipt after deducting the expenditure incurred for earning exempt income. This issue has not been adjudicated upon by the Honble Bench in its decision in this instant case for AY 2014-15, it is requested that the same may be taken up under section 254(2) of the I.T. Act, 1961 for 9 M.A. Nos. 63, 64 & 65/JP/2020 DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur adjudication by recalling and modifying the order dated 02.09.2019 in the case of DCIT, Circle-6, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd., Jaipur, in ITA No.22/JP/20 (Assessee's appeal) and 187/JP/2019(Department appeal) for A.Y. 2014-15.
14. We now refer to the contentions advanced by the ld AR. In this regard, the ld. AR submitted that the Tribunal has decided the cross appeal filed by the department and the assessee for AY 2011-12 & 2012- 13 vide order dt. 02.09.19 and for AY 2014-15 vide order dt. 30.09.2019 whereby the appeal of the assessee was allowed and appeal of the department was dismissed. Against the dismissal of departmental appeal, present misc. application has been filed. It may be noted that the department has filed appeal before ITAT for these years by taking the following Grounds of Appeal:
Asstt. Year 2011-12:
"Whether in the facts & circumstances of the case and in law, the CIT(A) is correct in holding that the income received from investment made with Jaipur Central Co-Operative Bank is eligible for deduction u/s 80P(2)(d) of the Income tax Act, 1961 and thereby justified in allowing relief of Rs. 1,49,40,834/-"
Asstt. Year 2012-13 "Whether in the facts & circumstances of the case and in law, the CIT(A) is correct in holding that the income received from investment made with Jaipur Central Co-Operative Bank is eligible for deduction u/s 80P(2)(d) of the Income tax Act, 1961 and thereby justified in allowing relief of Rs. 1,59,92,544/-"
Asstt. Year 2014-15 "Whether in the facts & circumstances of the case and in law, the CIT(A) is correct in holding that the income received from 10 M.A. Nos. 63, 64 & 65/JP/2020 DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur investment made with Jaipur Central Co-Operative Bank is eligible for deduction u/s 80P(2)(d) of the Income tax Act, 1961 and thereby justified in allowing relief of Rs. 2,76,34,807/-"
15. It was submitted that the Tribunal while deciding the department appeals in para 14 page 19 of the order dt. 02.09.19 for AY 2011-12 & 2012-13 held that for the purpose of 80P(2)(d) of the Act, Jaipur Central Co-operative Bank Ltd. shall be treated as a co-operative society. Therefore, interest on FDR's placed by the assessee society with such co- operative society shall be eligible for deduction u/s 80P(2)(d) of the Act. Accordingly, the appeal of revenue is dismissed. Thereafter, while deciding the appeal of Revenue for AY 2014-15 vide order dt. 30.09.2019 it took note of the decision of Rajasthan High Court in case of CIT Vs. Rajasthan Rajya Sahkari Upbhogta Sangh Ltd. 84 Taxman 33 in Para 2.6, Pg 15 of the order and thereafter in Para 2.7 by referring to the above decision of Rajasthan High Court, followed the decision of coordinate bench vide order dt. 02.08.2019 (supra) and dismissed the appeal of department.
16. It may be noted that Ld. CIT(A) while holding that assessee is eligible for deduction u/s 80(2)(d) in respect of interest received on FDR with Jaipru Central Co-operative Bank has held that interest expenditure to certain extent is attributable to the interest income earned on FDR's maintained with Jaipur Central Co-operative Bank and therefore deduction u/s 80P(2)(d) was disallowed to this extent. Against this finding of the CIT(A), assessee filed an appeal before the Tribunal which was allowed in favour of the assessee.
11 M.A. Nos. 63, 64 & 65/JP/2020DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur
17. For AY 2016-17, the Tribunal vide order dt. 04.03.2020 while deciding the assessee's appeal at Para 13 observed that whether deduction u/s 80P(2)(d) should be allowed on gross interest income on FDR or net interest income calculated after deducting the interest expenditure, it has relied on the decision of Hon'ble Gujarat High Court in earlier years but the decision of Rajasthan High Court which has been brought to its notice by Ld. CIT was not considered and this being the decision of jurisdictional High Court the same is binding on the Tribunal. Accordingly, in Para 14 it held that deduction u/s 80P(2)(d) can be allowed only on the net receipt after deducting the expenditure and according set aside this issue to the file of Ld. CIT(A) to examine the same afresh.
18. Now the department has filed an Misc. Application stating that in AY 2016-17, the Tribunal has set aside the issue of calculating of eligible deduction of interest u/s 80P(2)(d) to the society by referring para 14 of the order dt. 04.03.2020 in ITA No. 1243/JP/2019 (Departmental Appeal) where it was held that deduction can be allowed only on the net receipt after deducting the expenditure incurred for earning exempt interest income but the same is not adjudicated upon by the Tribunal for AY 2011-12, 2012-13 & 2014-15 and thus there is mistake apparent on record.
19. In this regard, it was submitted that the issue raised in the Misc. Application filed by the department is not arising from the ground taken by it before the Tribunal in as much as department has filed the appeal challenging the finding of CIT(A) that the assessee is eligible to claim deduction u/s 80P(2)(d) on the income received from investment made 12 M.A. Nos. 63, 64 & 65/JP/2020 DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur with Jaipur Central Co-operative Bank. The quantum of deduction allowed by CIT(A) was not disputed by the department. In fact the assessee has disputed the reduction in the quantum in deduction allowed by CIT(A). Therefore the Misc. Application by the department is not arising out of the ground of appeal taken by the department before the Tribunal and thus Misc. Application filed by the department has no locus- standi and infructuous.
20. Without prejudice to above, it was submitted that while deciding the appeal of the assessee on the quantum of deduction allowable u/s 80P(2)(d), Tribunal in AY 2011-12 & 2012-13 at para 18 pg 26 observed that whether deduction u/s 80P(2)(d) shall be allowed on gross interest income on FDR or on the net interest income calculated after deducting the interest expenditure allocable to the fund placed in form of FDR, there is no necessity to examine the same as conceptually, the deduction u/s 80P(2)(d) has to be allowed on gross and not on net interest income as held by Hon'ble Gujrat High Court in case of Surat Vankar Sahkari Samiti Ltd. Vs ACIT (2016) 72 Taxmann.com 169. Thereafter, the Tribunal while deciding the appeal for AY 2014-15 took note of the decision of Rajasthan High Court also while following its earlier decision. However while deciding the appeal for AY 2016-17 in ITA No. 1178/JP/2019 dt. 04.03.2020, Tribunal in para 13 by relying on the decision of Hon'ble Rajasthan High Court held in para 14 that deduction u/s 80P(2)(d) can be allowed only on the net receipt after deducting the expenditure incurred for earning exempt income. Thereafter in para 15, it was observed that though the assessee has claimed it has not incurred any interest expenditure in earning such interest income but the matter 13 M.A. Nos. 63, 64 & 65/JP/2020 DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur require further information & verification and therefore it is set aside to the file of CIT(A) to examine the afresh.
21. It was submitted that in AY 2011-12, 2012-13 & 2014-15, the Tribunal has allowed the appeal of assessee considering the later decision of Gujarat High Court dt. 12.07.2016. The decision of Hon'ble Rajasthan High Court dt. 12.01.1995 was not on record while deciding the appeal for AY 2011-12 & 2012-13 but while deciding the appeal for AY 2014-15 the said decision was also considered. Further in the later decision of Hon'ble Gujarat High Court, the earlier decision of Hon'ble Rajasthan High Court has been referred & considered. Thus when the Tribunal has relied on later decision of Hon'ble Gujarat High Court and in AY 2014-15 again relied on the same decision even after taking note of the decision of Rajasthan High Court and thereafter given a finding on the issue, the same cannot be considered as a mistake apparent on record solely for the reason that in AY 2016-17, the Tribunal has set aside the matter to CIT(A) on this issue.
22. Without prejudice to above, it was submitted that in AY 2011-12 & 2012-13, the assessee has also challenged the validity of the order passed by AO u/s 147 of the Act. However in para 20 of the order, it is observed since the revenue appeal is dismissed and the ground no. 2 of the assessee's cross appeal is allowed, legal ground raised by the assessee challenging the validity of the proceeding u/s 147 has become infructuous and is dismissed. Therefore, in case the Misc. Application of the department is allowed (though not arising from the ground of the department), the legal ground raised by the assessee be also recalled and decided independently.
14 M.A. Nos. 63, 64 & 65/JP/2020DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur
23. It was accordingly submitted that from the above facts on record, MA filed by the department on the ground that there is a mistake apparent on record is not maintainable and is only an application to the Tribunal for review of its decision which is not within the scope of section 254(2) of the Act. Reliance in this connection is placed on the following cases:-
• CIT Vs. Maruti Insurance Distribution Services Ltd. 2012 ITL 242 (Del.) (HC) • CIT Vs. ITAT & Ors. (2007) 293 ITR 118 (Del.) (HC) • Express Newspaper Ltd. Vs. DCIT (2010) 320 ITR 12 (Madras) (HC)
24. We have heard the rival contentions and purused the material available on record. For A.Y 2011-12 and A.Y 2012-13 (in ITA no. 512,513, 633 & 634/JP/2019 dated 2.09.2019), we refer to the relevant findings of the Tribunal which read as under:
"18. Another issue that arise for consideration is whether deduction u/s 80P(2)(d) shall be allowed on the gross interest income on FDRs or it should be allowed on the net interest income calculated after deducting the interest expenditure allocable to funds placed in form of FDR. Though the assessee has challenged the findings of the ld CIT(A) to the effect that it has not incurred any interest expenditure, we find that there is no necessity to examine the same as conceptually, the deduction under section 80P(2)(d) has to be allowed on gross and not on net interest income as held by the Hon'ble Gujarat High Court in case of Surat Vankar Sahakari Sangh Ltd vs ACIT [2016] 72 Taxmann.com 169 (Guj) wherein it was held as under:15 M.A. Nos. 63, 64 & 65/JP/2020
DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur "3. In all the four appeals, the common issue is grant of net deduction u/s 80P(2)(d) of the Act, in respect of interest and dividend received by the assessee from co-operative societies i.e. bank in this case. The Assessing Officer allowed deduction u/s 80P(2)(d) to the extent of net interest instead of gross interest as claimed by the assessee and disallowed the excess claim of deduction in this regard for all the years under consideration. The amount disallowed by the Assessing Officer and deduction granted by the Assessing Officer is tabularized and recorded as under:
Particular Assessment Years
1991-92 1992-93 1993-94 1994-95
Dividend - From co- op
9743 48000 3491 42674
societies
Interest (As shown in the
1022699 1214259 1220756 902765
return of income)
Deduction u/s 80P(2)(d) of
1027719 1045298 1223026 943736
the Act as per return
Disallowed by Assessing
477863 640219 641273 76116
Officer
Deduction granted u/s
80P(2)(d) of the Act by 549856 405079 581753 867618
Assessing Officer
8. We have considered the decisions cited by learned advocate for the assessee as well as the revenue. We feel that the decisions cited by the learned advocate for the assessee shall be applicable on the facts of the present case.
In the case of K. Nandakumar v. ITO [1993] 204 ITR 856/[1994] 72 Taxman 223 (Ker.), the Kerala High Court has held as under:
16 M.A. Nos. 63, 64 & 65/JP/2020DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur '4. The effect of Section 80AB is that, for the purpose of computing the deduction under Section 80L, the amount of income of that nature as computed in accordance with the provisions of the Act shall alone be deemed to be the amount of income of that nature. What the section means is that the net income by way of interest computed in the manner provided by the provisions of the Act shall alone be taken into account for computing the benefit. But it must be noted that payment of interest under a loan transaction incurred for the purpose of deriving income from business is not an item which arises in the computation of interest income "in accordance with the provisions" of the Act. The said amount has to be paid irrespective of whether any interest income is otherwise received or not. Though the interest is payable to the same bank, the fact remains that the amount of income by-way of interest is not calculated under the provisions of the Act with reference to such outgoings which fall under different heads. The assessee is entitled to deduction under Section 37 of all expenditure incurred for the purpose of deriving the business income, and it is under that head that the interest paid on the loan taken from the bank is deducted. The net amount of interest contemplated by Section 80AB should take in the net amount arrived at after meeting the expenses deductible from that item under the provisions of the Act as explained above. That is not the case here. Therefore, Section 80AB has no application to the facts of these cases. The interest paid on the loan transactions has to be deducted from the 17 M.A. Nos. 63, 64 & 65/JP/2020 DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur business income, and not from the interest received from the bank on the fixed deposits. The assessees were therefore right in the submissions which they made before the Commissioner of Income-tax in the revision petitions which they filed. This aspect of the matter has been overlooked by the Commissioner in passing the order, exhibit P-5.' 8.1 Similarly, in the case of Doaba Co-operative Sugar Mills Ltd (supra), the Punjab & Haryana High Court has held as under:
'5. The contention of Mr. Gupta, learned counsel appearing for the Revenue, is that the Tribunal was wrong in allowing deduction under Section 80P(2) (d) of the Act because it is not established that the assessee had derived the interest by investing all the amount of surplus funds. It is further contended by Mr. Gupta that the assessee has paid interest to Jalandhar Central Co-operative Bank and has also received interest from the said co- operative bank, thereby showing that the assessee has on the aggregate paid interest to the bank and, therefore, no deduction under Section 80P(2)(d) can be allowed. To appreciate this argument, we have to look to the provisions of Section 80P(2)(d) of the Act, For facility of reference, it is reproduced as under :
"80P. (2)(d) in respect of any income by way of interest or dividends derived by the co-operative society from its investments with any other co- operative society, the whole of such income."18 M.A. Nos. 63, 64 & 65/JP/2020
DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur
6. So far as the principle of interpretation applicable to a taxing statute is concerned, we can do no better than to quote the by-now classic words of Rowlatt J., in Cape Brandy Syndicate v. IRC [1921] 1 KB 64, 71 :
"...In a taxing Act, one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used,"
7. The principle laid down by Rowlatt J., has also been time and again approved and applied by the Supreme Court in different cases including the one, Hansraj Gordhandas v. H. H. Dave, Assistant Collector of Central Excise and Customs, AIR 1970 SC 755, 759.
8. Section 80P(2)(d) of the Act allows whole deduction of an income by way of interest or dividends derived by the co- operative society from its investment with any other co- operative society. This provision does not make any distinction in regard to source of the investment because this Section envisages deduction in respect of any income derived by the co-operative society from any investment with a co-operative society. It is immaterial whether any interest paid to the co- operative society exceeds the interest received from the bank on investments. The Revenue is not required to look to the nature of the investment whether it was from its surplus funds or otherwise. The Act does not speak of any adjustment as sought to be made out by learned counsel for the Revenue.
19 M.A. Nos. 63, 64 & 65/JP/2020DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur The provision does not indicate any such adjustment in regard to interest derived from the co-operative society from its investment in any other co-operative society. Therefore, we do not agree with the argument advanced by learned counsel for the Revenue. In our opinion, the learned Tribunal was right in law in allowing deduction under Section 80P(2)(d) of the Income- tax Act, 1961. in respect of interest of RS. 4,00,919 on account of interest received from Nawanshaln Central Co-operative Bank without adjusting the interest paid to the hank. Therefore, the reference is answered against the Revenue in the affirmative and in favour of the assessee.' 8.2 Moreover, the Bombay High Court in the case of Bai Bhuriben Lallubhai (supra) has held that the purpose for which the assessee borrowed money had no connection whether direct or indirect with the income which she earned from the fixed deposit and that she was not entitled to the deduction claimed under Section 12(2). The High Court held that if an assessee had no option except to incur an expenditure in order to make the earning of an income possible, then undoubtedly the exercise of that option is compulsory and any expenditure incurred by reason of the exercise of that option would come within the ambit of section 12(2) of the Indian Income-Tax Act but where the option has no connection with the carrying on of the business or the earning of the income and the option depends upon personal considerations or upon motives of the assessee, that expenditure cannot possibly come within 20 M.A. Nos. 63, 64 & 65/JP/2020 DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur the ambit of Section 12(2). In the present case, the loan was taken for business purpose more particularly purchase of yarn and not for fixed deposits.
9. In view of the above, the questions raised in the present appeals are answered in favour of the assessee and against the revenue. The order passed by the Tribunal is accordingly quashed and set aside."
19. In light of above discussion and respectfully following the decisions referred supra, the assessee society is held eligible for deduction under section 80P(2)(d) in case of interest income of Rs 1,49,40,834 on FDRs placed with Jaipur Central Cooperative Bank Ltd.
20. In the result, the sole ground of Revenue's appeal is dismissed and ground no. 2 in assessee's cross appeal is allowed. Having decided the matter on merits, the legal ground raised by the assessee challenging the validity of the proceedings u/s 147 has become infructous and is dismissed."
25. For A.Y 2014-15 (in ITA no. 22 & 187/JP/2019 dated 30.09.2019), the relevant findings of the Tribunal read as under:
"2.5 At the outset of the hearing, the ld. AR of the assessee submitted that the Ground No. 1 & 1.1 of the assessee and Ground No. 2 of the Revenue raised in the respective appeals are squarely covered by the decision dated 2.09.2019 of Coordinate Bench in assessee's own case in ITA No. 512 & 513/JP/2015 for the Assessment Year 2011-12 and 2012-13 and Revenue's appeal in 21 M.A. Nos. 63, 64 & 65/JP/2020 DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur ITA No. 633 & 634/JP/2019 for the Assessment Year 2011-12 and 2012-13 for which the ld. AR of the assessee relied on para 15 to 20 of the tribunal order."
2.6 During the course of hearing, the ld. DR supported the order of the AO and also filed following case laws to this effect.
1. PCIT vs. Toagars Cooperatives Sale Society [2017] taxmann.com 140 (Karnataka)
2. CIT vs. Rajasthan Rajya Sahakari Upbhokta Sangh Ltd [1996] 84 taxman 33 (Raj).
2.7 We have heard the rival contentions and perused the materials available on record. The Bench has also taken into consideration the judgement cited by the Revenue authorities. However, the Bench noted that recent judgment on the particular issue has already been pronounced by the ITAT Coordinate Bench vide its order dated 02.8.2019 (to be read as 2.09.2019) in the assessee's own case. Therefore, respectfully following the decision of the ITAT Coordinate Bench in assessee's own case (supra), on the issue in question, we allow the Ground No. 1 and 1.1 of the assessee and dismiss the Ground No. 2 of the Revenue."
26. For A.Y 2016-17 (in ITA no. 1178 & 1243/JP/2019 dated 4.03.2020), the relevant findings of the Tribunal read as under:
"7. The aforesaid decision (Coordinate Bench decision for A.Y 2011-12 & 2012-13) has since been followed by the Coordinate Bench in assessee's own case for AY 2014-15. Following the Coordinate Bench decision in assessee's own case for earlier years and considering the principle of consistency, we see no reason to 22 M.A. Nos. 63, 64 & 65/JP/2020 DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur deviate from the earlier decision and accordingly, for the purposes of section 80P(2)(d) of the Act, Jaipur Central Cooperative Bank Ltd shall be treated as a co-operative society. Therefore, interest on FDRs placed by the assessee society with such cooperative society shall be eligible for deduction u/s 80P(2)(d) of the Act and such claim cannot be denied by virtue of provisions of Section 80P(4) of the Act.
8. However, in the aforesaid decision, on the related issue of whether deduction u/s 80P(2)(d) should be allowed on gross interest income on FDR on or net interest income calculating after deducting the interest expenditure, the Coordinate Bench has relied on the Hon'ble Gujarat High Court decision in case of Surat Vankar Sahakari Sangh Ltd vs ACIT (supra) and the decision of the Hon'ble Rajsthan High Court in case of Rajasthan Rajya Sahkari Upbhokta Sangh Ltd (supra) which has been brought to our notice by the ld. CIT DR was not considered and being the decision of the Jurisdictional High Court, the same is binding on the Tribunal and therefore, to this extent the decision rendered by the Co-ordinate Bench for earlier years stand distinguishable. In the case of Rajasthan Rajya Sahkari Upbhokta Sangh Ltd (supra), the Hon'ble Rajasthan High Court has held as under:-
"3. We have considered the arguments of the learned counsel for the revenue. The provisions of section 80P contemplate the deduction of income of co-operative societies. It is provided under sub-section (1) that where, in the case of an assessee being a co-operative society, the gross total income includes any income referred to in sub- section (2), there shall be deducted, in accordance with and 23 M.A. Nos. 63, 64 & 65/JP/2020 DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur subject to the provisions of that section, the sums specified in sub-section (2) in computing the total income of the assessee. Sub-section (2)(d) refers to the sum in respect of income by way of interest or dividends derived by the co- operative society from its investments with any other co- operative society, the whole of such income. So far as determining the eligibility for exemption is concerned, it is not in dispute that the expenses pertain to income which is taxable and non-taxable. A composite account has been maintained by the assessee and a separate account with regard to expenditure and income on both types of income has not been maintained. It was in these circumstances that the ITO has determined the total income after apportioning the expenses to both sources of income. The words 'total income' have been defined under section 2(45) of the Act which means the total amount of income referred to in section 5 of the Act, computed in the manner laid down in the Act. Sub-section (1) of section 80P allows the deduction from the gross total income. An assessee may have income from different sources and that income so computed would form the total income. As per section 80B(5) the gross total income means the total income computed in accordance with the provisions of the Act before making any deduction under Chapter VI-A. When an assessee has income from different sources, the total income from each of such sources has to be computed in accordance with the provisions of the Act and the expenditure incurred for receiving such income has to be taken into consideration.24 M.A. Nos. 63, 64 & 65/JP/2020
DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur The assessee has maintained a composite account of the expenses incurred for earning the taxable as well as exempted income and, therefore, bifurcation made in respect of expenditure cannot be considered to be unjustified. This matter was considered in detail in the case of Kota Co-operative Marketing Society Ltd. v. CIT [1994] 207 ITR 608 (Raj.), wherein it has been held that if a co- operative society is carrying on business and earning income, part of which is exempted and part of which is not exempted, the profits and gains attributable to the exempted activity has to be arrived at on the basis of the books of account maintained by the assessee. If separate books or separate accounts of expenditure have been maintained for the exempted and non-exempted activities, there is no problem. If separate books of account have not been maintained and expenses have been incurred jointly for earning both the incomes then such expenses relatable to earn the non-exempted activities must be estimated. The income exempted under section 80P(2) has to be arrived at separately in order to determine the income under section 80P(2) and it can never be envisaged that the total income which has been so received could be allowed without deducting the expenditure incurred in earning the income. The use of the words 'the whole of the amount of profits and gains of business attributable to any one or more of such activities' appearing at the end of sub-section (2) of section 80P could be only for such income which is attributable to the activities which are exempted. In order to ascertain the 25 M.A. Nos. 63, 64 & 65/JP/2020 DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur real profit, the expenses incurred in earning the said income has to be deducted. In the present case, the Tribunal has found that allowing the deduction for commission at 50 per cent of the receipts is justified. The Tribunal has relied upon the decision in the case of Cloth Traders (P.) Ltd. v. Addl CIT [1979] 118 ITR 243 (SC), which was overruled by the Apex Court in the case of Distributors (Baroda) (P.) Ltd. v. Union of India [1985] 155 ITR 120. Following the decision of this Court in the case of CIT v. Loonkar Tools (P.) Ltd. [1995] 213 ITR 721, DBITR Application No. 1 of 1987, decided at Jodhpur on 21-7-1994, we are of the view that the Tribunal was not justified in holding that the assessee is entitled to deduction under section 80P(2)(d) of the entire interest and not the net receipts. We are also of the opinion that the Tribunal was not justified in granting the exemption of Rs. 2,49,948 to the assessee."
8. The legal proposition thus laid down by the Hon'ble High Court is that the income exempted under section 80P(2) has to be arrived at separately in order to determine the income under section 80P(2) and it can never be envisaged that the total income which has been so received could be allowed without deducting the expenditure incurred in earning the income. In light of the same, the deduction u/s 80P(2)(d) can be allowed only on the net receipt after deducting the expenditure incurred for earning exempt income. Therefore, in the instant case, it needs to be determined whether the assessee has incurred any interest expenditure in earning the interest income.
26 M.A. Nos. 63, 64 & 65/JP/2020DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur
9. In this regard, the ld CIT(A) has allocated the whole of the interest expenditure over the interest on FDRs and to the extent of interest attributable to FDRs placed with JCCB, the same has been reduced while working out the net interest income eligible for deduction u/s 80P(2)(d) of the Act. Per contra, the contention of the ld AR is that the assessee has not incurred any interest expenditure in earning such interest income and its interest free funds are much more than the investment in FDRs placed with JCCB and further, a presumption would arise where both interest free funds and interest bearing funds are available, then the investment has been made out of interest free funds. It was accordingly submitted that since interest free funds were used for placing the FDRs with JCCB, no part of interest expenditure can be attributed to earning of such interest income. In our view, what is relevant to determine is at the relevant point in time, when the FDRs were placed with JCCB, what is the position of availability of funds and whether at that time, interest free surplus funds were available which were deployed in form of FDRs. However, there is nothing on record to this effect. There is no dispute on the legal proposition that where interest free funds are more than the interest bearing funds, a presumption will arise that investment has been made out of interest free funds. However, such a presumption has to be tested at the point in time when the investment was made and not at the beginning or at the end of the year. In the instant case, merely stating that the assessee has interest free funds by way of share capital and accumulated profits at the yearend will not help the case of the assessee as the same reflect the position subsequent to deployment of funds in FDRs 27 M.A. Nos. 63, 64 & 65/JP/2020 DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur which were placed sometime during the year and not at the end of the year. Further, whether such interest free funds at the yearend are liquid funds or are represented by fixed assets and other currents. In case, there are no liquid funds and all the funds are deployed in fixed and current assets, then the said theory of interest free funds doesn't support the case of the assessee. Though the ld AR has submitted some figures, however, we find that the matter require further information and verification and in absence of findings of the lower authorities, for the limited purposes of verification of the aforesaid contention, the matter is set-aside to the file of the ld CIT(A) to examine the same afresh. In the result, the respective grounds of appeal are disposed off."
27. We therefore find that the issue of quantum of deduction u/s 80P(2)(d) i.e, whether the deduction to be allowed on gross or net interest income was under consideration by the Tribunal in each of the aforesaid three assessment years for which misc. application has been filed by the Revenue. In each of these years, the Revenue has challenged the eligibility of the assessee for claim of whole of the deduction u/s 80P(2)(d) whereas the assessee in its cross appeal has challenged the action of the ld CIT(A) in restricting the quantum of deduction eligible for deduction u/s 80P(2)(d) of the Act. Therefore, the issue raised in the misc. applications so filed by Revenue is clearly arising out of the grounds taken by the Revenue as well as the assessee before the Coordinate Benches and orders passed by the Coordinate Benches. We therefore donot see any legal infirmity in terms of raising the said issue by the Revenue before us by way of present misc. applications.
28 M.A. Nos. 63, 64 & 65/JP/2020DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur
28. For A.Y 2011-12 and A.Y 2012-13, the Coordinate Bench vide its order dated 02.09.2019 has held that there was no necessity to examine the issue as to whether deduction u/s 80P(2)(d) shall be allowed on the gross interest income on FDRs or it should be allowed on the net interest income as conceptually the deduction under section 80P(2)(d) has to be allowed on gross and not on net interest income as held by the Hon'ble Gujarat High Court in case of Surat Vankar Sahakari Sangh Ltd vs ACIT [2016] 72 Taxmann.com 169 (Guj). The Coordinate Bench therefore following the decision of Hon'ble Gujarat High Court allowed the deduction on gross interest income for respective assessment years.
29. For A.Y 2014-15, the Coordinate Bench followed the aforesaid decision for A.Y 2011-12 and A.Y 2012-13 and vide its order dated 30.09.2019 allowed the deduction on gross interest income. In this year, we find that the ld DR brought to the notice of Coordinate Bench, the decision of Hon'ble Rajasthan High Court in case of CIT vs Rajasthan Rajya Sahakari Upbhokta Sangh Ltd [1996] 84 taxmann 33 (Raj) and the Coordinate Bench held that it has taken into consideration the decision cited by the Revenue authorities, however, given that Coordinate Bench in assessee's own case has decided the matter recently on 2.09.2019 for A.Y 2011-12 and A.Y 2012-13, it decided to follow the earlier decision and decided the matter in favour of the assessee.
30. For A.Y 2016-17, the Coordinate Bench in its order dated 4.03.2020 held that in the earlier decisions so rendered for A.Y 2011-12, AY 2012-13 and A.Y 2014-15, the Coordinate Benches have relied on the Hon'ble Gujarat High Court decision in case of Surat Vankar Sahakari Sangh Ltd vs ACIT (supra) and the decision of the Hon'ble Rajsthan High 29 M.A. Nos. 63, 64 & 65/JP/2020 DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur Court in case of Rajasthan Rajya Sahkari Upbhokta Sangh Ltd (supra), which has been brought to its notice by the ld. CIT DR, was not considered and being the decision of the Jurisdictional High Court, the same is binding on the Tribunal and therefore, to this extent the decision rendered by the Co-ordinate Bench for earlier years stand distinguishable. And following the decision of the Hon'ble Rajasthan High Court in case of Rajasthan Rajya Sahkari Upbhokta Sangh Ltd (supra), it held as under:
"14. The legal proposition thus laid down by the Hon'ble High Court is that the income exempted under section 80P(2) has to be arrived at separately in order to determine the income under section 80P(2) and it can never be envisaged that the total income which has been so received could be allowed without deducting the expenditure incurred in earning the income. In light of the same, the deduction u/s 80P(2)(d) can be allowed only on the net receipt after deducting the expenditure incurred for earning exempt income. Therefore, in the instant case, it needs to be determined whether the assessee has incurred any interest expenditure in earning the interest income."
31. We therefore find that in its latest decision rendered on 4.03.2020, the Coordinate Bench has followed the dictum laid down by the Hon'ble Jurisdictional High Court, however, in earlier two decisions rendered on 2.09.2019 as well as 30.09.2019, the dictum laid down by the Hon'ble Jurisdictional High Court has not been followed which is clearly a mistake apparent from record rectifiable under section 254(2) of the Act and reference can be drawn to the decision of Hon'ble Supreme Court in case of ACIT vs Saurashtra Kutch Stock Exchange Ltd [2008] 305 ITR 30 M.A. Nos. 63, 64 & 65/JP/2020 DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur 227(SC). Apparently, we find that in its decision rendered on 2.09.2019, the Coordinate Bench has followed the decision in case of ITO vs Shree Keshorai Patan Sahakari Sugar Mill and therein, there is reference of Hon'ble Jurisdictional High Court decision in case of Rajasthan Rajya Sahkari Upbhokta Sangh Ltd (supra) which has apparently skipped its attention. Similarly, in context of latter decision rendered on 30.09.2019, we find that the reference of Coordinate Bench was specifically drawn by the ld DR to the decision of Hon'ble Jurisdictional High Court decision in case of Rajasthan Rajya Sahkari Upbhokta Sangh Ltd (supra) which has been noted by it but apparently not considered which constitutes a mistake apparent from record rectifiable under section 254(2) of the Act. The fact that the decision of Hon'ble jurisdictional High Court has not been considered in earlier two decisions and has been considered in latter decision rendered by the Coordinate Bench clearly renders the earlier two decisions amenable for rectification u/s 254(2) of the Act. The fact that the Coordinate Benches have followed the subsequent decision of the Hon'ble Gujarat High Court which has in turn referred to the earlier Rajasthan High Court decision, to our mind, will not change the situation as the decision of the Hon'ble jurisdictional High Court will always carry the precedence and not following the same will be a breach of judicial discipline for the Jaipur Benches of the Tribunal and the orders so passed clearly call for rectification. Therefore, in our considered view, the orders so passed by the Coordinate Benches thus need to be recalled for limited purposes of adjudication of the said matter afresh taking into consideration the decision rendered by the Hon'ble Rajasthan High Court way back on 12.01.1995 much prior to the two decisions rendered by the Coordinate Benches.
31 M.A. Nos. 63, 64 & 65/JP/2020DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur
32. Further, we agree with the contention advanced by the ld AR that the legal issue challenging the validity of order passed u/s 147 was earlier dismissed as infructious for A.Y 2011-12 and A.Y 2012-13 as the matter was only decided on merits and the same should be also be recalled and decided afresh.
33. In the entirety of facts and circumstances of the case, we hereby recall the earlier orders so passed by the Coordinate Benches in ITA No. 633/JP/19 & 512/JP/19 for A.Y 2011-12 and 634/JP/19 & 513/JP/2019 dated 02.09.2019 and subsequent order passed by the Tribunal in ITA Nos. 187/JP/19 & 22/JP/19 dated 30.09.2019 for A.Y 2014-15 for the limited purposes of adjudication of matter relating to quantum of deduction eligible for deduction u/s 80P(2)(d) as to whether the deduction should be allowed on gross interest or net interest income afresh taking into consideration the decision of the Hon'ble Jurisdictional High Court in case of Rajasthan Rajya Sahkari Upbhokta Sangh Ltd (supra) as well as adjudication of following grounds of appeal afresh as raised by the assessee in its respective cross-appeals:
ITA. No. 512/JP/2019 (For A.Y 2011-12) "1. The ld. CIT(A) has erred on facts and in law in upholding validity of order passed by AO u/s 147 of IT Act, 1961.
2. The ld. CIT(A) has erred on facts and in law in holding that interest expenditure to the extent of Rs. 87,91,593/- is attributable to the interest income of Rs. 1,46,40,834/- earned on FDRs maintained with Jaipur Central Cooperative Bank Ltd. (JCCB), thereby disallowing deduction u/s 80P to this extent. He has further erred in considering the amount of 32 M.A. Nos. 63, 64 & 65/JP/2020 DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur interest income from JCCB at Rs. 1,46,40,834/- instead of Rs.
1,49,40,834/-.
2.1 The ld. CIT(A) has erred on facts and in law in not considering that investment in FDRs is made out of own funds and borrowed funds has been utilized for business purpose and therefore, no interest expenditure can be attributed for earning the interest income."
ITA. No. 513/JP/2019 (For A.Y 2012-13) "1. The Ld. CIT(A) has erred on facts and in law in upholding the validity of the order passed by AO u/s 147 of IT Act, 1961.
2. The Ld. CIT(A) has erred on facts and in law in holding that interest expenditure to the extent of Rs. 95,12,659/- is attributable to the interest income of Rs. 1,59,92,544/- earned on FDRs maintained with Jaipur Central Cooperative Bank Ltd., thereby disallowing deduction u/s 80P to this extent.
2.1 The ld. CIT(A) has erred on facts and in law in not considering that investment in FDRs is made out of own funds and borrowed funds has been utilized for business purpose and therefore, no interest expenditure can be attributed for earning the interest income."
ITA. No. 22/JP/2019 (For A.Y 2014-15) "1. The Ld. CIT(A) has erred on facts and in law in holding that interest expenditure to the extent of Rs. 1,78,92,810/- is attributable to the interest income of Rs. 4,55,27,617/- earned on FDRs maintained with Jaipur Central Cooperative Bank Ltd., thereby disallowing deduction u/s 80P to this extent.
33 M.A. Nos. 63, 64 & 65/JP/2020DCIT, Jaipur vs. M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd Jaipur 2.1 The ld. CIT(A) has erred on facts and in law in not considering that investment in FDRs is made out of own funds and borrowed funds has been utilized for business purpose and therefore, no interest expenditure can be attributed for earning the interest income."
In the result, miscellaneous applications so filed by the Revenue are allowed and disposed off in light of aforesaid discussion.
Order pronounced in the Open Court on 21/01/2021.
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(Sandeep Gosain) (Vikram Singh Yadav)
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1. vihykFkhZ@The Appellant- DCIT, Circle-06, Jaipur
2. izR;FkhZ@ The Respondent- M/s Jaipur Zila Dugdh Utpadak Sahkari Sangh Ltd. Jaipur
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6. xkMZ QkbZy@ Guard File {M.A Nos. 63, 64 & 65/JP/2020} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar