Income Tax Appellate Tribunal - Ahmedabad
The Sardar Co. Op. Credit Society Ltd.,, ... vs Dcit, Panchmahal Circle,, Godhra on 21 December, 2018
आयकर अपील य अ धकरण, अहमदाबाद यायपीठ 'A' अहमदाबाद ।
IN THE INCOME TAX APPELLATE TRIBUNAL "A" BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMEBR आयकर अपील सं./I.T.A. No. 2037/Ahd/2017 ( नधा रण वष / Assessment Year : 2014-15) The Sardar Co op Credit बनाम/ DCIT Society Ltd. Vs. Panchmahal Circle, nd 2 Floor, Boriyawala Godhra shopping Centre, At & Post Lunawala, Dist. Mahisanagr थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. : AABAS5732K (अपीलाथ /Appellant) .. ( यथ / Respondent) & आयकर अपील सं./I.T.A. No. 2038/Ahd/2017 ( नधा रण वष / Assessment Year : 2014-15) The Citizen's Credit Co बनाम/ DCIT op Society Ltd. Vs. Panchmahal Circle, Paraspar, Pavagadh Road, Godhra Halol - 389350, Panchmahals थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. : AABAT7221Q (अपीलाथ /Appellant) .. ( यथ / Respondent) & आयकर अपील सं./I.T.A. No. 2039/Ahd/2017 ( नधा रण वष / Assessment Year : 2014-15) Shree Ram Co op Credit बनाम/ ITO Society Society Ltd. Vs. Ward1, Dahod Chakaliya Road, Dahod 389151 Dist: Dahod थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. : AAGAS4007A (अपीलाथ /Appellant) .. ( यथ / Respondent) I T A N o s . 2 0 3 7 t o 2 0 4 0 / Ah d / 1 7 ( T h e S a r d a r C o o p Credit Society & Ors.] - 2 -
& आयकर अपील सं./I.T.A. No. 2040/Ahd/2017 ( नधा रण वष / Assessment Year : 2014-15) The Navdeep Co op. बनाम/ DCIT Credit Society Ltd. Vs. Panchmahal Circle, College Road, Santrampur, Godhra Dist: Mahisagar, Gujarat 389260 थायी ले खा सं . /जीआइआर सं . /PAN/GIR No. : AAAAT3708K (अपीलाथ /Appellant) .. ( यथ / Respondent) अपीलाथ ओर से /Appellant by : Shri Bandish Soparkar, A.R. यथ क ओर से / Shri Mudit Nagpal, A.R. Respondent by :
सन ु वाई क तार ख / Date of 12/12/2018 Hearing घोषणा क तार ख /Date of 21/12/2018 Pronouncement आदे श/O R D E R PER PRADIP KUMAR KEDIA - AM:
The captioned appeals have been preferred by the respective assessees named above for different assessment years tabulated herein:
Sl. ITA No. Name of AY CIT(A) Assessment
No. Assessee order order
dated passed
under s.
143 (3) of
the Income
Tax Act,
1961 ('the
Act') dated
1 2037/Ahd/2017 The Sardar Co 2014-15 16.06.2017 08.11.2016
op Credit
Society Ltd.
I T A N o s . 2 0 3 7 t o 2 0 4 0 / Ah d / 1 7 ( T h e S a r d a r C o o p Credit Society & Ors.] - 3 -
2 2038/Ahd/2017 The Citizen's 2014-15 15.06.2017 08.11.2016 Credit Co op Society Ltd.
3 2039/Ahd/2017 Shree Ram Co- 2014-15 16.06.2017 03.10.2016 op Credit Society Ltd.
4 2040/Ahd/2017 The Navdeep 2014-15 15.06.2017 09.11.2016 Co op Credit Society Ltd.ITA No. 2037/Ahd/2017-AY 2014-15 (The Sardar Co.Op.
Credit Society Ltd.)
2. When the matter was called for hearing, the learned AR for the assessee pointed out that the grievances of the assessee are two fold; (i) claim of deduction of 80P on account of interest income derived from Scheduled Banks and Co-operative Banks have been denied by the Revenue & (ii) the proportionate interest expenditure attributable to interest income for deduction under s.80P(2) of the Act has been denied and requires to be considered and only net interest income can possibly be subjected to tax. The learned AR for the assessee accordingly sought suitable relief.
4. The learned DR for the Revenue relied upon the order of the authorities below.
5. We have considered rival submissions. We do not find any merit in the principal plea laid on behalf of the assessee for allowability of interest derived from deposits under s.80P(2)(a)(i) of the Act as attributable to surplus funds with nationalized banks in view of the several decisions including the decision of Hon'ble Gujarat High Court in the case of SBI Employees Co-credit & Supply Society v. CIT (2016) 389 ITR 578. Thus, we decline to I T A N o s . 2 0 3 7 t o 2 0 4 0 / Ah d / 1 7 ( T h e S a r d a r C o o p Credit Society & Ors.] - 4 -
interfere with the action of the Revenue on this score. As regards the interest derived from deposits placed with the co-operative banks, we find merit in the plea of the assessee for eligibility of deduction in view of Section 80P(2)(d) of the Act where the deposits are placed with co-operative banks not under the control of the Reserve Bank of India(RBI). Thus, it will be open to assessee to demonstrate before the AO that recipient co-operative banks are not licensed by RBI and are mere co-operative societies. To this extent, the issue is remanded back to AO for decision afresh.
6. We find merit in the alternative plea of the assessee for allowability of expenditure attributable to the earning of such interest income. This aspect however will also require factual verification and accordingly remitted back to the file of the AO for determining the allowability of expenditure attributable to interest earned on deposits, if any, with nationalized banks or other entities keeping in mind the ratio of the decision of Hon'ble Supreme Court in the case of CIT vs. Dr. V. P. Gopinathan (2001) 116 TAXMAN 489 (SC). The assessee shall be at liberty to provide nexus of interest incurred with that of interest income before AO for seeking relief on this score.
7. In the result, the appeal of the assessee is partly allowed.
8. The facts and circumstances in ITA Nos. 2038, 2039 & 2040/Ahd/2017 are substantially similar. Thus, in parity with the observations made in ITA No. 2037/Ahd/2017 (supra), the other I T A N o s . 2 0 3 7 t o 2 0 4 0 / Ah d / 1 7 ( T h e S a r d a r C o o p Credit Society & Ors.] - 5 -
three appeals filed by three different assessees are also restored to the file of AO for factual verification and are partly allowed.
9. In the result, all the appeals of assessee captioned above are partly allowed.
This Order pronounced in Open Court on 21/12/2018
Sd/- Sd/-
(MAHAVIR PRASAD) (PRADIP KUMAR KEDIA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Ahmedabad: Dated 21/12/2018
True Copy
S. K. SINHA
आदे श क त!ल"प अ#े"षत / Copy of Order Forwarded to:-
1. राज व / Revenue
2. आवेदक / Assessee
3. संबं*धत आयकर आयु,त / Concerned CIT
4. आयकर आय, ु त- अपील / CIT (A)
5. 0वभागीय 3त3न*ध, आयकर अपील य अ*धकरण, अहमदाबाद / DR, ITAT, Ahmedabad
6. गाड9 फाइल / Guard file.
By order/आदे श से, उप/सहायक पंजीकार आयकर अपील य अ*धकरण, अहमदाबाद ।