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Showing contexts for: Infrastructure Development in South Indian Bank Ltd, Thrissur vs The Acit Cir-1(1), Thrissur on 21 March, 2019Matching Fragments
I.T.A. Nos.215&219/Coch/2018 (A) industrial or agricultural development (B) Development of Infrastructure facility in India; or (C ) Development of Housing in India
(ii) in respect of the specified entity referred to in sub-clause (v) of clause (a), the business of providing long-term finance for the construction or purchase of houses in India for residential purposes; and 9.2 Here it is quite apparent that a Housing Finance Company will be entitled to the deduction u/s 36(1)(viii) from income generated out of the business of providing long-term finance for the construction or purchase of houses in India for residential purposes. A Banking Company will be entitled to the deduction u/s 36(1)(viii) from income generated out of the business of providing long-term finance for only Development of Housing in India. This makes it abundantly clear that for the purposes of section 36(1)(viii) providing long-term finance for the construction or purchase of houses in India for residential purposes and providing long-term finance for only Development of Housing in India are different. 9.3 The words Development of Housing or Housing has not been defined in he Act. Hence, we will have to take the dictionary meaning. Housing means as per dictionary meaning : -
9.1 On appeal, the CIT(A) read as follows:-
"8.5 Further, as per the provisions of Section 36(1)(viii), eligible business means business of providing long term finance for industrial or agricultural development, development of infrastructure facility in India and development of housing in India. The break up of the long term finance was also furnished by the appellant, as below:-
Description Interest (Rs.) Income purposes
Long Term A/on 11,19,104 Housing Loan
housing loan Agri.
Agri. Loan 37,89,067 Agri. Purposes
Mithra SHG/NHG 12,59,494 Carry bag mfg. units
loans (Industrial purposes)
Term loans 64, 17 ,383 For establishment of new
Industries and allied
activities societies and
expansion of existing
industries
Housing Loans 42,85,34,630 Housing
Project loans 2,32,48,158 Small Scale industrial
projects etc.
Other Long Term 4,54,60,679 For purchase of
property loans housing
(construction of
flats/purchase of
property for construction of
house/flats
Total 50,98,18,515
9.2 Aggrieved by the order of the CIT(A), the revenue is in appeal before us. The Id. DR strongly supported the order of the Assessing Officer and contended that the new order of the CIT(A) is a non-speaking order and the same needs to be quashed. The Ld. Counsel for the assessee, on the other hand, reiterated the submission made before the Income Tax Authorities.
Joint Director of Income tax {TS-7866-IT AT-2017 (Cochin)-O} 9.3 We have heard the rival submissions and perused the material on record. As per provisions of section 36(1)(viii) of the IT Act, the eligible business means business of providing long term finance for industrial or agricultural development, development of infrastructure facility in India and development of housing in India. In our view, industrial purposes includes all types of industries both manufacturing as well as service industry. Admittedly, these are loans advanced by the assesse for long term finance and the details of the purpose for which the loans are advanced are enumerated in para 8.5 of the impugned order of the CIT(A). The CIT(A), after examining the purpose for which the loans were advanced had categorically held that the interest income, out of loans enumerated, clearly falls within the definition uf 'eligible business' under section 36(1)(viii) of the Act. This factual finding of the CIT(A) was not dispelled by the revenue by any contrary material on record. Moreover, on identical facts, the claim u/s. 36(1)(viii) of the Act for earlier assessment years namely A.Y.2008-09 and 2009-10 were disallowed by the CIT(A) and department had accepted the same. It is well settled that department having accepted the CIT(A)'s order for earlier years cannot agitate the issue for the current assessment years, unless department is able to prove that for earlier years CIT(A) orders were accepted on account of low tax effect. Therefore, we are of the view that the order of the CIT(A) is correct and in accordance with law on this issue and no interference is called for. It is ordered accordingly.
10. In the result, the appeal filed by the revenue is dismissed."
10.2 Accordingly, the CIT(A) observed that the assessee is entitled to deduction in accordance with Section 36(1)(viii) for the income generated from advancing to (A) industrial or agricultural development and (B) development of infrastructure I.T.A. Nos.215&219/Coch/2018 facility in India. Therefore, this ground was partially allowed. However, the CIT(A) found that the assessee had adopted a new methodology for claiming deduction u/s 36(1)(viii) of IT Act which is more objective and had resulted in reduction of assessee's claim. Thus, while allowing deduction u/s 36(1)(viii) of IT Act, the CIT(A) directed the assessing officer to allow such deduction as per the new computation. 10.3 In view of the above order of the Tribunal in the case of Ernakulam District Co-op. Bank Ltd. vs. Joint Director Income-tax (supra), we do not find any infirmity in the order of the CIT(A) in granting relief to the assessee u/s. 36(1)(viii) of the Act with regard to providing long term finance for industrial or agricultural development or development of infrastructure facility in India and the same is confirmed. Thus, this ground of appeals of both the assessee as well as the Revenue are dismissed.