DCIT, CHENNAI v. The Tamilnadu Co-operative Marketing Federation Limited, CHENNAI

ITA 1084/CHNY/2016 | 2008-2009
Pronouncement Date: 30-09-2016

Appeal Details

RSA Number 108421714 RSA 2016
Assessee PAN AABAT4288M
Bench Chennai
Appeal Number ITA 1084/CHNY/2016
Duration Of Justice 5 month(s) 8 day(s)
Appellant DCIT, CHENNAI
Respondent The Tamilnadu Co-operative Marketing Federation Limited, CHENNAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-09-2016
Appeal Filed By Department
Bench Allotted A
Assessment Year 2008-2009
Appeal Filed On 21-04-2016
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH CHENNAI . . . .. ' #$ & '( [ BEFORE SHRI N.R.S. GANESAN JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH ACCOUNTANT MEMBER] ./ I.T.A.NO.1084/MDS/2016 / ASSESSMENT YEAR : 2008-09 THE DY. COMMISSIONER OF INCOME TAX NON-CORPORATE CIRCLE 3 CHENNAI VS. M/S THE TAMILNADU CO - OPERATIVE MARKETING FEDERATION LTD NO.713 MOUNT ROAD CHENNAI 600 006 [PAN AABAT 4288 M] ( )* / APPELLANT) ( + )* /RESPONDENT) / APPELLANT BY : SHRI SHIVA SRIIVAS JCIT /RESPONDENT BY : NONE / DATE OF HEARING : 21 - 09 - 2016 ! / DATE OF PRONOUNCEMENT : 30 - 0 9 - 2016 / O R D E R PER D.S. SUNDER SINGH ACCOUNTANT MEMBER THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-4 CHENNA I DATED 11.1.2016 FOR ASSESSMENT YEAR 2011-12. 2. AT THE OUTSET IT WAS NOTED THAT NONE ATTENDE D ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF NOTICE THROUGH T HE DEPARTMENT. THEREFORE WE PROCEED TO DECIDE THE APPEAL AFTER HE ARING THE LD. DR AND CONSIDERING THE MATERIAL AVAILABLE ON RECORD. :-2-: ITA NO.1084/16 3. CONDONATION OF DELAY: THERE WAS A DELAY OF SEVEN DA YS IN FILING THE APPEAL. THE APPELLANT (DCIT NON CORPORATE CIRC LE-3 CHENNAI) HAS FILED A CONDONATION PETITION REQUESTING FOR CON DONING THE DELAY. WE HAVE GONE THROUGH THE PETITION AND CONDONE THE D ELAY. 4. THE REVENUES GROUNDS OF APPEAL ARE RELATE D TO THE DEDUCTION U/S 80P(2)(D) OF THE INCOME-TAX ACT 19 61 (IN SHORT THE ACT) IN RESPECT OF INCOME FROM OTHER SOURCES AND D EDUCTION U/S.80P(2)(E) IN RESPECT OF INCOME FROM HOUSE PROPE RTY. 5. THE ASSESSEE IS A CO-OPERATIVE SOCIETY FORM ED BY THE GOVERNMENT OF TAMILNADU. THE RETURN OF INCOME ADMIT TING NIL INCOME WAS FILED ON 29.9.2011. THE CASE WAS SELECT ED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED ON A TOTAL INCOME OF ` 1 54 78 657/-. THE ASSESSEE ADMITTED A SUM OF RS.1 19.86 609/- UNDER THE INCOME FROM OTHER SOURCES AND INCOME PRO PERTY AMOUNTING TO RS.35 52 888/- AGGREGATING TO ` 1 54 78 657/- AND CLAIMED THE SET OFF OF THE ENTIRE INCOME AGAINST TH E BUSINESS LOSSES. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFF ICER RAISED THE OBJECTION REGARDING THE INCORRECT CLAIM OF SET OFF OF LOSSES (I.E. SET OFF OF BUSINESS LOSSES AGAINST THE INCOME FROM OTH ER SOURCES AND INCOME FROM PROPERTY) U/S 72. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE MADE AN ALTERNATE CLAIM O F DEDUCTION U/S :-3-: ITA NO.1084/16 80P(2)(A)(IV) IN RESPECT OF BUSINESS INCOME AND 80P (2)(E) IN RESPECT OF PROPERTY INCOME. IN THE ASSESSMENT ORDER ASSESSI NG OFFICER HAS REJECTED THE CLAIM MADE BY THE ASSESSEE AND ASSES SED THE TOTAL INCOME AT RS.1 54 78 657/- 6. DURING THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE WHENEVER INCURRED BUSIN ESS LOSSES DURING A PARTICULAR YEAR SET OFF THE BUSINESS LOSS ES AGAINST THE INCOME FROM OTHER HEADS AND CARRY FORWARDED THE BUS INESS LOSS TO THE SUBSEQUENT ASSESSMENT YEARS. SIMILARLY WHENEV ER THE ASSESSEE EARNED INCOME FROM BUSINESS SETS OFF THE I NCOME WITH BROUGHT FORWARD BUSINESS LOSSES WHICH WAS NOT PERMI TTED AS PER THE INCOME-TAX ACT 1961. THE CLAIM OF DEDUCTION U/S 8 0P WAS REJECTED BY THE ASSESSING OFFICER BECAUSE THE ASSESSEE HAS NOT MADE THE CLAIM IN THE RETURN OF INCOME AND THE CLAIM WAS MAD E SUBSEQUENTLY DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE AS SESSING OFFICER WAS OF THE OPINION THAT THE CLAIM MADE DURING THE C OURSE OF ASSESSMENT PROCEEDINGS CANNOT BE ENTERTAINED AND RE LIED ON THE JUDGMENT OF HON'BLE SUPREME COURT IN THE CASE OF GO ETZE (INDIA) LTD VS CIT 284 ITR 323. 7. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICE R THE ASSESSEE WENT IN APPEAL BEFORE THE CIT(A). THE LD. CIT(A) DELETED :-4-: ITA NO.1084/16 THE ADDITION HOLDING THAT THE ASSESSEE IS PERMITTE D TO MAKE A CLAIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS OR BEFO RE THE FIRST APPELLATE AUTHORITY. THE CIT(A) RELIED ON THE JUDG MENT OF HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS PRUTHVI BR OKERS & SHAREHOLDERS PVT. LTD. WHEREIN IT WAS HELD THAT TAX PAYER IS ENTITLED TO CLAIM THE DEDUCTION BEFORE THE APPELLATE AUTHORI TIES WHICH WAS NOT CLAIMED IN THE ORIGINAL OR REVISED INCOME TAX R ETURN BUT WAS CLAIMED IN THE ASSESSMENT AND APPELLATE PROCEEDINGS . THE CIT(A) ALSO RELIED ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF JUTE CORPORATION OF INDIA LTD VS CIT 187 ITR 68 8. THE CIT(A) ALLOWED THE CLAIM OF THE ASSESSEE U/S 80P(2)(D) A ND 80P(2)(E) AS PER PARA 10 O F HIS ORDER WHICH IS EXTRACTED AS UND ER: 1 0. I FIND FORCE IN THE ABOVE SUBMISSIONS OF THE APPELLANT. THE INTEREST INCOME EARNED ON THE INVESTMENTS WITH OTHER CO-OPERATIVE SOCIETIES AND COOPERATIVE BANKS IS ELIGIBLE FOR DEDUCTION U/S 80 P(2)(D) OF THE ACT AND SIMILARLY THE INCOME DERIVED FROM LETTING OUT OF THE PROPERTIES OF THE SOCIETIES COVE RED UNDER SECTION 80P(2)( E ) OF THE ACT. THE AO HAS NOT CONTROVERTED THE NATURE OF THESE INCOME DUR ING THE ASSESSMENT PROCEEDING. SIMPLY BECAUSE THE ASSESSEE HAS NOT CLAIMED DEDUCTION UNDER SECTION 80 P IN THE RETURN OF INCOME THE ASSESSEE CANNOT BE DEPRIVED OF THE GENUINE AND BONAFIDE CLAIM OF DEDUCTION U/S 80P OF THE ACT. THEREFORE IN VIEW OF THE ABOVE OBSERVATIONS AND ALSO RESPECTFULLY FOLLOWIN G THE JUDGEMENTS OF THE HON'BLE COURTS I AM OF THE :-5-: ITA NO.1084/16 CONSIDERED VIEW THAT THE ASSESSEE'S CLAIM OF DEDUCTIONS U/S 80P(2)(D) & (E) ARE LEGITIMATE AND BONAFIDE WHICH MUST BE ALLOWED BY THE AO. HENCE TH E AO IS DIRECTED TO ALLOW THE CLAIM OF THE ASSESSEE F OR DEDUCTION U/S 80 P OF THE ACT. ACCORDINGLY THE FIN DINGS GIVEN BY THE AO ARE REJECTED. 8. THE LD. DR ARGUED THAT THE ASSESSEE HAS NO T MADE ANY CLAIM IN THE RETURN OF INCOME AND ACCORDINGLY NOT A LLOWABLE AND SUPPORTED THE ASSESSMENT ORDER. NONE APPEARED FOR T HE RESPONDENT. 9. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL PLACED ON RECORD. THE ASSESSEE IS EARNING INCOME AND MAKING THE INVESTMENTS WITH OTHER CO-OPERATIVE BANKS WHICH ARE ELIGIBLE FOR THE DEDUCTION U/S 80P(2)(D) OF THE ACT. SIMILARLY TH E INCOME DERIVED FROM LETTING OUT OF PROPERTIES OF THE SOCIETY IS CO VERED U/S 80P(2)(E) OF THE ACT. THE ASSESSEE DID NOT MAKE ANY CLAIM IN THE RETURN OF INCOME U/S 80P SINCE THERE WAS NO TAXABLE INCOME A S PER THE RETURN SUBMITTED BY THE ASSESSEE. THEREFORE WHEN THE ASSESSING OFFICER HAS RAISED OBJECTION FOR TAXING THE INCOME DISALLOWING THE SET OFF OF LOSSES THE ASSESSEE HAS NATURALLY CLAIMED THE DEDUCTION U/S 80P SINCE THE DISALLOWANCE WOULD BE RESULTING IN TA XABLE INCOME. AS DECIDED BY THE BOMBAY HIGH COURT IN THE CASE OF PRU THVI BROKERS & SHAREHOLDERS PVT. LTD.(SUPRA) AND THE HON'BLE SUPRE ME COURT IN THE :-6-: ITA NO.1084/16 CASE OF JUTE CORPORATION OF INDIA LTD (SUPRA) THER E IS NO BAR ON THE APPELLATE AUTHORITIES TO ENTERTAIN ADDITIONAL CLAIM DURING THE APPEAL PROCEEDINGS. THEREFORE WE DO NOT FIND ANY INFIRMI TY IN THE ORDER OF THE CIT(A) AND THE CIT(A) HAS RIGHTLY ALLOWED THE C LAIM OF THE ASSESSEE. HOWEVER IN THE GROUNDS OF APPEAL THE ASS ESSING OFFICER HAS RAISED AN ISSUE OF NON VERIFICATION OF INCOME I N RESPECT OF INCOME FROM OTHER SOURCES AND THE INCOME FROM PROPE RTY WHETHER IT WAS EARNED FROM INVESTMENTS IN OTHER COOPERATIVE SO CIETIES OR NOT AND LETTING OUT OF GODOWNS AND WAREHOUSES. SINCE T HE ASSESSING OFFICER HAS DISALLOWED THE ENTIRE CLAIM MADE BY THE ASSESSEE THERE WAS NO OCCASION TO VERIFY THE CORRECTNESS OF THE CL AIM FOR DEDUCTION U/S 80P. THE ASSESSEE ALSO HAS NOT PLACED ANY MATER IAL BEFORE US. THEREFORE WE REMIT THE MATTER BACK TO THE ASSESSING OFFICER FOR A LIMITED PURPOSE TO VERIFY THE INCOME FROM OTHER SOU RCES WHETHER IT WAS EARNED OUT OF INVESTMENTS IN OTHER COOPERATIVE SOCIETIES OR NOT AND IN CASE OF PROPERTY INCOME WHETHER IT WAS EARNE D FROM LETTING OUT OF GODOWNS AS CLAIMED BY THE ASSESSEE AND DECID E THE ISSUE AS PER THE LAW. THE ASSESSEE IS DIRECTED FURNISH THE I NFORMATION TO THE AO TO COMPLETE THE PROCEEDINGS. THE GROUNDS RAISED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES.. :-7-: ITA NO.1084/16 10. THE NEXT GROUND RAISED BY THE REVENUE IS RELATED TO RULE 46A. THIS GROUND IS RAISED BY THE REVENUE BECAUSE THE AL TERNATIVE GROUND RAISED WAS NOT A SUBJECT MATTER OF ASSESSME NT PROCEEDINGS. SINCE WE REMITTED THE MATTER BACK TO THE ASSESSING OFFICER THIS GROUND IS INFRUCTUOUS THEREFORE THIS GROUND IS DIS MISSED. 11. IN THE RESULT THE APPEAL OF THE REVENUE IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER 2016 AT CHENNAI. SD/- SD/- ( ' . ' / . 0 ) ( N.R.S. GANESAN ) / JUDICIAL MEMBER ( . . ' #$ ) (D.S. SUNDER SINGH) & / ACCOUNTANT MEMBER '# / CHENNAI $% / DATED: 30 TH SEPTEMBER 2016 RD %& '( )( / COPY TO: 1 . / APPELLANT 4. * / CIT 2. / RESPONDENT 5. (+ - / DR 3. * () / CIT(A) 6. 0 1 / GF