ACIT, Circle,Haldia, Purba Medinipur v. Tamluk Town Co-operative Credit Society Ltd, Purba Medinipur

ITA 1208/KOL/2012 | 2007-2008
Pronouncement Date: 05-11-2014

Appeal Details

RSA Number 120823514 RSA 2012
Assessee PAN AAALT0302J
Bench Kolkata
Appeal Number ITA 1208/KOL/2012
Duration Of Justice 2 year(s) 2 month(s) 19 day(s)
Appellant ACIT, Circle,Haldia, Purba Medinipur
Respondent Tamluk Town Co-operative Credit Society Ltd, Purba Medinipur
Appeal Type Income Tax Appeal
Pronouncement Date 05-11-2014
Appeal Filed By Department
Bench Allotted A
Tribunal Order Date 05-11-2014
Assessment Year 2007-2008
Appeal Filed On 17-08-2012
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BENCH A KOLKATA [BEFORE HONBLE SRI MAHAVIR SINGH JM& HONBLE S RI SHAMIM YAHYA AM ] ITA NO.1208/KOL/2012 ASSESSMENT YEAR : 2007-08 ( APPELLANT ) (RESPONDENT) A.C.I.T. CIRCLE -VS- TAMLUK TOWN CO-OPERATIVE HALDIA CREDIT SOCIETY LTD. PURBA MEDINIPUR. (PAN:AAALT 0302 J) FOR THE APPELLANT SHRI ANIL KUMAR PANDE JCIT SR.DR FOR THE RESPONDENT SHRI MIHIR BANDYOPADHYAY DATE OF HEARING : 05.11.2014 DATE OF PRONOUNCEMENT : 05. 11.2014. ORDER PER SHRI SHAMIM YAHYA AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. C.I.T.(A)- XXXIII KOLKATA DT. 06.06.2012 AND PERTAINS TO ASSE SSMENT YEAR 2007-08. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE RE AD AS UNDER :- 1. FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE LD.CIT(A) KOLKATA ERRED IN ALLOWING THE ASSESSEES CLAIM FOR DEDUCTION U/S 80P . 2. THE APPELLANT CRAVES LEAVE TO ADD TO ALTER OR M ODIFY ANY ONE OR ALL OF THE GROUNDS OF APPEAL MENTIONED ABOVE. 3. IN THIS CASE THE ASSESSE IS A CO-OPERATIVE SOCI ETY REGISTERED UNDER THE BENGAL CO-OPERATIVE SOCIETIES ACT 1940. ITS ACTIVITY INCL UDED PROVIDING OF LOANS TO ITS MEMBERS. IT WAS OBSERVED BY THE ASSESSING OFFICER T HAT WHENEVER ANY PERSON APPROACHED THE SOCIETY FOR OBTAINING LOAN HE WAS I NTRODUCED IN THE SOCIETY AS NOMINAL MEMBER. A NOMINAL MEMBER NEITHER HAD ANY VOTING RIG HTS NOR RIGHT TO SHARE IN PROFIT OF THE ORGANIZATION. ACCORDING TO THE ASSESSING OFF ICER THIS VIOLATED THE PRINCIPLE OF MUTUALITY WHICH WAS THE PRIMARY REQUISITE FOR CLAI MING DEDUCTION U/S 80P. THE ASSESSING OFFICER ALSO OBSERVED THAT THE ASSESSEE W AS ENGAGED IN PURE BANKING ITA.NO.1208/K/2012 TAMLUK TOWN CO-OPERATIVE CREDIT SOC IETY LTD. A.YR.2007-08 2 ACTIVITIES AND ANY RESIDENT OF TAMLUK COULD BECOME ITS MEMBER AND AVAIL ITS FACILITY. THUS THERE WAS NO CONCEPT OF EXCLUSIVITY ALSO WHI CH WAS ALSO A REQUIREMENT FOR CLAIMING DEDUCTION U/S 80P. HE THEREFORE DID NOT GRANT DEDUCTION U/S 80P TO THE ASSESSEE. 4. BEFORE THE LD. CIT(A) IT WAS SUBMITTED THAT PROV ISION OF W.B.CO-OPERATIVE SOCIETY ACT 1940 ALLOW THE SOCIETY TO ADMIT NOMINA L MEMBERS AND THEREFORE ENROLLING A PERSON AS NOMINAL MEMBER DOES NOT VIOLATE PRINCIP LE OF MUTUALITY. IT WAS FURTHER SUBMITTED THAT RIGHT TO MEMBERSHIP WAS RESTRICTED T O A SMALL GEOGRAPHIC AREA WHICH ITSELF BROUGHT CERTAIN EXCLUSIVITY. IT WAS FURTHER SUBMITTED THAT IN EARLIER ASSESSMENT YEARS THE APPELLATE AUTHORITIES HAVE ALLOWED DEDUCT ION U/S 80P OF THE ACT TO THE ASSESSEE. CONSIDERING THE ABOVE THE LD. CIT(A) DELE TED THE ADDITION AND HELD AS UNDER :- 5. FROM PERUSAL OF THE ASSESSMENT ORDER IT IS SEE N THAT THE ASSESSING OFFICER HAS DENIED THE APPELLANTS CLAIM FOR DEDUCTION U/S 80P ON THE GROUND THAT IT DOES NOT OBSERVE THE PRINCIPLES OF MUTUALITY AND EXCLUSIVITY. HOWEVE R THE CONCERN OF THE ASSESSING OFFICER IS MISPLACED AS THE APPELLANT HAS NOT CLAIM ED ITS INCOME AS EXEMPT UNDER THE GENERAL PRINCIPLE OF MUTUALITY. RATHER IT HAS CLAI MED SPECIFIC DEDUCTION PRESCRIBED U/S 80P OF I.T.ACT 1961. THEREFORE WHAT IS MATERIAL I S NOT ADHERENCE OR OTHERWISE OF THE APPELLANT TO THE CONCEPTS OF MUTUALITY AND EXCLU SIVITY BUT WHETHER IT SATISFIES THE CONDITIONS FOR AVAILING DEDUCTION AS PRESCRIBED U/S 80P WHICH CONTRARY TO THE POSITION TAKEN BY THE ASSESSING OFFICER DO NOT MENTION ANYT HING ABOUT THE AFORESAID CONCEPTS. IN FACT COOPERATIVE BANKS ARE NOT ENTIRELY COVERED BY PRINCIPLE OF MUTUALITY AS THEY REGULARLY CARRY OUT TRANSACTIONS SUCH AS INVESTMEN T IN GOVERNMENT SECURITIES ETC. WHICH ARE ESSENTIALLY WITH EXTERNAL AGENCIES BUT ARE STI LL ENTITLED FOR DEDUCTION U/S 80P. MOREOVER THE ENTIRE BASIS OF THE ASSESSING OFFICER S BELIEF THAT THE APPELLANT WAS NOT OBSERVING THE PRINCIPLES OF MUTUALITY AND EXCLUS IVITY WAS THAT IT ADMITS ANY RESIDENT OF TAMLUK AS NOMINAL MEMBER AND EXTENDS ITS FACILIT IES TO HIM AND ACCORDING TO THE ASSESSING OFFICER NOMINAL MEMBER CANNOT BE CALLED M EMBER OF THE SOCIETY. IT IS SEEN THAT THIS ISSUE WAS ALSO INVOLVED IN ASSESSMENT YEAR 200 3-04 IN WHICH THE ASSESSING OFFICER HAD DENIED CLAIM FOR DEDUCTION U/S 80P ON INCOME RE CEIVED FROM NOMINAL MEMBERS ON SIMILAR REASONING. THE APPEAL (NO.181/CIT(A)-XXXIII /ACIT.CIR/HAL/2005-06/CAL) AGAINST THE SAID ASSESSMENT ORDER WAS DECIDED BY MY PREDECESSOR VIDE HIS ORDER DATED 28-09-2006. IN THIS ORDER HE HAD AFTER ANALYZING THE LEGAL POSITION IN DETAIL ALLOWED DEDUCTION U/S 80P IN RESPECT OF INCOME RECEIVED FRO M NOMINAL MEMBERS AS THE NOMINAL MEMBERS WERE ALSO MEMBERS AND THEY COULD NOT BE TRE ATED AS NON-MEMBERS. MOREOVER THE SAID ORDER WAS CONFIRMED BY ITAT D BENCH VIDE HIS ORDER DATED 16 TH FEBRUARY 2007 IN ITA NO.2008/KOL/2006. IN LIGHT OF THE RATIO OF THESE DECISIONS ADMISSION OF NOMINAL MEMBERS DOES NOT DIS-ENTITLE THE APPELLANT FROM CLAIM OF DEDUCTION U/S 80P. 6. AS THE FACTS IN THE YEAR UNDER PRESENT APPEAL A RE ESSENTIALLY SAME AS IN A.Y.2003-04 RESPECTIVELY FOLLOWING RATIO OF THE OR DERS OF MY LD.PREDECESSOR AND ITA.NO.1208/K/2012 TAMLUK TOWN CO-OPERATIVE CREDIT SOC IETY LTD. A.YR.2007-08 3 HONBLE TRIBUNAL THE ASSESSING OFFICER IS DIRECTED TO ALLOW DEDUCTION U/S 80P TO THE APPELLANT. AGAINST THE ABOVE THE REVENUE IS IN APPEAL BEFORE U S. 5. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE ISSUE IS SQUARELY COVER ED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.YRS. 2003-04 2004-05 AND 2006-07 WHEREIN THE LD. CIT(A) DELETED THE CONCERNE D DISALLOWANCE AND ITAT DISMISSED THE SECOND APPEAL FILED BY THE REVENUE. H E FURTHER SUBMITTED THAT FOR A.YR.2005-06 INCOME TAX DEPARTMENT ACCEPTED THE ORD ER OF CIT(A) AND DELETED THE CONCERNED DISALLOWANCE AND NO SECOND APPEAL WAS FIL ED. THE LD. DR ON THE OTHER HAND RELIED ON THE ORDER OF AO. HOWEVER HE COULD NOT CONTROVERT THE SUBMISSION THAT ITAT IN ASSESSEES OWN CASE IN EARLIER YEARS HAD DE CIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. 5.1. WE HAVE CONSIDERED THE SUBMISSIONS AND PERUSED THE RECORDS. WE FIND THAT ITAT IN ASSESSEES OWN CASE IN EARLIER YEARS IN ITA NO.208/KOL/2006 FOR A.YR. 2003- 04 VIDE ORDER DATED 16.02.2007 IN ITA NO.1360/KOL/ 2007 FOR A.YR.2004-05 VIDE ORDER DATED 03.09.2007 AND IN ITA NO.229/KOL/2010 F OR A.YR.2006-07 VIDE ORDER DATED 18.03.2010 HAD DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. SINCE IT HAS NOT BEEN SUBMITTED THAT THE AFORESAID DECISIONS OF THE TRIBU NAL HAS NOT BEEN SET ASIDE BY THE HONBLE HIGH COURT WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A). ACCORDINGLY WE UPHOLD THE SAME. 6. IN THE RESULT THE APPEAL OF THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 05.11.2014. SD/- SD/- [ MAHAVIR SINGH ] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 05.11.2014. R.G.(.P.S.) ITA.NO.1208/K/2012 TAMLUK TOWN CO-OPERATIVE CREDIT SOC IETY LTD. A.YR.2007-08 4 COPY OF THE ORDER FORWARDED TO: 1. TAMLUK TOWN CO-OPERATIVE CREDIT SOCIETY LTD. PADUM BASAN TAMLUK PURBA MEDINIPUR-721636. 2 A.C.I.T. CIRCLE-HALDIA. 3 . CIT(A)-XXXIII KOLKATA. 4. CIT KOLKATA 5. CIT(DR) KOLKATA BENCHES KOLKATA. TRUE COPY BY ORDER ASST. REGISTRAR ITAT KOLKATA BENCHES