The ITO, Ward 1 (2), JUNAGADH v. Junagadh Jilla Sahakari Bank Ltd, JUNAGADH

ITA 1230/RJT/2010 | 2002-2003
Pronouncement Date: 07-01-2011 | Result: Dismissed

Appeal Details

RSA Number 123024914 RSA 2010
Assessee PAN AAAAJ0397E
Bench Rajkot
Appeal Number ITA 1230/RJT/2010
Duration Of Justice 2 month(s) 17 day(s)
Appellant The ITO, Ward 1 (2), JUNAGADH
Respondent Junagadh Jilla Sahakari Bank Ltd, JUNAGADH
Appeal Type Income Tax Appeal
Pronouncement Date 07-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted SMC
Tribunal Order Date 07-01-2011
Assessment Year 2002-2003
Appeal Filed On 20-10-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH SMC RAJKOT BEFORE SHRI A.L. GEHLOT (AM) I.T.A. NO. 1230 & 1228/RJT/2010 (ASSESSMENT YEARS 2002-03 & 2003-04) ITO WD.1(2) VS JUNAGADH JILLA SAHAKARI BANK LTD JUNAGADH SAHAKAR BHAVAN OP ST JUNAGADH PAN : AAAAJ0397E (APPELLANT) (RESPONDENT) REVENUE BY : SHRI JAI RAJ KUMAR ASSESSEE BY : SHRI KARDAM JOSHI O R D E R A.L. GEHLOT : THESE APPEALS BY REVENUE ARE DIRECTED AGAINST THE ORDERS OF CIT(A)-IV RAJKOT BOTH DATED 02-07-2010 FOR THE ASS ESSMENT YEARS 2002-03 & 2003-04. THE FOLLOWING COMMON EFFECTIVE GROUND IS RAISED IN THE APPEALS: 1. THE LD.CIT(A)-IV RAJKOT HAS ERRED IN LAW AND O N FACTS IN DIRECTING THE AO TO ALLOW THE DEDUCTION U/S 80P(2)( A)(I) ON INTEREST RECEIVED FROM SSNNL BONDS AMOUNTING TO RS.170510/- (AY 2002- 03) RS. 291323/- (AY 2003-04). 2. APPEAL FOR ASSESSMENT YEAR 2002-03 IS BELATED BY 03 DAYS AND APPEAL FOR ASSESSMENT YEAR 2003-04 IS BELATED BY 06 DAYS. AFT ER HEARING THE LEARNED REPRESENTATIVES OF THE PARTIES AND IN THE INTEREST OF JUSTICE THE DELAY IS CONDONED. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E A CO-OPERATIVE BANK REGISTERED UNDER THE CO-OPERATIVE SOCIETY ACT HAS F ILED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2002-03 ON 29-10-2002 DECLARING TOT AL INCOME AT NIL AND FOR THE ASSESSMENT YEAR 2003-04 ON 10-10-2003 ALSO DECLARIN G TOTAL INCOME AT NIL. THE ASSESSING OFFICER HOWEVER DETERMINED AN INCOME OF RS. 1 70 510 FOR ASSESSMENT YEAR 2002-03 AND RS. 2 91 320 FOR ASSES SMENT YEAR 2003-04 IN HIS ORDERS DATED 28-12-2004 AND DATED 05-01-2006 RESPE CTIVELY PASSED U/S 143(3) OF THE ACT. THE ASSESSING OFFICER DISALLOWED DEDUC TION U/S 80P(2)(A)(I) OF THE ACT ITA NO.1230 & 1228/RJT/2010 2 CLAIMED ON INTEREST FROM SSNNL BONDS AMOUNTING TO R S. 1 50 510 & RS. 2 91 323 RESPECTIVELY. THE CIT(A) ALLOWED THE CLAI M OF THE ASSESSEE FOLLOWING THE ORDER OF ITAT RAJKOT IN THE CASE OF RAJKOT NAG RIK SAHAKARI BANK LTD V. ITO IN ITA NO.202 AND 201/RJT/2005 DATED 08-08-2005 FOR AY 2001-02 AND 2000-01. THE RELEVANT FINDINGS OF THE CIT(A) ARE REPRODUCED AS BELOW: 3.3 I HAVE GONE THROUGH THE FACTS OF THE CAS E AND HAVE CONSIDERED THE SUBMISSIONS MADE BY THE AR. IN THE INSTANT CASE IT WILL BE SEEN THAT APPELLANT IS A CO-OPERAT IVE SOCIETY ENGAGED IN THE BANKING BUSINESS. MAIN SOURCE OF IN COME IS INTEREST ON LOAN AND ALSO ADVANCES MADE TO ITS MEMB ERS. THE APPELLANT HAS ALSO TRADED IN SECURITIES AND THE INV ESTMENT IN SECURITIES IS ALSO MADE IN ACCORDANCE WITH THE STAT UTORY NORMS LAID DOWN BY THE R.B.I. NOT ONLY THIS SECTION 6(1)(A) OF THE BANKING REGULATION ACT CLEARLY LAYS DOWN THAT DEALING IN SE CURITIES AND INVESTMENT OF ALL KINDS COME UNDER THE PREVIEW OF O RDINARY BANKING BUSINESS F A BANK. ALL THESE ISSUES HAVE BEEN VERY ELABORATELY DISCUSSED BY THE HONBLE ITAT IN THE CASE OF RAJKOT NAGRIK SAHAKARI BANK LTD (SUPRA) AND THE HONBLE ITAT VER Y CLEARLY LAID DOWN THAT WHEN THE BANK HAS DEALT IN GOVERNMENT SEC URITIES WHICH ARE APPROVED BY THE RBI AND TRADING IN THIS SECURIT IES IS LARGELY GOVERNED BY THE DIFFERENT LIQUIDATING REQUIREMENTS OF THE BANK THEREFORE THE DEDUCTION U/S 80P(2)(A)(I) OF THE I. T. ACT IS TO BE ALLOWED IN VIEW OF THE FINDINGS CONTAINED ABOVE SAI D AND THE DECISION OF THE HONBLE ITAT AS ALSO THE CASE LAWS DISCUSSED IN THE SAID ORDER. THEREFORE I HOLD THAT THE AO WAS NOT CORRECT IN DENYING DEDUCTION U/S 80P(2)(A)(I) OF THE I.T. ACT IS TO BE ALLOWED IN VIEW OF THE FINDINGS CONTAINED ABOVE SAID AND THE D ECISION OF THE HONBLE ITAT AS ALSO THE CASE LAWS DISCUSSED IN TH E SAID ORDER. THEREFORE I HOLD THAT THE AO WAS NOT CORRECT IN DE NYING DEDUCTION U/S 80P(2)(A)(I) OF THE I.T. ACT. THE AO IS DIRECT ED TO ALLOW DEDU8CTIN U/S 80P(2)(A)(I) ON INTEREST RECEIVED FRO M SSNNL BONDS AND HDFC CALL MONEY INTEREST AMOUNTING TO RS.274337 /-. THIS GROUND OF APPEAL IS ALLOWED. 4. AT THE OUTSET THE LD.AR OF THE ASSESSEE SUBMITT ED THAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY VARIOUS ORDERS OF THE ITAT SOME OF WHICH ARE ITA NO.800/RJT/2010 IN THE CASE OF AMRELI NAGRI K SAHKARI BANK LTD ORDER DATED 19-08-2010; AND ITA NO.799/RJT.2010 IN THE CA SE OF AMRELI JILLA MADHYASTA SAHKARI BANK LTD VS ITO WD.2(3) AMRELI ORDER DATED 19-08-2010. THE LD.AR HAS ALSO RELIED UPON THE FOLLOWING OTHER JUDGMENTS: ITA NO.1230 & 1228/RJT/2010 3 CIT VS BARODA PEOPLES CO-OPERATIVE BANK LTD 280 IT R 282 (GUJ); MEHSANA DISTRICT CENTRAL CO-OPERATIVE BANK LTD VS I TO251 ITR 522 (SC); CIT VS KARNATAKA STATE COOPERATIVE APEX BANK (2001) 169 CTR (SC) 486 MADHYA PRADESH CO-OPERATIVE BANK LTD VS ADDL CIT 21 8 ITR 438 (SC) 5. AFTER HEARING LEARNED REPRESENTATIVES OF THE PAR TIES I FIND THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY VARIO US ORDERS OF ITAT CITED SUPRA AS ALSO BY THE OTHER JUDGEMENTS RELIED UPON BY THE LD.AR OF THE ASSESSEE. THE CIT(A) HAS FOLLOWED VARIOUS ORDERS OF ITAT. IN THE CIRCUMSTANCE I DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A). THE ORDER OF CIT(A) IS UPHELD. THE APPEALS FILED BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07-01-2011. SD/- (A.L. GEHLOT) ACCOUNTANT MEMBER RAJKOT DT : 07 TH JANUARY 2011 PK/- COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A)-IV RAJKOT 4. THE CIT-III RAJKOT 5. THE DR (TRUE COPY) BY ORDER ASSTT.REGISTRAR ITAT RAJKOT