Income Tax Officer Ward 2 1 Hubballi v. M S Agricultural College Employees Co Operative Crredit Society Ltd Dharwad

In The Income Tax Appellate Tribunal Bangalore Bench C Before Shri Jason P Boaz Accountant Member And Shri Lalit Kumar Judicial Member I T A No 1332 Bang 20 17 Assessment Year 20 14 15 Income Tax Officer Ward 2 1 Hubballi Appellant Vs M S Agricultur A L College Employees Co Operative Credit Society Ltd Uas Compound Dharwad Respondent A Ppellant By Dr P V Pradeep Kumar Acit D R R E Spondent By Shri Rajeev R Kulkarni Ca Date Of H Earing 13 12 2017 Date Of P Ronouncement 14 12 201 7 O R D E R Per Shri Jason P Boaz A M This Appeal By Revenue Is Directed Against The Order Of Commissioner Of Income Tax Appeals Hubli Dt 27 03 2017 For The Assessment Year 20 14 15 2 Briefly Stated The Facts Relevant For Disposal Of Th Is Appeal Are As Under 2 It A No 1332 Bang 201 7 2 1 The Assessee Is A Co Operative Credit Society Engaged In Providing Credit Facilities To I Ts Members Filed Its Return Of Income For Assessment Year 2014 15 On 19 9 2014 Declaring Ni L Income After Claiming Deduction Of Rs 32 78 608 Under Section 80 P 2 A I Of The Income Tax Act 1961 In Short The Act The Case Was Selected For Scrutiny And The Assessment Was Concluded Under Section 143 3 Of The Act Vide Order Dt 21 6 2016 Whe Rein The Assessees Income Was Determined At Rs 32 78 608 In View Of The Assessing Officer Denying The Assessees Claim For Deduction Under Section 80 P 2 A I Of The Act While Doing So The Assessing Officer Observed That Though The Issue Of Deduction Under Section 80 P 2 A I Of The Act As In The Case On Hand Was Held In Favour Of The Assessee And Against Revenue By The Decision Of The Honble Karnataka High Court In The Case Of Cit Vs Biluru Gurubasava Sahakari Pattina Sangha Niyamitha In Ita No 5006 2013 Dt 5 2 2014 He Was Making The Said Disallowance Of The Assessees Claim For Deduction Under Section 80 P 2 A I Of The Act Since The Department Has Filed Appeal Before The Honble Apex Court On This Issue Which Is Pending Disposal 2 2 Aggrieved By The Order Of Assessment Dt 21 6 2016 For Assessment Year 2014 15 The Assessee Preferred An Appeal Before The Cit Appeals Hubli The Learned Cit Appeals Vide The Impugned Order Dt 27 3 2017 Allowed The Assessees Claim For Deduction F Or Deduction Claimed Under Section 80 P 2 A I Of The Act And Consequently The Assessees Appeal Following The Decisions Of The Honble Karnataka High 3 It A No 1332 Bang 201 7 Court In Sri Biluru Gurubasava Sahakari Pattina Sangha Niyamitha Supra The Decision Of The Honble Karnataka High Court In Shri Chandraprabhu Urban Co Operative Credit Society Ltd In Ita No 100043 100045 Of 204 Dt 21 9 2015 And Of The Co Ordinate Bench Of This Tribunal In The Case Of Cit Vs Yeshwanthpur Credit Co Operative Society Ltd Ita No 737 B Ang 2011 3 1 The Revenue Being Aggrieved By The Order Of The Cit Appeals Has Filed This Appeal Before The Tribunal Wherein It Has Raised The Following Grounds Whether On The Facts And In The Circumstances Of The Case And In Law The Lea Rned Cit Appeals Hubballi Was Justified In Law In Holding That The Assessee Society Is Entitled To Deduction U S 80 P 2 A I Of The Income Tax Act Even When The Assessee Society Is Mainly Involved In Extending Credit Facilities To Its Members Which Is In The Nature Of A Bank Transaction Treated On Par With The New Clause Introduced In The Definition Of Income In Section 2 24 Viia Of The Act And Comes Under The Purview Of Section 80 P 4 W E F 1 4 2007 3 2 The Learned Departmental Representative Supported The Order Of The Assessing Officer 3 3 Per Contra The Learned Authorised Representative For The Assessee Submitted That The Impugned Order Of The Learned Cit Appeals Is To Be Upheld As He Rightly Followed The Binding Decision Of The Hon Ble Karnataka High Court In The Case Of Cit Vs Biluru Gurubasava Sahakari Pattina Sangha Niyamitha In Ita No 5006 2013 Dt 5 2 2014 While Allowing The Assessees Claim For Deduction U S 80 P 2 A I Of The Act 4 It A No 1332 Bang 201 7 3 4 1 We Have Heard The Rival Content Ions Perused And Carefully Considered The Material On Record Including The Orders Of The Authorities Below As Well As The Decisions Of The Honble Karnataka High Court In The Case Of Cit Vs Biluru Gurubasava Sahakari Pattina Sangha Niyamitha Supra In View Of The Fact That The Learned Cit Appeals Has Decided The Issue Of Assessees Claim For Deduction U S 80 P 2 A I Of The Act In Favour Of The Assessee Following The Above Mentioned Judgment Of The Honble Karnataka High Court Supra We Find No Infirmity In His Order 3 4 2 In The Case Of Shri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha Supra The Honble Karnataka High Court While Interpreting The Provisions Of Section 80 P 4 Of The Act Has Held As Under 5 It A No 1332 Bang 201 7 3 4 2 T He Honble Karnataka High Court Followed Its Own Decision In The Aforementioned Case Of Shri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha Supra On The Same Issue In Its Subsequent Decisions In The Case Of Bhavasar Ksh A Triya Co Op Credit Society Ltd In Ita No 100206 2015 Dt 6 1 2016 And Yeshwantpur Credit Co Operative Society Ltd In Ita No 237 2012 Dt 27 6 2014 Respectfully Following The Aforesaid Decisions Of The Honble Karnataka High Court Supra We 6 It A No 1332 Bang 201 7 Uphold The Order Of The Learned Cit Appeals In Directing The Assessing Officer To Allow The Assessee Deduction Claimed U S 80 P 2 A I Of The Act Consequently The Grounds Raised By Revenue Are Dismissed 4 In The Result Revenue S Appeal For Assessment Year 2014 15 Is Dismissed Order Pronounced In The Open Court On The 14th Day Of Dec 201 7 Sd Lalit Kumar Judicial Member Sd Jason P Boaz Accountan T Member Bangalore Dt 14 12 2017 Reddy Gp Copy To 1 Appellant 4 Cit A 2 Respondent 5 Dr Itat Bangalore 3 Cit 6 Guard File Senior Private Secretary Income Tax Appellate Tribunal Bangalore