CIT, JALANDHAR vs. M/S SHIVALIK KSHETRIYA GRAMIN BANK

PDF · subscribers
ITA/81/2010HC Punjab & HaryanaPHHC01093782201030 March 2010Author: MR. JUSTICE M.M. KUMAR,MR. JUSTICE JITENDRA CHAUHAN2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the matter was no longer res integra, referencing its own prior judgment in Commissioner of Income Tax v. Nawanshahar Central Co-operative Bank Ltd. ([2003] 263 ITR 320). In that case, the Court had held that deduction under Section 80P(2)(a)(i) was admissible for interest income on government securities, debentures, bonds, Kisan Vikas Patras, and C.D.s of IDBI, considering these investments as statutory. The Court noted that the Tribunal's view in the present case aligned with this precedent. It was also conceded that a Special Leave Petition against the Nawanshahar judgment was dismissed by the Supreme Court. Furthermore, a similar appeal by the Revenue for earlier assessment years (2002-03 to 2004-05) against the same assessee was dismissed by a Division Bench of the High Court on February 2, 2010. Therefore, the present appeal was dismissed.

What were the facts?

The Revenue, Commissioner of Income Tax, Jalandhar, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated July 3, 2009, passed by the Income Tax Appellate Tribunal, Amritsar Bench. The appeal pertains to the assessment year 2005-06 and challenges the Tribunal's decision regarding the assessee bank's claim for deduction under Section 80P(2)(a)(i). The assessee is M/s Shivalik Kshetriya Gramin Bank, Hoshiarpur. The dispute involves income earned from the utilization of statutory and voluntary reserves, and locker rent.

What were the issues?

The High Court was asked to decide the following questions of law: 1. Whether the Tribunal was correct in disallowing the assessee bank's claim for deduction under Section 80P(2)(a)(i) concerning income earned from the utilization of its statutory reserves as per Section 67(2) of the Gujarat Cooperative Societies Act, 1961. 2. Whether the assessee bank is entitled to claim deduction under Section 80P(2)(a)(i) for income derived from the utilization of its voluntary reserves, excluding statutory reserves. 3. Whether the Tribunal was correct in holding that locker rent is not deductible under Section 80P(2)(a)(i). The Revenue contended that the Tribunal erred in its findings on these issues. The judgment does not record specific arguments from the assessee, but it references a concession made by the Revenue.

Which sections of the Income-tax Act were involved?

Section 260A,Section 80P(2)(a)(i),Section 67(2)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

Date of Decision: March 30, 2010 Commissioner of Income Tax, Jalandhar …Appellant Versus M/s Shivalik Kshetriya Gramin Bank, Hoshiarpur …Respondent CORAM: HON'BLE MR. JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE JITENDRA CHAUHAN Present: Mr. Vivek Sethi, Advocate, for the appellant-revenue.

1.

To be referred to the Reporters or not?

2.

Whether the judgment should be reported in the Digest? M.M.KUMAR, J. The Revenue has approached this Court under Section 260A of the Income Tax Act, 1961 (for brevity 'the Act') challenging order dated 3.7.2009 passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (for brevity 'the Tribunal') in ITA No. 268(ASR)/2009 in respect of the assessment year 2005-06. The following questions of law have been sought to be raised for determination of this Court:- i)Whether the Tribunal was right in law in disallowing the claim of the assessee bank for deduction u/s 80(P) (2)(a)(i) in respect of income earned from utilization of its reserve funds being statutory reserves u/s 67(2) of the Gujarat Cooperative Societies Act, 1961 ? ii)Whether the assessee bank is entitled to claim deduction under Section 80(P)(2)(a)(i) in respect of income earned from utilization of its voluntary reserves other than the statutory reserves mentioned above ?

iii)Whether the Tribunal was right in law in holding that the locker rent is not deductible under Section 80P(2)(a)(i) ? The matter is no longer res integra. This Court in the case of Commissioner of Income Tax v. Nawanshahar Central Co-operative Bank Ltd., [2003] 263 ITR 320, has held that deduction under Section 80P(2)(a)(i) of the Act, on account of interest income on Government securities, debentures, bonds, Kisan Vikas Patras and C.D. of IDBI was admissible. The investment in the said bonds has been held to be statutory investment in accordance with Section 44 of the Punjab Co-operative Societies Act, 1961 and, thus, eligible for deduction under Section 80P (2)(a)(i) of the Act. The view taken by the Tribunal is in accordance with the above judgment of this Court. It is also conceded position that the Special Leave Petition against the aforementioned judgment, has been dismissed by Hon’ble the Supreme Court. Moreover, a Division Bench of this Court has already dismissed a similar appeal, bearing ITA No. 594 of 2009, on 2.2.2010, which was filed by the appellant- revenue against the assessee-respondent in respect of earlier assessment years 2002-03 to 2004-05. Accordingly, this appeal fails and the same is dismissed. (M.M. KUMAR) JUDGE (JITENDRA CHAUHAN) March 30, 2010 JUDGE okg

More judgments on Section 80P(2)(a)(i)

All 2,347 judgments and leading authorities on Section 80P(2)(a)(i) →

Recent GST High Court judgments

Search GST case law →