CIT, JALANDHAR vs. M/S BHOLATH PRIMARY COOP. AGRICULTURAL DEVEP

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ITA/80/2010HC Punjab & HaryanaPHHC01093772201018 February 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 deduction under Section 80P(2)(a)(i) of the Income-tax Act, 1961, on account of interest income on Government securities, debentures, bonds, Kisan Vikas Patras, and C.D. of IDBI was admissible. The reasoning was that the investment in these instruments was held to be statutory investment in accordance with Section 44 of the Punjab Cooperative Societies Act, 1961, making them eligible for deduction. The Court noted that this view was in accordance with a previous judgment of the High Court in Commissioner of Income Tax v. Nawanshahar Central Co-operative Bank Ltd., [2003] 263 ITR 320, against which the Special Leave Petition was dismissed by the Supreme Court. Furthermore, the Court observed that several similar appeals filed by the revenue had already been dismissed. Accordingly, the appeal filed by the revenue was dismissed.

What were the facts?

The appeal was filed by the Commissioner of Income Tax, Jalandhar (revenue) against the order dated 9.7.2009 passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar. The assessment year in dispute was 2004-05. The appeal challenges the Tribunal's decision allowing deduction under Section 80P(2)(a)(i) of the Income-tax Act, 1961, on interest income derived from investments in government securities, debentures, bonds, Kisan Vikas Patras, and Certificates of Deposit of IDBI. These investments were considered statutory in nature as per Section 44 of the Punjab Cooperative Societies Act, 1961. The revenue's Special Leave Petition against a similar High Court judgment was dismissed by the Supreme Court, and several other appeals filed by the revenue on identical issues were also dismissed by the High Court.

What were the issues?

1. Whether the assessee, M/s The Bholath Primary Co-op. Agricultural Development Bank Ltd., Kapurthala, is entitled to deduction under Section 80P(2)(a)(i) of the Income-tax Act, 1961, on interest income earned from statutory investments in government securities, debentures, bonds, Kisan Vikas Patras, and C.D. of IDBI for Assessment Year 2004-05? Assessee's Contention: The assessee would have argued that the investments were statutory and the income derived therefrom was eligible for deduction under Section 80P(2)(a)(i) as per the provisions of the Act and relevant judicial precedents. Revenue's Contention: The revenue contended that such interest income was not eligible for deduction under Section 80P(2)(a)(i).

Which sections of the Income-tax Act were involved?

Section 260A,Section 80P(2)(a)(i),Section 44

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

Date of Decision: February 18, 2010 The Commissioner of Income Tax, Jalandhar …Appellant Versus M/s The Bholath Primary Co-op. Agricultural Development Bank Ltd., Kapurthala …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. This appeal filed under Section 260A of the Income-tax Act, 1961 (for brevity, ‘the Act’) challenges orders dated 9.7.2009, passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (for brevity, ‘the Tribunal’) in ITA No. 308(ASR)/2009, in respect of Assessment Year 2004-05. Having heard learned counsel for the appellant-revenue and perus- ing the paper book with his able assistance, we found that 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-op- erative 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 of this Court, has been dis- missed by Hon’ble the Supreme Court. Moreover, a Division Bench of this Court has already dismissed similar appeals, bearing ITA No. 314 of 2005, on 1.8.2006, ITA Nos. 594, 595 and 596 of 2009, dismissed on 2.2.2010 and ITA Nos. 82 and 83 of 2010, dismissed on 16.2.2010, which were filed by the appel- lant-revenue. Accordingly, this appeal fails and the same is dismissed. (M.M. KUMAR) JUDGE (JITENDRA CHAUHAN) February 18, 2010 JUDGE Pkapoor 2

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