COMMISSIONER OF INCOME TAX JALANDHAR-II vs. M/S SULTANPUR LODHI PRIMARY COOP.

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ITA/323/2010HC Punjab & HaryanaPHHC01093245201004 August 2010Bench: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The Court noted that the learned counsel for the Revenue fairly conceded that the matter was covered against the Revenue by a judgment of the High Court dated 2.2.2010 in I.T.A. No.594 of 2009, CIT Vs. M/s Shivalik Kshetriya Gramin Bank. Consequently, in view of this binding precedent, the appeal was dismissed without delving into the merits of the specific questions raised. The judgment did not provide a specific finding on each of the three issues raised, nor did it detail the reasoning of the ITAT or the High Court beyond the reliance on the previous judgment. No issue was expressly left undecided. The operative direction was the dismissal of the appeal.

What were the facts?

The Revenue, through the Commissioner of Income Tax, filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order dated 25.9.2009 passed by the Income Tax Appellate Tribunal (ITAT), Amritsar. The appeal challenged the ITAT's confirmation of the CIT(A)'s order on several issues. The assessee is M/s Sultanpur Lodhi Primary Co-op. Agri. Dev. Bank Ltd. The assessment year(s) are not explicitly stated in the provided text. The core dispute revolves around disallowances made by the Assessing Officer (AO) concerning interest payments and deductions under Section 80P.

What were the issues?

The Tribunal was asked to decide the following substantial questions of law: 1. Whether the ITAT was right in confirming the CIT(A)'s order regarding the disallowance of interest amounting to Rs. 8,69,190/- made by the AO on deposits/investments with SADB, when the assessee paid interest to SADB of Rs. 84,79,910/- without charging the same on deposits/investments with SADB. 2. Whether the ITAT was right in dismissing the Revenue's appeal concerning the disallowance of deduction under Section 80P on notional interest calculated by the AO on the investment of surplus reserves, where such investment is not governed by statutory provisions for carrying on the business of banking. 3. Whether the ITAT was right in dismissing the Revenue's appeal regarding the disallowance of deduction under Section 80P on the said notional interest calculated by the AO, in relation to amounts/investments other than statutory reserves, when the Supreme Court had set aside a similar issue to the file of the CIT(A) in the case of Mehsana District Co-op Bank Ltd. Vs. ITO (251 ITR 522). Contentions: The Revenue argued for the disallowance of interest and deduction under Section 80P on the grounds stated in the questions. The assessee's contentions are not explicitly detailed but are implied by the ITAT's confirmation of the CIT(A)'s order. The Revenue relied on the Supreme Court's decision in Mehsana District Co-op Bank Ltd. Vs. ITO.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 80P

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No.323 of 2010 (O&M) Date of decision: 4.8.2010 The Commissioner of Income Tax. -----Appellant. Vs. M/s Sultanpur Lodhi Primary Co-op. Agri. Dev. Bank Ltd. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Vivek Sethi, Standing counsel for the Revenue. --- ADARSH KUMAR GOEL, J.

This appeal has been preferred by the revenue under Section 260-A of the Income Tax Act, 1961 against the order dated 25.9.2009 in I.T.A. No.311(Asr)/2009 passed by the Income Tax Appellate Tribunal, Amritsar, proposing to raise following substantial question of law:- “(i) Whether the Hon’ble ITAT is right in confirming the order of Ld. CIT(A) on the issue of disallowance of interest made by the A.O. at Rs.8,69,190/- on deposits/investments with SADB when the assessee paid interest to SADB at Rs.84,79,910/- without charging the same on deposits/investments with SADB.

I.T.A. No.323 of 2010 (ii) Whether the Hon’ble ITAT is right in dismissing the appeal of the revenue on the issue of disallowance of deduction u/s 80P on notional interest calculated by the A.O. on investment of surplus reserves where such investment is not governed by any statutory provisions for carrying on the business of banking. (iii) Whether the Hon’ble ITAT was right in dismissing the appeal of the revenue on the issue of disallowance of deduction u/s 80P on the said notional interest calculated by A.O. viz- a-viz amounts/investments other than statutory reserves when the Hon’ble Supreme Court has set aside the similar issue to the file of CIT(A) in the case of Mehsana District Co-op Bank Ltd. Vs. ITO 251 ITR 522.” Learned counsel for the Revenue fairly states that the matter is covered against the Revenue by judgment of this Court dated 2.2.2010 in I.T.A. No.594 of 2009 CIT v. M/s Shivalik Kshetriya Gramin Bank.

In view of above, this appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE August 04, 2010 ( AJAY KUMAR MITTAL ) ashwani JUDGE 2

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