Principal Commissioner Of Income Tax vs. Jila Sahakari Kendriy Bank Maryadit

PDF · subscribers
ITA/28/2018HC Madhya Pradesh28 September 2018Bench: HON'BLE SHRI JUSTICE P.K. JAISWAL2 pages
For Petitioner: Veena Mandlik
AI SummaryDismissed

What did the High Court hold?

The High Court held that the learned ITAT had not committed any legal error in dismissing the appeal filed by the Revenue. The Court found that the issue involved was fully covered by its earlier order dated March 22, 2017, passed in ITA No.99/Ind/2016 for Assessment Year 2011-12. The Court also referred to its detailed order passed on the same day in ITA No.210/2017, stating that the reasoning in that order would apply mutatis mutandis to the present appeal. Consequently, the Court concluded that no substantial question of law was involved in the appeal. The appeal was dismissed in limine.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax, filed an appeal under Section 260-A of the Income Tax Act, 1961, against an order dated July 14, 2017, passed by the Income Tax Appellate Tribunal (ITAT). The ITAT had upheld an order by the Commissioner of Income Tax (Appeal) and dismissed the Revenue's appeal. The assessee, a cooperative bank, filed returns for assessment years 2009-2010, declaring total incomes of Rs.4,92,85,380/- and Rs.5,72,83,280/- respectively. The Assessing Officer made additions of Rs.3,08,00,030/- and Rs.2,97,27,581/- on account of interest subsidy paid by the assessee. The Commissioner (Appeal) deleted these additions, holding them as allowable expenditures, a decision affirmed by the ITAT.

What were the issues?

1. Whether the ITAT committed a legal error in dismissing the Revenue's appeal, thereby upholding the deletion of additions made on account of interest subsidy paid by the assessee? Assessee's Contention: The judgment does not record any specific contentions made by the assessee before the High Court. However, the Commissioner (Appeal) had noted that the assessee bank finances societies who in turn finance agriculturists. The deficit interest is made good by NABARD and the State Government. The interest subsidy reimbursed by NABARD for funds received from NABARD, which the assessee had to bear, was considered an allowable expenditure. Revenue's Contention: The Revenue appealed against the ITAT's order. The judgment does not explicitly detail the Revenue's arguments before the High Court, but it implies they disagreed with the ITAT's finding that the appeal had no merit and that no substantial question of law was involved.

Which sections of the Income-tax Act were involved?

Section 260-A

AI-generated summary — verify with the full judgment below

Indore, dated : 28.09.2018

Ms. Veena Mandlik, learned counsel for the appellant, Revenue.

Heard on the question of admission. O R D E R

This appeal has been filed by the Revenue u/s. 260-A of Income Tax Act, 1961 (hereinafter, for short, “the Act”) against the order dated 14.7.2017 passed by Income Tax Appellate Tribunal (ITAT) in ITA No.325/Ind/2017, whereby the learned ITAT has upheld the order passed by Commissioner, Income Tax and dismissed the appeal. 2. Facts, in short, are that the respondent/assessee which is a cooperative Bank filed the return declaring total income of Rs.4,92,85,380/- and Rs.5,72,83,280/- for the assessment year 2009-2010. The Assessing Officer made additions of Rs.3,08,00,030/- and Rs.2,97,27,581/- respectively, on account of interest subsidy paid by the assessee. 3. In an appeal, learned Commissioner, Income Tax (Appeal) noted that the assessee Bank is taking the finance from NABARD and financing the societies who are financing agriculturists. The assessee is charging interest @ 9% from societies. The societies are giving loan @ 5% to the agriculturists. The societies are required to charge @ 11% from farmers. The deficit interest @ 6% is made by NABARD @ 1.5% and the State Government grants @ 4.5%. The loans advanced by the assessee from its own funds carry a subsidy which is reimbursed by the THE HIGH COURT OF MADHYA PRADESH I.T.A. No. 28/2018 1 Principal Commissioner of Income Tax V/s. Jila Sahakari Kendra Bank Maryadit. NABARD. The subsidy @ 1.5% for the funds received from NABARD is required to be borne by the assessee and, therefore, held that the amount of Rs.3,08,00,030/- and Rs.2,97,27,581/- are allowable expenditures and deleted these additions. 4. Learned ITAT considering the fact that the issue involved in this appeal (ITA No.325/2017) is fully covered by order dated 22.3.2017 passed in ITA No.99/Ind/2016 (Assessment Year 2011- 12) and relying on the decision dated 22.3.2017, came to the conclusion that the appeal filed by the Revenue has no merit and dismissed the same. 5. Similar issue came up for consideration before this Court in ITA No.210/2017. Considering the reasonings assigned by us in the detailed order passed today in ITA No.210/2017, we are of the view that the learned ITAT has not committed any legal error in dismissing the appeal of the Revenue. No substantial question of law is involved in this appeal. The order passed by us today in ITA No.210/2017 shall apply mutatis mutandis to this appeal also. 6. Accordingly, this appeal fails and is hereby dismissed in limine.

( P.K. JAISWAL )

( VIVEK RUSIA ) JUDGE. JUDGE. Alok/- THE HIGH COURT OF MADHYA PRADESH I.T.A. No. 28/2018 2 Principal Commissioner of Income Tax V/s. Jila Sahakari Kendra Bank Maryadit. Digitally signed by Alok Gargav Date: 2018.09.29 16:49:12 +05'30'

More judgments on Section 260-A

All 2,570 judgments and leading authorities on Section 260-A →

Recent GST High Court judgments

Search GST case law →