Commissioner Of Income Tax I vs. M/S M.P State Cooperative Housing Fedration Ltd

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ITA/36/2017HC Madhya Pradesh06 November 2019Bench: HON'BLE THE CHIEF JUSTICE2 pages
For Petitioner: Sanjay Lal
AI SummaryWithdrawn

What did the High Court hold?

The High Court noted that the tax effect in the present matter was Rs.26,39,647/-. In view of Circular No.17/2019 dated 8.8.2019, the learned counsel for the appellant-revenue stated that he had instructions to withdraw the present appeal. Consequently, the High Court dismissed the appeal as withdrawn. The Court clarified that it had not expressed any opinion on the merits of the controversy or on the substantial question of law. Such matters may be considered and decided in the future if the occasion arises.

What were the facts?

The Revenue, Commissioner of Income Tax I, filed an appeal before the High Court of Madhya Pradesh against an order dated 4.10.2016 passed by the Income Tax Appellate Tribunal (ITAT), Indore Bench. The ITAT had dismissed the Revenue's appeal in ITA No.02/Ind/2016. The substantial question of law admitted for determination concerned the assessee's entitlement to deduction under Section 80P(2)(a)(i) of the Income Tax Act, 1961, for interest income of Rs.87,98,824/- derived from fixed deposits and savings bank accounts. The Revenue contended that this income was from investment of surplus funds and not attributable to the assessee's business of providing credit facilities to its members.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT was justified in holding that the assessee was entitled to deduction under Section 80P(2)(a)(i) of the Income Tax Act in respect of interest income of Rs.87,98,824/- derived from fixed deposits and saving bank accounts, even when such income was in fact interest derived from investment of surplus funds lying idle and was not income attributable to the business of the assessee of providing credit facilities to its members? Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The interest income was derived from the investment of surplus funds lying idle and was not income attributable to the business of providing credit facilities to its members. The tax effect in the matter was Rs.26,39,647/-. The Revenue relied on Circular No.17/2019 dated 8.8.2019 issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Direct Taxes (Judicial Section).

Which sections of the Income-tax Act were involved?

Section 80P(2)(a)(i)

AI-generated summary — verify with the full judgment below

(AJAY KUMAR MITTAL) CHIEF JUSTICE (SANJAY YADAV) JUDGE The High Court Of Madhya Pradesh ITA-36-2017 (COMMISSIONER OF INCOME TAX I Vs M/S M.P STATE COOPERATIVE HOUSING FEDRATION LTD) Jabalpur, Dated : 06-11-2019 Shri Sanjay Lal, Advocate for the appellant. This appeal has been preferred by the appellant/Revenue against the order dated 4.10.2016 passed by the Income Tax Appellate Tribunal, Indore Bench, Indore in ITA No.02/Ind/2016, whereby the appeal filed by the Revenue was dismissed. This appeal was admitted on 4.4.2017 for determination of the following substantial question of law:- "Whether on the facts and in the circumstances of the case, the ITAT was justified in holding that the assessee entitled for deduction u/s 80P(2)(a)(i) of the I.T.Act in respect of the interest income of Rs.87,98,824/- derived from fixed deposits and saving bank account even when such income was in fact interest derived from investment of surplus funds lying idle and was not income attributable of the business of the assessee of providing credits facilities to its members?" Learned counsel for the appellant-revenue submits that the tax effect in the present matter is to the tune of Rs.26,39,647/- and in view of the Circular No.17/2019 dated 8.8.2019 issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Direct Taxes (Judicial Section), he has instruction to withdraw the present appeal. In view of aforesaid premise, this appeal is dismissed as withdrawn. However, it is clarified that this Court has not expressed any opinion on the merits of the controversy and on the substantial question of law, which may be considered and decided as and when occasion so arises. 1 ITA-36-2017 Digitally signed by CHRISTOPHER PHILIP Date: 2019.11.11 16:09:25 +05'30' C

2 ITA-36-2017

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