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Income Tax Appellate Tribunal, “ SMC ” BENCH, AHMEDABAD loZJh egkohj izlkn] U;kf;d lnL; ,oa vejthr flag]
Before: SHRI MAHAVIR PRASAD & SHRI AMARJIT SINGH
आदेश / O R D E R
PER MAHAVIR PRASAD, JUDICIAL MEMBER : This is an appeal by the assessee against the order of the Commissioner of Income Tax(Appeals)-4, Vadodara, vide appeal no.CAB/4-114/2015-16 dated 20/06/2016 for the Assessment Year (AY) 2012-13.
Assessee has taken following grounds of appeals: “1. Ld. CIT (A) erred in law and on facts in confirming disallowance made by AO of Rs.30,18,636/- deduction claimed u/s 80P(2)(a)(i) of the Act. Ld. CIT (A) ought to have allowed deduction claimed of interest received from nationalized hanks on the operational funds by the appellant.
ITA No.2969/Ahd/2016 The Sardar Co-op Credit Society ltd. A.Y. 2012-13 - 2 - 2. Ld.CIT(A) erred in law and on the facts confirming disallowance by AO treating interest earned as income from other sources. Ld.CIT (A) ought to have held interest earned as profits & gains of business. 3. Ld.CIT(A) erred in law and on facts holding that interest derived by depositing surplus funds with nationalized banks is not attributable to the business carried on by the appellant credit society and hence not deductible u/s.80P(2)(a)(i)of the Act. 4. Ld.CIT (A) erred in law and on facts in not adjudicating ground # 3 of the appeal challenging action of AO disallowing Rs.2,26,492/- expenditure incurred by the appellant for earning of the income. 5. Ld.CIT(A) erred in law and on facts confirming disallowance of the claim of deduction relying on judgment rendered in revisionary proceedings not applicable to the facts of the case. Ld.CIT(A) ought to have appreciated ratio of the judicial citations directly on the issue & allowed deduction. 6. Levy of interest u/s.234A/234B/234C & 234D of the Act is not justified. 7. Initiation of penalty u/s 271(l)(c) of the Act is not justified.”
Briefly stated facts as culled out from the records are that the appellant is a Co-operative Credit Society engaged in the business of providing credit facilities to its members as per the by-laws of the society as approved under Government of Gujarat Co-operative Act. The appellant has filed return of income for the AY 2012-13 on 18/08/2012 declaring total income at Rs. Nil after claiming deduction u/s.80P(2) of the Act of Rs.15,26,216/- and the assessment order u/s.143(3) of the I.T. Act was finalized on 16/03/2015 and determining total income of Rs.14,76,220/-. Making disallowing Rs.30,18,636/- claimed by the appellant u/s.80(P)(2)(a)(i) of the I.T. Act.
Thereafter, appellant preferred an appeal against the said disallowance and ld. CIT(A) dismissed the appeal of the assessee.
We have gone through the relevant record and impugned order. Ld. AR cited an order of our co-ordinate bench in ITA
ITA No.2969/Ahd/2016 The Sardar Co-op Credit Society ltd. A.Y. 2012-13 - 3 - No.2814/Ahd/2016 for A.Y.2013-14 in the matter of Vadodara Mahanagar Seva Sadan Employees Co. Operative Credit Society Ltd. vs. Income Tax Officer, in which, it is held as under:
“4. We have gone through the relevant record and impugned order. In this case, interest amount of Rs.1,20,422/-, Rs.39,209/- & Rs. 471/- was received form Allahabad bank, Bank of Baroda and Baroda center Co-op. Bank respectively. From the details, it can be seen that the receipts of interest of Rs.1,20,422/- & Rs.39,209/- (totaling to Rs. 1,59,671/-) has been received from other than Co-operative organization i.e. from nationalized banks on FDRs, which is nothing but interest earned on surplus funds invested in bank deposits i.e. FDRs. 5. Ld. AR filed an order of co-ordinate bench in ITA No.2426/Ahd/2013 for A.Y.2009-10 dated 24/01/2017 wherein, similar issue was decided in favour of the assessee and it was held as below: “(3) Assessee will also be eligible to claim pro rata expenses for earning interest income of Rs.8,55,854/- assessee's claim of pro rata expenses of Rs.5,77,423/- against the interest income of Rs.8,55,854/- after due verification by the learned Assessing Officer. We, therefore, direct the Assessing Officer to verify assessee's claim of pro rata expenses by examining the record to be shown for verification by the assessee. Needless to mention proper opportunity of being heard is to be given to the assessee. We order accordingly. The appeal of the assessee is partly allowed for statistical purposes.” 6. Respectfully following the aforesaid order, we direct the Assessing Officer to verify the assessee’s claims of pro rata expenses by examination the record to be shown for verification by the assessee and accordingly, netting of to be allowed. 7. In the result, appeal filed by the assessee is allowed.”
Following the observation, we dispose off above said appeal. Accordingly, following the past precedence, we direct the assessing officer to verify the assessee’s claim of pro rata expenses by examination
ITA No.2969/Ahd/2016 The Sardar Co-op Credit Society ltd. A.Y. 2012-13 - 4 - the record to be shown for verification by the assessee and accordingly, netting of to be allowed by the ld. Assessing Officer.
In the result, appeal filed by the appellant is allowed. This Order pronounced in Open Court on 23/02/2018
Sd/- Sd/- vejthr flag vejthr flag vejthr flag महावीर �साद vejthr flag (लेखा सद�य) (�या�यक सद�य) ( AMARJIT SINGH ) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 23/02/2018 Priti Yadav, sr.PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)-4, Vadodara. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER, स�या�पत ��त //True Copy// उप/सहायक पंजीकार (Dy./Asstt.Registrar) आयकर अपील�य अ�धकरण, अहमदाबाद / ITAT, Ahmedabad