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Income Tax Appellate Tribunal, “SMC-C” BENCH : BANGALORE
Before: SHRI SUNIL KUMAR YADAV
Per Sunil Kumar Yadav, Judicial Member
This appeal is preferred by the revenue against the order of CIT(A), interalia, on the following ground:
1. The order of the learned CIT(A) is opposed to law and facts of the case.
2. Whether on the facts and circumstances of the case, the CIT(A) was justified in law in allowing deduction u/s.80P(2)(a)(i) of the Act to the co-operative society carrying on the business of baking, inspite of the fact that clause no.(4) of section 80P inserted with effect from 01.04.2007 clearly bars the co- operative society from the above deduction, other than a primary agricultural credit society or a primary co-operative agricultural and rural development bank".
3. Whether the CIT(A) is correct in law in following the decision of the ITAT in assessee's own case for AY 2010-11, against which further appeal has been filed by the Department before the Hon'ble High Court?"
4. The CIT(A) has erred in following the judgments of jurisdictional High Court, Dharwad Bench in the case of Sri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha, Bagalkot in which has not become final since the some has not been accepted by the Department and Review Petition is pending before the Hon'ble High Court?"
5. For these and other grounds that may be urged at the time of hearing, it is prayed that the order of the CIT(A) in so for as it relates to the above grounds may be reversed and that of the Assessing Officer may be restored.
6. The appellant craves leave to add, alter, amend and/or delete any of the grounds mentioned above.
During the course of hearing, the learned counsel for the assessee invited our attention to the order of the CIT(A) with the submission that CIT(A) has adjudicated the issue following the judgment of the jurisdictional High Court in the case of Tumkur Merchants Souharda Credit Cooperative Ltd., vs ITO, Shri. Biluru Merchants Co-op Credit Society Ltd., Vs. CIT. Besides CIT(A) has also followed the other judgments of different High Courts in this regard. Since the CIT(A) has decided the issue in the light of the judgment of jurisdictional High Court, no interference therein is called for.
The learned DR, on the other hand, has submitted that the AO while making the disallowance of the deduction under section 80P, has taken into account the distinguished facts and the bye laws of the cooperative societies. Since the assessee was engaged in banking activities, the AO disallowed the deduction claimed under section 80P(2)(a)(i) of the Income Tax Act.
Having carefully examined the orders of the authorities below, in the light of rival submissions, we find that the assessee is a cooperative society registered under cooperative societies Act and has claimed deduction under section 80P, on an income by way of interest earned from its members on the loan advanced to them. The AO denied the deduction under section 80P(2)(a)(i) of the Act claimed by the assessee on the ground that the assessee is engaged in banking activities. But the CIT(A) re-examined the claim of the assessee in the of Hon’ble Gujarat High Court and was of the view that the assessee’s income earned in the course of providing credit facilities to its members is eligible for deduction under section 80P(2)(a)(i) of the Act.
During the course of hearing, the learned DR could not specifically point out any specific defect in the order of the CIT(A). Since the CIT(A) decided the issue following the judgment of Hon’ble jurisdictional High Court, I find no infirmity therein. Accordingly, I confirm his order.
In the result, the appeal of the revenue stand dismissed.
Pronounced in the open court on 26th May, 2017.