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IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS THE 30TH DAY OF OCTOBER, 2017 PRESENT THE HON’BLE MRS. JUSTICE S.SUJATHA AND THE HON’BLE Dr. JUSTICE H. B. PRABHAKARA SASTRY
INCOME TAX APPEAL NO.100010/2016
BETWEEN:
THE COMMISSIONER OF INCOME TAX, DR.B.R.AMBEDKAR VEEDHI, BELAGAVI. ... APPELLANT (BY SRI Y V RAVIRAJ, ADVOCATE)
AND
SHRI SANGAM SAHAKARI SAKKARE KARKANE NIYAMITH, HIDAKAL DAM TQ: HUKKERI, DIST: BELAGAVI PAN: AAAAS 7256 D. ... RESPONDENT (BY SRI GANGADHAR J.M., ADVOCATE)
THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260A OF THE INCOME TAX ACT, 1961, PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, PANAJI BENCH, PANAJI, IN ITA NO.174/PNJ/2014, DATED 08.06.2015 AND CONFIRM THE ORDER PASSED BY THE INCOME TAX OFFICER, WARD-1(1), BELAGAVI AND ETC.
THIS APPEAL COMING ON FOR ADMISSION THIS DAY, S.SUJATHA J., DELIVERED THE FOLLOWING:
2 JUDGMENT
This appeal is filed by the revenue under Section 260A of the Income Tax Act, 1961 (for short ‘the Act’) challenging the order of the Income Tax Appellate Tribunal dated 08.06.2015 in ITA No.174/PNJ/2014, raising the following substantial question of law “Whether the Tribunal was right in law and on the facts and circumstances of the case in allowing the deduction of the assessee society under Section 80P(2)(d) of the Act, when the facts clearly established the BDCC Bank is registered as a co-operative bank under the Banking Regulation Act, 1949 and as such interest or dividends from the investments made with the BDCC Bank is not entitled for claim of deduction under Section 80P(2)(d)?”
The assessee-respondent is a co-operative society engaged in the manufacture of sugar, for the assessment year 2009-10, assessments were concluded under Section 143(3) of the Act allowing the deduction
3 claimed under Section 89P(2)(d) of the Act. Subsequently, the Commissioner of Income Tax passed an order under Section 263 of the Act on the ground that the assessment concluded was erroneous as well as prejudicial to the interest of the revenue. It was held by the Commissioner that the claim made under Section 80P(2)(d) was allowed by the assessing officer without due verification of the facts and records. The appeal preferred by the assessee against the said order before the Income Tax Appellate Tribunal came to be allowed relying upon the judgment of this Court in the case of Sri Biluru Gurubasava Pattina Sahakari Sangha Niyamitha V/s CIT and the judgment rendered in the case of the Goa Shipyard Employees Co- operative Credit Society Limited V/s CIT. Aggrieved by the same, the revenue is in appeal.
We have heard the learned counsel Sri Y.V.Raviraj appearing for the revenue as well as the
4 learned counsel Sri Gangadhar J.M. appearing for the assessee-respondent.
The issue involved in this appeal is no longer res integra in view of the decision rendered by this Court in the case of Commissioner of Income Tax, Hubballi and another V/s the Totagars Co-operative Sale Society (ITA No.100066/2016) disposed off on 16.06.2017, wherein this Court has taken a view that the character of income depends upon the nature of activity for earning that income and though on the face of it, the same may appear to be falling in any of the specified Clauses of Section 80P(2) of the Act, but on a deeper analysis of the facts, it may become ineligible for deduction under Section 80P(2) of the Act. Thus, the substantial question of law raised by the revenue in the very same assessee’s case for the earlier assessment years is answered in favour of the revenue and against the assessee. The similar substantial question of law being raised by the revenue for the assessment year
5 2009-10, the same view has to be taken by this Court. Respectfully agreeing with the judgment of this Court in ITA No.100066/2016, we answer the substantial question of law in favour of the revenue and against the assessee.
The appeal of the revenue is accordingly allowed. No order as to costs.
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Sd/- JUDGE
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