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Income Tax Appellate Tribunal, “C” BENCH, AHMEDABAD
Before: SHRI N.K. BILLAIYA & SHRI S.S. GODARA
PER S.S. GODARA, JUDICIAL MEMBER :
- These three assessee’s appeals for assessment years 2008-09, 2010-11 and 2011-12 arise against the CIT(A)-4, Vadodara’s orders dated 18.06.2015, 21.01.2014 and 13.10.2015; respectively, in case Nos.CAB/4- 276/2014-15, CAB/VI-262/2012-13 & CAB/4-274/2014-15, in proceedings under section 143(3) of the Income-tax Act, 1961; in short the “Act”.
Heard both the parties. Case file perused.
It emerges from assessee’s pleadings that it raises three substantive grievance(s) in principle. The first one is common wherein it seeks to challenge both the lower authorities’ action treating its alleged business income of Rs.2,36,05,880/-, Rs.2,54,90,395/- and Rs.6,78,18,287/- for assessment years 2008-09, 2010-11 and 2011-12; respectively, as income from other sources than business income. We advert to the relevant facts qua the instant issue. There is no dispute that the Reserve Bank of India
ITA Nos. 786/Ahd/ 14, 2678/Ahd/15 & 186/Ahd/16 A.Y :- 2008-09, 2010-11 & 2011-12 (banking sector regulatory body) had suspended assessee’s license on 30.07.2003. The assessee claimed to have derived the impugned income by recovering its old dues from its members/customers in the form of principal as well as interest. We notice from identical assessment findings that the Assessing Officer was of the view that the assessee was facing winding up proceedings through Official Liquidator. He therefore was of the opinion that it could not have been taken as engaged in banking business so as to be entitled for getting treated the above income as business. He therefore treated the same as income from other sources after concluding that the above receipts of interest on deposits and its own advances during liquidation period would not amount to business receipts.
The CIT(A) confirms the Assessing Officer’s action as under:- “4.3 I have considered the facts of the case as well as the order of the AO and the submission of the appellant. During the appellate proceedings, vide order sheet noting dated 05.09.2013, the appellant’s AR was requested to file copy of order appointing the liquidator. The same was filed on 05/12/2013. The appellant's main submission is that even after the cancellation of its banking license, it remains a Credit Co-operative Society and hence, is eligible for deduction u/s 80P(2)(a)(i) of the Act. It is also submitted that the liquidator has been appointed under section 107-108 of the Gujarat Co-operative Society Act, 1961 and accordingly, the reconstruction of the society can take place u/s 110(10) of the Act. In this regard, from the order dated 28.03.2007 of the