Loading judgment…
No AI summary yet for this case.
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, “SMC” (D
Before: SHRI N.K. BILLAIYA & SHRI MAHAVIR PRASAD
आदेश / O R D E R
PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER : This is an appeal by the assessee against the order of the Commissioner of Income Tax(Appeals)- Gandhinagar, Ahmedabad, dated 12/06/2015, in the matter of assessment under section 143(3) of the Income tax Act, 1961 (‘the Act hereinafter’), for the Assessment Year (AY) 2012-13, on the grounds: i. The CIT(A) has erred in directing the AO to tax the whole interest income received by the appellant from Fixed Deposit of nationalized banks of Rs.19,54,732/- under the head income from
ITA No.2624/Ahd/2015 Shri Yogeswar Co-op credit Society vs. ITO Asst.Year –2012-13 - 2 - other sources u/s.56 of the Income Tax Act, 1961 by not granting deduction u/s.80P of the Act. ii. Without prejudice to the above, it is submitted that even if such interest income of Rs.19,54,732/- is taxable u/s.56 of the Act, then expenditure incurred for earning such income must be allowed u/s. 57 of the Act and Pro-rata Interest income received from fixed deposit with nationalized banks only can be taxed. It is submitted that the same be allowed now. 2. The relevant facts as culled out from the materials on record are as under:- The assessee is a co-operative credit society and its main purpose is to provide credit facility to members of the society by accepting deposits, savings etc. and providing loan and advances to its members.
2.2 On verification of the computation of total income, it is noticed that the assessee has not added back the following provisions debited in the Profit & Loss Account to arrive at gross total income eligible for deduction u/s.80P of the IT Act, and has straightaway claimed the net profit as deduction u/s.80P.
PF Expenses Rs. 18,288/- Building Fund Proof Rs. 1,00,000/- Gratuity Fund Rs. 25,000/- Sabhasad Prostahan Prov Rs.10,50,000/- Bad debts provision Rs. 90,000/- Gramvikas fund Rs. 25,000/- Rs.13,08,288/-
ITA No.2624/Ahd/2015 Shri Yogeswar Co-op credit Society vs. ITO Asst.Year –2012-13 - 3 - 2.3 On verification of Profit and Loss Account and details submitted by assessee, it is seen that the assessee has earned interest income other than Co-op Bank as under: i. Interest income from Dena Bank f.d. : Rs. 2,78,875/- ii. Bank of Baroda F.D. Interest : Rs.10,29,792/- iii. Dena bank Gramin Interest : Rs. 6,44,135/- iv. Bank of Baroda Saving : Rs. 1,838/- v. Bank of Baroda Saving Interest : Rs. 92/- Total : Rs. 19,54,732/-
Since the above interest income is not eligible for deduction u/s.80P of the I.T. Act, the case was discussed with assessee and the assessee was asked to show cause as to why the above interest income of Rs.19,54,732/- should not be taxed u/s.56 of the IT Act as “income from other sources”. The contention of the assessee to allow proportionate expenses was not entertained by CIT(A) on similar issue in assessee’s own case for A.Y. 2007-08. The AR of the assessee has been confronted on this issue but no written submission regarding objections was filed by the assessee.
2.4 Accordingly, addition of Rs.19,54,732/- was made.
Against the said order assessee preferred first statutory appeal before the learned CIT(A), who partly allowed the appeal of the assessee.
Now appellant’s appeal is before us.
ITA No.2624/Ahd/2015 Shri Yogeswar Co-op credit Society vs. ITO Asst.Year –2012-13 - 4 -
So far interest income received by the appellant from Fixed Deposit of nationalized banks of Rs.19,54,732/- under the head income from other sources u/s.56 of the Income Tax Act, 1961 is concerned. It is stated above that the assessee deposited the amount in nationalized bank not in Co-operative bank. So far interest income is not eligible for deduction u/s.80P of the I.T. Act. Therefore, we are not inclined to given any relief to the assessee with regard to Ground No.1.
So far Ground No.2 is concerned. Assessee incurred some expenses on the deposit for making FD and also incurred expenses with regard to interest etc. For this learned AR cited a judgment [2015] 58 taxmann.com 35 (Karnataka) in the matter of Totgars Co-operative Sale Society Ltd. vs. Income Tax Officer, in this case Hon’ble High Court held as under: “Section 57, read with section 56 and section 80P(1) of the Income-tax Act, 1961 - Income from other sources - Deductions (Administrative and other expenses) - Assessment years 1991-92 to 1999-2000 - Assessee was a co-operative society engaged in business of marketing agricultural produce and was also providing credit facilities to its members - It claimed benefit of deduction under section 80P(2)(a)(i) in respect of interest, earned on deposits kept with scheduled banks, Indra Vikas Patra, NSC etc. - Assessing Officer rejected assessee's claim and brought said interest income to tax under section 5 'Income from other sources' - Tribunal confirmed Assessing Officer's order - Assessee filed instant appeal seeking direction to pass fresh order by giving permissible deduction under section 57 - Whether on facts, only net interest income, i.e., interest income reduced by administrative expenses and other proportionate expenses to said income had to be brought to
ITA No.2624/Ahd/2015 Shri Yogeswar Co-op credit Society vs. ITO Asst.Year –2012-13 - 5 - tax under section 56 - Held, yes and assessee’s appeal was partly allowed by the Hon’ble High Court” 7. Respectfully, following the judgment of Hon’ble Karnataka High Court, the appellant is entitle for deduction of proportionate expenditure or actual expenditure which the appellant may have incurred in mobilizing the funds placed in deposit with the bank and the same needs to be calculated by the Assessing Authority. We remit this matter back to the file of the Assessing Officer who will examine the case of the assessee that how much expenditure he has incurred in mobilizing the funds and thereafter, Assessing Officer will pass an appropriate order. Therefore, we partly allow this appeal.
In the result, appeal filed by the assessee is partly allowed.
This Order pronounced in Open Court on 18/08/2017
Sd/- Sd/- एन.के. �ब�लैया महावीर �साद (लेखा सद�य) (�या�यक सद�य) ( N.K. BILLAIYA ) ( MAHAVIR PRASAD ) ACCOUNTANT MEMBER JUDICIAL MEMBER
Ahmedabad; Dated 18/08/2017 Priti Yadav, Sr. PS
ITA No.2624/Ahd/2015 Shri Yogeswar Co-op credit Society vs. ITO Asst.Year –2012-13 - 6 -
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)- Gandhinagar, Ahmedabad. �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 True Copy 1. Date of dictation 16/08/2017 (dictation-pad 4 pages attached at the end of this appeal-file) 2. Date on which the typed draft is placed before the Dictating Member …17/08/2017 3. Other Member… 4. Date on which the approved draft comes to the Sr.P.S./P.S…………….. 5. Date on which the fair order is placed before the Dictating Member for pronouncement…… 6. Date on which the fair order comes back to the Sr.P.S./P.S……. 7. Date on which the file goes to the Bench Clerk………………… 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order…………………….. 10. Date of Despatch of the Order………………