MALWA CO-OP L & C SOCIETY LTD,MUKTSAR vs. INCOME TAX OFFICER WARD-II(2), MUKTSAR

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER

I.T.A. No. 39/Asr/2018 Assessment Year: 2010-11

Malwa Coop. L & C Society Vs. Income Tax Officer, Ltd., Vill. Ghumiara, Sri Ward-II(2), Muktsar Muktsar Sahib. [PAN: AAAJT 1411E] (Appellant) (Respondent)

Appellant by : Sh. Tarun Bansal, Adv. & Sh. Lakshay Bansal, CA Respondent by: Sh. S. M. Surendranath, Sr. DR Date of Hearing: 17.05.2022 Date of Pronouncement: 11.08.2022

ORDER Per Anikesh Banerjee, JM:

The instant appeal was filed by the assessee against the order passed by the Ld. Commissioner of Income Tax (Appeals), Bathinda [in brevity the CIT(A)],

bearing Appeal No. 187/15-16 dated 23.11.2017 u/s 250(6) of the Income Tax Act, 1961 [in brevity the Act], in respect of Assessment Year 2010-11. The impugned order was generated from the order of the ld. Income Tax Officer, Ward-2(2),

Muktsar [in brevity the A.O.] passed u/s 143(3) of the Act, dated 28.09.2015.

2 ITA No. 39/Asr/2018 Malwa Coop. L & C Society Ltd. v. ITO 2. Brief fact of the case is that the assessee was assessed u/s 143(3) of the Act.

The assessment was made as per the direction of coordinate Bench of ITAT

Amritsar bearing ITA No. 483/Asr/2014 dated 13.10.2014. The coordinate Bench

had made the following observation which is extracted as below:

“6. I have heard the rival contentions and perused the facts of the case. There is no dispute to the fact that the AO has completed assessment on 28.03.2013 after providing opportunity on 25.03.2013 for producing books of account and expenditure vouchers. Therefore, in my view, the assessee has not allowed adequate opportunity of being heard and the assessment has been made in a hasty manner. Though, the AO has mentioned that the assessee has not produced complete vouchers bearing complete address of the labour to verify the expenses claimed. It is also not in dispute that the AO without discussing the disallowance of deduction u/s 80P(2)(a)(vi) went on to allow deduction u/s 80P(2)(c) of the Act at V 50.000/- without discussing anything in the main body of the order but has simply allowed deduction of Rs.50,000/- as mentioned hereinabove. No sufficient opportunity for disallowance of deduction u/s 80P(2)(a)(vi) as claimed has been given to the assessee. In the facts and circumstances of the case and in the interest of justice, all the grounds of the assessee’s appeal are set aside to the file of the AO, who will decide the issue denovo but after affording adequate opportunity of being heard to the assessee with respect to the production of books of account, disallowance of deduction u/s 80P(2)(a)(vi) and allowance of deduction u/s 80P(2)(a)(vi). Accordingly, the arguments made by Ld. DR will not help the revenue. Thus, all the grounds of the assessee are allowed for statistical purposes.”

During the first assessment the gross receipt of the assessee was determined Rs.

69,02,988/- and the profit @ of 6% was assessed on the gross receipt amount to

Rs.4,14,180/-. As per the direction of the ITAT, the Assessing Officer had

completed the assessment and the books of account was rejected u/s 145 of the

Act. The gross contract receipt of the assessee was determined by the revenue

amount to Rs.85,89,152/-. Accordingly, the profit was calculated @ of 6% on the

3 ITA No. 39/Asr/2018 Malwa Coop. L & C Society Ltd. v. ITO gross contract receipt which is amount to Rs.5,15,350/-. The deduction was

allowed u/s 80P(2)(vi) of the Act. The society is engaging in collective disposal of

labour of his member and entitled for deduction u/s 80P(2)(a)(vi). The gross

contract receipt was declared by the assessee amount to Rs.69,02,988/- which was

enhanced by the revenue amount to Rs.85,89,152/- and had determined net profit

@ of 6% which was the same in both the assessments. The net profit was

calculated amount to Rs.2,07,675/- on enhanced gross contract and tax was levied.

Aggrieved, the assessee filed an appeal before the ld. CIT(A). The ld. CIT(A)

uphold the order of the ld. AO related to enhancement of turnover. Further, the

appellate authority converted the deduction u/s 80P(2)(a)(vi) to 80P(2)(c) of the

Act. Being aggrieved, the assessee filed an appeal before us.

submission which containing page nos. 1 to 84, which is kept in the record. As per

the ld. counsel, the assessee received the gross contract receipt from working in

different department of Government of Punjab. The turnover which is determined

by the ld. AO is gross receipt which was the contract value. The lot of other parts

are deducted from turn over. In the result, the gross contractual value is calculating

Rs.69,02,988/-. Accordingly, the ld. counsel had submitted a letter to the ld. AO

which is annexed in page no. 33 to 35 of APB with details calculation of turnover

of assessee. The calculation of gross receipt is extracted as follows:

4 ITA No. 39/Asr/2018 Malwa Coop. L & C Society Ltd. v. ITO “Total contract receipts during the year 8589152.00 Less:- Deduction out of Gross Contract Receipts during the relevant A.Y. 2010-11

TDS 182181.00 VAT 343564.00 Security 425156.00 L. Cess 85886.00 Other Deduction 41061.00

1077848.00 1077848.00

Net Contract receipts as per form No. 16-A 7511304.00 Net contract receipts as per

Audit Report of Co-op. Dept./cheques deposited in Coop. Bank 6805988.00

Net Difference 705316.00

Thus cheques of contract receipts amounting to Rs.705316/- were received after 31.03.2010 i.e. in A.Y. 2011-12.”

The ld. counsel of the assessee accordingly requested to fix the turnover

amount to Rs.69,02,988/-. In this respect, the counsel of the assessee further

mentioned that the ld. Revenue Authority has no power to go beyond the

jurisdiction of the order of Hon’ble ITAT. Hon’ble ITAT already determined the

turnover, and the direction was made accordingly. Also related to deduction u/s

5 ITA No. 39/Asr/2018 Malwa Coop. L & C Society Ltd. v. ITO 80P(2)(a)(vi) specific direction was made by the Hon’ble ITAT in its order dated

13.10.204 in ITA No. 483/Asr/2014.

authorities.

record. In its fact, that the gross receipt should be determined by allowing the

reasonable deduction of the items like TDS, VAT, security letter cess and other

deduction. Accordingly, the assessee made a correct calculation related to

calculation of the contract receipt. Both the Revenue authorities cannot go beyond

the jurisdiction of all the orders of Hon’ble ITAT. Hon’ble ITAT directed denavo

assessment it does not mean that the essence of the judgment should be avoided in

any means. For, the deduction u/s 80P(2)(a)(vi) of the Act the assessee is eligible.

Respectful observation of the order of Punjab & Haryana High Court in the case of

CIT v. Gurdaspur Hardochhenni Coop. L/C Society [2008] 303 ITR 145

(P&H). The observation of the Hon’ble Court is extracted as follows:

“5. After hearing learned counsel for the parties, we are of the considered view that once it had been found as a fact, on the strength of the report of auditors on record, that the assessee-society is a registered society and its purpose is of collective disposal of labour for discharge of financial and social interests of the labourers of the particular area who are its members, the Tribunal was not wrong in allowing the deduction as contemplated under section 80P(2)(a)(vi) of the Act to the assessee. No question has been claimed on perversity of findings of fact.”

6 ITA No. 39/Asr/2018 Malwa Coop. L & C Society Ltd. v. ITO Accordingly, the gross receipt of the assessee is restricted amount to

Rs.69,02,988/-. There is no change in the profit per centage. Accordingly, the

assessee is eligible u/s 80P(2)(a)(vi) of the Act.

Order pronounced in the open court on 11.08.2022

Sd/- Sd/- (Dr. M. L. Meena) (Anikesh Banerjee) Accountant Member Judicial Member *GP/Sr. PS* Copy of the order forwarded to: (1) The Appellant: (2) The Respondent: (3) The CIT(A), (4) The CIT concerned (5) The Sr. DR, I.T.A.T (6) The Guard File True Copy By Order