Delh State Cooperative Bank Ltd, v. ITO Co. Ward-30 (2),

ITA 2234/DEL/2008 | 2000-2001
Pronouncement Date: 26-02-2010 | Result: Partly Allowed

Appeal Details

RSA Number 223420114 RSA 2008
Assessee PAN NUARY2010A
Bench Delhi
Appeal Number ITA 2234/DEL/2008
Duration Of Justice 1 year(s) 8 month(s) 16 day(s)
Appellant Delh State Cooperative Bank Ltd,
Respondent ITO Co. Ward-30 (2),
Appeal Type Income Tax Appeal
Pronouncement Date 26-02-2010
Appeal Filed By Assessee
Order Result Partly Allowed
Bench Allotted B
Tribunal Order Date 26-02-2010
Date Of Final Hearing 23-02-2010
Next Hearing Date 23-02-2010
Assessment Year 2000-2001
Appeal Filed On 09-06-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B NEW DELHI) BEFORE SHRI RAJPAL YADAV AND SHRI R.C. SHARMA I.T.A. NO. 2234/DEL/2008 ASSESSMENT YEAR: 2000-01 THE DELHI STATE CO-OPERATIVE BANK LTD. VS INCOME-T AX OFFICER 31-NETAJI SUBHASH MARG DARYAGANJ CO. WARD 30(2) DELHI-1100 02 NEW DELHI. (APPELLANT) (RESPONDENT) I.T.A. NO. 2643/DEL/2008 ASSESSMENT YEAR: 2000-01 INCOME-TAX OFFICER VS. THE DELHI STATE CO-OPERATI VE BANK CO. WARD 30(2) LTD. 31-NETAJI SUBHASH MARG NE W DELHI. DARYAGANJ DELHI-1100 02 (APPELLANT) (RESPONDENT) I.T.A. NOS. 2051 & 2052/DEL/2009 ASSESSMENT YEARS: 2004-05 & 2006-07 THE DELHI STATE CO-OPERATIVE BANK LTD. VS INCOME-T AX OFFICER 31-NETAJI SUBHASH MARG DARYAGANJ CO. WARD 30(2) DELHI-1100 02 NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI SL GUPTA CA RESPONDENT BY: SHRI STEPHEN GEO RGE CIT(DR) ORDER PER RAJPAL YADAV: JUDICIAL MEMBER IN ASSESSMENT YEAR 2000-01 THE ASSESSEE AND REVEN UE ARE IN CROSS- APPEALS AGAINST THE ORDERS OF LEARNED CIT(A) DATED 12.5.2008 WHEREAS IN 2 ASSESSMENT YEARS 2004-05 AND 2006-07 ASSESSEE ALONE IS IMPUGNING THE ORDER OF LEARNED CIT(A) DATED 30.3.2009 AND 17.3.20 09 PASSED ON THE APPEALS OF THE ASSESSEE RESPECTIVELY. SINCE COMMON ISSUES ARE INVOLVED IN ALL THESE APPEALS WE HEARD THEM TOGETHER AND DEEM IT A PPROPRIATE TO DISPOSE OF THEM OFF BY THIS COMMON ORDER. THE GROUNDS OF APPEA LS TAKEN BY THE ASSESSEE ARE NOT IN CONSONANCE WITH RULE 8 OF THE I TATS RULES THEY ARE DESCRIPTIVE AND ARGUMENTATIVE IN NATURE. 2. THE FIRST COMMON ISSUE RAISED BY THE ASSESSEE IN ITS APPEAL IS WHETHER DEDUCTION UNDER SEC. 80-P(2)(A)(I) OF THE INCOME-TA X ACT 1961 IS ADMISSIBLE ON THE AMOUNT OF INTEREST RECEIVED UNDER SEC. 244A ON THE REFUND OF TAX. THE LEARNED COUNSEL FOR THE ASSESSEE AT THE VERY OUT SE T SUBMITTED THAT THIS ISSUE WAS REFERRED TO THE SPECIAL BENCH OF THE ITAT IN TH E CASE OF MAHARASTHRA STATE CO-OPERATIVE BANK LTD. VS. ACIT IN ITA NO.710 8/M/04. THE SPECIAL BENCH HAS DECIDED THE ISSUE ON 2 ND JANUARY 2010 AND HELD DEDUCTION UNDER SEC. 80-P(2)(A)(I) WILL BE ADMISSIBLE TO THE ASSESS EE ON THE AMOUNT OF INTEREST RECEIVED UNDER SEC. 244A ON THE REFUND OF TAX. LEAR NED DR WAS UNABLE TO CONTROVERT THE CONTENTION OF THE LEARNED COUNSEL FO R THE ASSESSEE. 3. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND GON E THROUGH THE MATERIAL AVAILABLE BEFORE US CAREFULLY. SUB-SECTION (1) OF SEC. 80-P 3 CONTEMPLATES THAT IN THE CASE OF AN ASSESSEE BEING A CO-OPERATIVE SOCIETY THE GROSS TOTAL INCOME INCLUDES ANY INCOME REFERRED TO IN SUB-SECTION (2) THERE SHALL BE DEDUCTION IN ACCORDANCE WITH AND SUBJECT T O THE PROVISIONS OF THIS SECTION THE SUMS SPECIFIED IN SUB-SECTION (2) IN C OMPUTING THE TOTAL INCOME OF THE ASSESSEE. SUB-SECTION (2) PROVIDES THAT IN C ASE OF A CO-OPERATIVE SOCIETY ENGAGED IN CARRYING ON THE BUSINESS OF BANK OR PROVIDING CREDIT FACILITY TO ITS MEMBERS (ONLY RELEVANT FOR THE PURP OSE OF PRESENT APPEALS) THE WHOLE AMOUNT OF PROFIT AND GAINS OF BUSINESS ATTRIB UTABLE TO SUCH ACTIVITY WOULD BE ALLOWED AS A DEDUCTION UNDER SUB-SECTION ( 1) OF SECTION 80-P OF THE ACT. THE SPECIAL BENCH OF THE ITAT HAD MADE A DETAI LED ANALYSIS OF THESE PROVISIONS. IN ITS ANALYSIS ITAT HAS CONSTRUED THE EXPRESSION PROFITS AND GAINS USED IN SUB-SECTION (2) OF SEC. 80-P AND IN THAT STRIDE ITAT HAS OBSERVED THAT EXPRESSION PROFIT IS THAT WHICH AC CRUES FROM THE THING AND WHICH FLOWS OUT OF THE TRADE OR OCCUPATION BUT THE TERM GAIN IS OF WIDER IMPORT THEN THE WORD PROFIT. GAIN IS A GENERAL TE RM INCLUDING PECUNIARY AND NON-PECUNIARY BENEFIT BUT PROFIT IS SPECIFIC. I N OTHER WORDS THE TERM GAIN IS GENIUS OF WHICH THE TERM PROFIT IS ITS SPECIES. THUS IT IS EXPLICITY CLEAR THAT THE GAIN IS WIDER TERM AND INCLUDES ITEM S OTHER THAN PROFIT ALSO. ACCORDING TO THE SPECIAL BENCH EMPLOYMENT OF EXPRE SSION PROFIT AND 4 GAINS IN SEC. 80-P(2) DEMONSTRATES THE INTENTION O F THE LEGISLATURE THAT THE BENEFIT OF DEDUCTION IS NOT CONFINED TO THE INCOME ARISING DIRECTLY FROM THE BANKING BUSINESS AS COVERED BY PROFIT WHICH FAL LS UNDER THE HEAD PROFIT AND GAINS OR BUSINESS OR PROFESSION BUT ALSO INC LUDES OTHER ITEMS OF INCOME (AS COVERED BY GAINS) WHICH HAS SOME RELATI ON WITH THE BUSINESS OF BANKING EVEN THOUGH THEY DO NOT FALL UNDER THE HEAD BUSINESS INCOME. THE INSTANCE OF SUCH INCOME WHICH FALL WITHIN THE TERRI TORY OF GAIN MAY BE ANYTHING WHICH HAVE SOME RELATION BUT DO NOT DIRECT LY EMANATE FROM THE CARRYING ON OF THE BUSINESS OF BANKING. THE ITAT AT THE END HELD THAT ASSESSEE WOULD BE ENTITLED TO DEDUCTION UNDER SEC. 80-P(2)(A)(I) ON THE AMOUNT OF INTEREST RECEIVED UNDER SEC. 244A OF THE ACT BECAUSE THIS INTEREST HAS A DIRECT LINK TO SOME EXTENT WITH ITS BANKING B USINESS ASSESSEE HAS PAID THE TAX IN THE SHAPE OF COLLECTION OF TDS WHICH WA S EXCESS AND A REFUND WAS DUE. RESPECTFULLY FOLLOWING THE ORDER OF THE SP ECIAL BENCH WE DIRECT THE AO IN THE CASE OF PRESENT ASSESSEE ALSO WHICH I S ENGAGED IN THE BANKING BUSINESS ONLY TO GRANT DEDUCTION UNDER SEC. 80-P(2 )(A)(I) ON THE INTEREST ON INCOME-TAX REFUND IN ASSESSMENT YEARS 2000-01 200 4-05 AND 2006-07. NO OTHER GROUND WAS PRESSED BY THE ASSESSEE IN ASSESSM ENT YEAR 2000-01 AND 2006-07 HENCE THESE APPEALS ARE PARTLY ALLOWED. 5 4. IN ASSESSMENT YEAR 2000-01 THE REVENUE HAS PLEA DED THAT LEARNED CIT(A) HAS ERRED ALLOWING THE DEDUCTION OF RS.2 25 79 383 UNDER SEC. 80- P(2)(A)(I) OF THE ACT ON THE INTEREST INCOME EARNED BY THE ASSESSEE FROM THE INVESTMENT MADE WITH ICICI BANK/IDBI. 5. WITH THE ASSISTANCE OF LEARNED REPRESENTATIVES WE HAVE GONE THROUGH THE RECORD CAREFULLY. THE SPECIAL BENCH OF THE ITAT IN THE CASE OF SURAT DISTRICT CO-OPERATIVE BANK VS. ITO REPORTED IN 85 I TD 1 HAS CONSIDERED AN IDENTICAL ISSUE AND HELD THAT INTEREST INCOME RECEI VED BY AN ASSESSEE FROM INVESTMENT IN GOVERNMENT SECURITIES AND OTHER APPRO VED MODES WOULD QUALIFY FOR DEDUCTION UNDER SEC. 80-P(2)(A)(I) OF T HE ACT. WE FIND THAT LEARNED CIT(A) HAS RELIED UPON THE ORDER OF THE HON 'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. PRAGATI CO-OPERATIVE BANK AN D CIT VS. BARODA PEOPLE CO-OPERATIVE BANK REPORTED IN 278 ITR 170 AND 280 I TR 282 RESPECTIVELY. TAKING INTO CONSIDERATION THE CASE LAWS RELIED UPON BY THE LEARNED CIT(A) COUPLED WITH THE SPECIAL BENCHS ORDER OF THE ITAT IN THE CASE OF SURAT CO- OPERATIVE BANK WE DO NOT FIND ANY MERIT IN THE SOL ITARY GROUND OF APPEAL RAISED BY THE REVENUE. IT IS REJECTED. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. 6 7. IN ASSESSMENT YEAR 2004-05 ASSESSEE HAS RAISED O NE MORE GRIEVANCE. IT RELATES TO GRANT OF DEDUCTION IN RESPECT OF RECEIPT RECEIVED ON SALE OF NEWSPAPERS AND WASTE BUILDING MATERIAL AND FURNITUR E NAMELY CHAIR ETC. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THI S ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE ORDER OF THE ITAT MUMBAI IN THE CASE OF KURLA NAGRIK SEHKARI CO-OPERATIVE BANK LTD. VS. ITO RENDE RED IN ITA NO.5027/M/06. 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND GON E THROUGH THE MATERIAL AVAILABLE BEFORE US CAREFULLY. FROM PERUSA L OF THE RECORD IT REVEALS THAT ASSESSEE HAS SOLD OLD STATIONERY AND NEWSPAPER S FOR A SUM OF RS.11 000. IT HAS SOLD DEMOLISHED BUILDING MATERIAL FOR RS.41 000. SIMILARLY IT EARNED A PROFIT ON SALE OF VEHICLE AMOUNTING TO RS.10 853. T HE ASSESSEE CLAIMED A DEDUCTION OF THESE AMOUNTS UNDER SEC. 80-P(2)(A)(I) THE ASSESSING OFFICER HAS NOT DISCUSSED ANY ASPECT ON THESE ISSUES RATHER HE STRAIGHTWAY TOOK THEM FOR DISALLOWANCE IN THE COMPUTATION OF INCOME. THE LEARNED COUNSEL FOR THE ASSESSEE THOUGH CONTENDED THAT THIS ISSUE IS COVERE D BY THE ORDER OF THE ITAT IN THE CASE OF KURLA NAGRIK SEHKARI CO-OPERATI VE BANK LTD. BUT FAILED TO PLACE ON RECORD COPY OF THE ORDER. IT IS NOT A R EPORTED ORDER THUS IT IS DIFFICULT FOR US TO FIND OUT THE REASONING. SIMILAR LY NO REASONING ARE 7 DISCERNIBLE EITHER FROM THE ASSESSMENT ORDER FOR DI SALLOWANCE OR FROM THE LEARNED CIT(A)S ORDER FOR CONFIRMATION OF THE DISA LLOWANCE. FACED WITH THE ABOVE SITUATION WE DEEM IT APPROPRIATE TO SET ASID E THIS ISSUE TO THE FILE OF THE A.O. TO DECIDE THIS ISSUE FRESH AFTER TAKING IN CONSIDERATION THE ORDER IN THE CASE OF KURLA NAGRICK SEHKARI CO-OPERATIVE BANK LTD. ASSESSEE IS DIRECTED TO PLACE ON RECORD COPY OF THIS ORDER BEFO RE THE ASSESSING OFFICER. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE FOR AS SESSMENT YEAR 2004-05 IS ALLOWED FOR STATISTICAL PURPOSES. 10. NO OTHER GROUND WAS PRESSED BY THE ASSESSEE AT THE TIME OF HEARING HENCE ALL OTHER GROUNDS ARE REJECTED. DECISION PRONOUNCED IN THE OPEN COURT ON 26.02.201 0 ( R.C. SHARMA ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 26/02/2010 MOHAN LAL COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR:ITAT 8 ASSISTANT REGISTRAR