TMI Blog2018 (8) TMI 1855X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 22.03.2016 and dated 07.12.2016 respectively. Appeal of the Revenue is therefore dismissed. - 1498, 1076, 1211/Ahd/2015/SRT for A.Y.2009-10 And 2010-11 - - - Dated:- 3-8-2018 - Shri C.M.Garg, Judicial Member And Shri O.P.Meena, Accountant Member Assessee by Shri Mitish S. Modi CA Revenue by Shri Dileep Kumar Sr.DR ORDER O. P. Meena, 1. These appeals filed by the Revenue and Assessee are directed against the separate order of learned Commissioner of Income tax (Appeals) V, Surat(in short the CIT (A) ) dated 30.03.2012 pertaining to Assessment Year 2009-10 and common order of ld.CIT(A)-3, Surat dated 04.02.2015 pertaining to Assessment Year 2010-11. 2. Grounds raised by the Revenue are as under : 1. The Ld.CIT(A) has erred in law and or facts in deleting the addition made by the assessing officer at ₹ 2,04,008,629/- on account of disallowance U/s.14A(3) despite the fact that the A.O. has correctly made the addition. 2. The Ld.CIT(A) has erred in law and or on facts in deleting the addition made by the assessing officer at ₹ 2,04,08,629/- on account of disallowance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the earning of interest and dividend from investment with other co-operative societies. The assessee has also relied in the case of CIT vs. UP Rajya Sahakari Bhumi Vikas Bank Ltd. [1994] 208 ITR 758 (All) and CIT vs Haryana State Co-operative Society [1998] 234 ITR 71 (P H). However, the AO was of the view that section 14A is applicable in such cases where part of the income is not included in the total income. Section 14A does not speak of income which is exempted from taxation. On the other hand, it speaks of income which is not included in the total income. The gross total income is defined u/s.80B of the Act to mean that income as computed in accordance with the provisions of the Act before making any deduction under chapter VI-A. The AO, therefore, referring to various case laws worked out disallowance u/s.14A read with Rule 8D at ₹ 2,04,08,629/- as against the exempt income of ₹ 2,26,539/- shown during the year under consideration and added the same to the total income of the assessee. 5. Being aggrieved, the assessee has filed appeal before the ld.CIT(A), wherein it was claimed that interest income is earned with other co-operative societies we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ives and unwarrantedly applied Rule 8D read with section 14A of the Act. In my considered view, there is no lawful ground to apply Rule 8D read with section 14A of the Act in the present case where there is no element of exempt income, but the interest and dividend income made from the years investments in other co-operative societies eligible for deduction u/s 80P(2)(b) of the Act. It is also found from the submissions made by the AR that the appellant society has not claimed the deduction u/s.80P(2)(a)(i) of the Act but claimed deduction u/s.80P(2)(d) of the Act only. The AR has also relied upon several judgments including the recent judgment of ITAT Delhi ACIT vs. Krisak Bharti Co-operative Ltd. and also judgment of Gujarat high court CIT vs. Summersibles Ltd. Which are found squarely covering issue in the case of the appellant. The appeals filed before me for the earlier Asstt. Years 2006-07, 2007- 08 2008-09 having the identical issues had already been decided in favour of the appellant society. In view the identical set of facts and circumstances of the case as in the earlier years, the addition made on this account is hereby deleted and this ground of appeal is allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 02.08.2013 [paper book page no.70 to 90] of D Bench, Ahmedabad. Therefore, it was contended that the present appeal is squarely covered and also to be decided in favour of the assessee society. In support of his contentions the ld.AR has also relied on the following cases CIT vs Kribhco [2012] 252 ITR (Del) 374, CIT vs. Kings Export [2009] 318 ITR 100 (P H), ACIT vs. Osmanabad Janta Bank Ltd. [2013] 152 TTJ (Pune) [UO-1, JCIT vs. American Express Bank Ltd. [2012] 149 TTJ 683 Mumbai. It was further submitted that decision of Punjab State Co-operative Milk Producers Federation Ltd. vs. ITO, ITAT Chandigarh (supra) is not applicable. As in this case shares and deposits are permitted u/s.71 of the Gujarat Co-operative societies Act 1961 with other co-operative societies. The assessee has claimed the deduction on the income earned by way of interest and dividend u/s.80P(2)(d) of the Act. Thus, such investment made with other co-operative societies and co-operative banks are not the member of the assessee society nor there is a case of earning of interest on advances to the member co-operative societies for the purpose of procurement of milk etc., Therefore, the activities of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce sheet as well as p l account were available in all the years that the A.O. gave these figures on which the ld.CIT(A) relied upon, had taken from either balance sheet or p l account. Thus, there is no additional evidence submitted by the appellant before the CIT(A) in A.Y. 2006-07. We dismiss the appeal on ground no.1 in A.Y.06-07. Further the A.O. considered Hon'ble Supreme Court decision in Distributors (baroda) P. Ltd. vs. Union of India [1985] 155 ITR 120 (SC), wherein, it was held that deduction u/s.80M is to be calculated with reference to amount on dividend computed in accordance with the provisions of the Act and forming on the gross total income and not with reference to full amount of dividend received by the assessee. The Hon'ble Supreme Court decision is squarely applicable on deduction under any Section in Chapter VIA and is to be allowed on the net income. However, in the assessee s case, interest expenses were incurred for acquiring debenture, deposit with member society, Fix Deposit of member society, employee saving accounts, interest on over draft facilitate from bank and bank commission, which was claimed by the appellant u/s.80P(2)(d)(a)(i). For the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act. 15. Since the above ground of appeal are related to disallowance 14A deleted by the CIT(A), hence, these are being considered together. 16. Both parties have agreed that the facts of disallowance for this year are also same as in the assessment year 2009-10. Therefore, the findings given for A.Y. 2009-10 in the Revenue s appeal would apply mutatis-mutandis to this year also. Therefore, following the same, the appeal of the Revenue is dismissed for the reasons as discussed by us in the ITA No.1498/Ahd/2012 for A.Y. 2009-10 in this order as mentioned in above paras. 17. In the result, appeal of the Revenue is dismissed. ITA No.1211/Ahd/2015 for A.Y.2010-11 (by Assessee): 18. The ground no.1 to 5 relates to confirming the order of denying the deduction claim u/s.80P(2)(d) of the Act to the extent of ₹ 1,44,03,457/- and resulting arbitrary and perverse observations, hence, the order passed by the CIT(A), Surat liable to struck down. Further, the Authorities have conveniently ignored the order of ITAT, Ahmedabad in ITA No.367 3386/Ahd/2010 and 1739/Ahd/2010 deciding same an identical issue of deduction u/s.80P(2)(d) of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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