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The ITO Ward-1 Patan Vs. Patan Taluka Prathmik Shalaona Shikshako Ni Nana Dhirnari Sahakari Mandali Ltd.
May, 07th 2014
          ,  Û ,
          ,    ,  
      IN THE INCOME TAX APPELLATE TRIBUNAL,
        AHMEDABAD "C" BENCH, AHMEDABAD
      BEFORE SHRI G.C. GUPTA, VICE PRESIDENT (AZ) And
         SHRI T.R.MEENA, ACCOUNTANT MEMBER
                ./I.T.A.        No.24/Ahd/2013
         ( [ [ / Assessment Year : 2009-10)
 The ITO                 / Patan Taluka Prathmik
 Ward-1                   Vs. Shalaona Shikshako Ni Nana
 Patan                          Dhirnari Sahakari Mandali
                                Ltd.
                                First Floor, Devbhumi
                                Complex,Opp.S.T.Stand,
                                Patan­384 265
     . /  . / PAN/GIR No. : AAGFP 7121 F
   ( /Appellant)          ..         (× / Respondent)
                             And
           CO No.42/Ahd/2014 ­ A.Y. 2009-10
            ( in ITA No.24/Ahd/2013-AY.2009-10 )

Patan Taluka Prathmik Shalaona vs.        The ITO
Shikshako Ni Nana                         Ward-1
Dhirnari Sahakari                         Patan
Mandali Ltd., Patan
( Cross Objector )              ..        ( Respondent )
           Assessee by :
                                         Shri O.P. Meena,Sr.DR
           Revenue by :
                                          Shri M.G.Patel, A.R.

            / Date of Hearing       :                23/04/2014
            /Date of Pronouncement :                 02/05/2014
                             / O R D E R

PER SHRI G.C.GUPTA, VICE PRESIDENT (AZ) :
      This appeal by the Revenue and the Cross Objection by the
Assessee are directed against the order of ld.CIT(A)-Gadhinagar dated
25/10/2012 for the Asst.Year 2009-10. These were heard together and
                                         ITA No.24/Ahd/2013 (By Revenue)
                                         CO No.42/Ahd/2014 (By Assessee)
                                               ITO vs. Patan Tal.Prathmik
                                     Shalaona Shikshako-ni- Nana Dhirnari
                                                    Sahakari Mandali Ltd.
                                                      Asst.Year ­ 2009-10
                                   -2-

are being disposed of by this consolidated order for the sake of
convenience.

ITA No.24/Ahd/2013 (Revenue's appeal)
2.     The only ground of Revenue's appeal reads as under:-
       1.     The learned CIT(Appeals) has erred in law and on facts in
             allowing deduction u/s.80P(2)(a)(i) of the IT Act amounting
             to Rs.24,07,397/-.

2.1.   The ld.Sr.DR has relied on the order of the Assessing Officer. He
referred to the relevant portion of the assessment order in support of the
case of the Revenue. He submitted that the assessee-society was not
covered under the agricultural credit society as their bye-laws does not
permit to provide the finance facilities for the agricultural purposes only.
The ld.counsel for the assessee submitted that the issue in the ground of
appeal of the Revenue is covered in favour of assessee with the decision
of Hon'ble Gujarat High Court in the case of CIT vs. Jafari Momin
Vikas Co-op.Credit Society Ltd. reported at 362 ITR 331 (Guj.), wherein
in similar facts, it was held that the assessee was entitled to deduction
u/s.80P of the IT Act, 1961. He relied on the order of the CIT(A).





3.     We have considered the rival submissions and perused the orders
of the Assessing Officer and the CIT(A) as well as the decision of
Hon'ble Jurisdictional High Court in the case of CIT vs. Jafari Momin
Vikas Co-op.Credit Society Ltd.(supra). We find that the issue in this
case is covered in favour of assessee with the decision of Hon'ble
                                          ITA No.24/Ahd/2013 (By Revenue)
                                          CO No.42/Ahd/2014 (By Assessee)
                                                ITO vs. Patan Tal.Prathmik
                                      Shalaona Shikshako-ni- Nana Dhirnari
                                                     Sahakari Mandali Ltd.
                                                       Asst.Year ­ 2009-10
                                    -3-

Jurisdictional High Court in the case of CIT vs. Jafari Momin Vikas Co-
op. Credit Society Ltd.(supra). The undisputed facts of the case are that
the assessee was not allowed to do banking business as defined under
Banking Regulation Act and, therefore, is not a co-operative bank and
accordingly is not excluded from the benefit of deduction u/s.80P(2)(a)(i)
of the IT Act,1961 as it does not fall under the exceptions as provided
u/s.80P(4) of the Act. The CIT(A) has cited certain decisions of the
ITAT, wherein various Benches of the ITAT have decided the issue in
favour of assessee. There being no mistake in the order of the CIT(A) on
this issue, the same is confirmed and the ground of appeal of the Revenue
is dismissed.


CO No.42/Ahd/2014 (By Assessee)
4.     The ld.counsel for the assessee submitted that the cross-objection
of the assessee was late by one year and ten months and has filed an
Affidavit of the assessee submitting that it has now come to the
assessee's knowledge that the Hon'ble Jurisdictional High Court in the
case of CIT vs. Jafari Momin Vikas Co-op. Credit Society Ltd.(supra)
vide their dated 15/01/2014 have decided the issue of deduction
u/s.80P(2)(a)(i) of the IT Act in favour of assessee.


4.1.   The ld.Sr.DR has opposed the submission of the ld.counsel for the
assessee on the issue of condonation of delay in filing the cross-objection
by the assessee.
                                          ITA No.24/Ahd/2013 (By Revenue)
                                          CO No.42/Ahd/2014 (By Assessee)
                                                ITO vs. Patan Tal.Prathmik
                                      Shalaona Shikshako-ni- Nana Dhirnari
                                                     Sahakari Mandali Ltd.
                                                       Asst.Year ­ 2009-10
                                    -4-

5.       We have considered the rival submissions. In the facts of the case
and in view of the recent decision of the Hon'ble Jurisdictional High
Court in the case of CIT vs. Jafari Momin Vikas Co-op. Credit Society
Ltd.(supra), we hold that it is a fit case for condonation of delay in filing
the cross-objection by the assessee, which is accordingly condoned.


6.       The only ground raised in assessee's cross-objection reads as
under:-
         1.    The learned CIT(A)-IV, Baroda has erred in not allowing
               deduction u/s.80P(2)(a)(i) in respect of interest of
               Rs.5,52,119/-.

7.       The ld.counsel for the assessee submitted that the assessee's
deposits were required for business purpose only as some liquidity of
funds have to be maintained by the assessee.     He submitted that with the
decision of Hon'ble Jurisdictional High Court in the case of CIT vs.
Jafari Momin Vikas Co-op. Credit Society Ltd.(supra), the part of the
addition in respect of interest amounting to Rs.5,52,119/- by not allowing
the deduction u/s.80P(2)(a)(i) of the Act by the CIT(A) should also be
deleted. The ld.Sr.DR has opposed the submission of the ld.counsel for
the assessee and he relied on the orders of the AO and CIT(A) on this
issue.
8.       We have considered the rival submissions. We find that there is
no finding on fact that whether the deposits were maintained by the
assessee for liquidity of funds for the business purpose of the assessee
                                          ITA No.24/Ahd/2013 (By Revenue)
                                          CO No.42/Ahd/2014 (By Assessee)
                                                ITO vs. Patan Tal.Prathmik
                                      Shalaona Shikshako-ni- Nana Dhirnari
                                                     Sahakari Mandali Ltd.
                                                       Asst.Year ­ 2009-10
                                    -5-




and whether the ratio of the decision of Hon'ble Jurisdictional High
Court in the case of CIT vs. Jafari Momin Vikas Co-op. Credit Society
Ltd.(supra) is applicable to the part of deduction u/s.80P(2)(a)(i) of the
Act in respect of interest amounting to Rs.5,52,119/- and accordingly the
issue raised in the cross-objection of the assessee is restored to the file of
AO to decide afresh in accordance with law on merits, after providing
reasonable opportunity of       hearing to the assessee.          We direct
accordingly.
9.    In the combined result, the appeal of the Revenue is dismissed,
whereas the cross-objection filed by the Assessee is allowed for
statistical purposes.

          Sd/-                                      Sd/-
   ( T.R. MEENA )                             ( G.C. GUPTA )
ACCOUNTANT MEMBER                          VICE PRESIDENT (AZ)

Ahmedabad;        Dated       2/ 5 /2014

.., .../T.C. NAIR, Sr. PS
    /
      Copy of the Order forwarded to :
1.    / The Appellant
2.   × / The Respondent.
3.      / Concerned CIT
4.    () / The CIT(A)-Gandhinagar
5.    ,   ,  / DR, ITAT, Ahmedabad

6.   [  / Guard file.
                                                              / BY ORDER,

               ×  //True Copy//
                                              /  (Dy./Asstt.Registrar)
                                              /
                                        ,  / ITAT, Ahmedabad
                                        ,

 
 
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