M/s District Cooperative Bank Limited, Civil Lines-II, Bijnor. Vs. Assistant Commissioner of Income Tax,Najibabad.
August, 12th 2014
IN THE INCOME TAX APPELLATE TRIBUNAL
`B' : NEW DELHI
DELHI BENCH `B
BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND
GARG, JUDICIAL MEMBER
SHRI CHANDRA MOHAN GARG,
Nos.2984/Del/2013 & 2985/Del/2013
Years : 2009-
Assessment Years 2007-08
2009-10 & 2007-
M/s District Cooperative Vs. Assistant Commissioner of
Bank Limited, Income Tax,
Civil Lines- Najibabad.
PAN : AABFD2205R.
Appellant by : Shri P.S. Kashyap, CA.
Respondent by : Smt. Parwinder Kaur, Sr.DR.
PER G.D. AGRAWAL, VP :
These appeals by the assessee are directed against the order of
learned CIT(A), Bareilly dated 1st March, 2013 for the AY 2009-10 &
2. The only ground raised in both these appeals by the assessee is
for seeking exemption of dividend received by the assessee
cooperative society amounting to `70,56,000/- for AY 2007-08 and
`3,06,200/- for AY 2009-10.
3. Since the facts in both the years are almost similar, we shall deal
herein below the facts relating to AY 2007-08.
4. For the year under consideration, the assessee received the
dividend of `70,56,200/- from the following three companies:-
2 ITA-2984 & 2985/D/2013
(i) `67,50,000/- U.P. Coop. Bank Ltd.
(ii) `1,00,000/- KRIBHCO
(iii) `2,06,200/- Indian Fertilizers.
5. The assessee claimed the same to be exempt which was denied
by the Assessing Officer and learned CIT(A). Hence, this appeal by the
6. We have heard the arguments of both the sides and perused
relevant material placed before us. At the time of hearing before us,
learned counsel fairly conceded that the dividend is not exempt under
Section 10(34) read with Section 115-O because the companies from
whom the assessee received the dividend has not paid dividend
distribution tax. His claim is that the dividend received by the
assessee company is exempt on account of mutuality because those
companies which paid dividend to the assessee are also either
cooperative banks or the companies which are basically rendering
services to the cooperative societies. We are unable to accept the
contention of the assessee. When the assessee claims any exemption
on the ground of mutuality, the burden is upon the assessee to
establish so. In this case, the learned counsel could not justify how the
dividend received by the assessee from three different companies is
covered under the concept of mutuality. The assessee has received
the dividend on account of assessee's investment in those companies.
The dividend is not the contribution to the assessee by those
companies and moreover, the assessee is not rendering services to
them. In view of the above, we hold that the assessee's contention
that dividend received from those companies is exempt on account of
mutuality is untenable. The same is rejected.
3 ITA-2984 & 2985/D/2013
7. The facts are similar in AY 2009-10 with the only difference in the
quantum of dividend which is `3,06,200/- instead of `70,56,000/- in AY
2007-08. For the detailed discussion in paragraph 6 above, we hold
that the dividend received in AY 2009-10 also cannot be said to be
exempt within the concept of mutuality. Accordingly, the appeals of
the assessee in both the years are dismissed.
8. In the result, the appeals of the assessee are dismissed.
Decision pronounced in the open Court on 8th August, 2014.
(CHANDRA MOHAN GARG) AGRAWAL)
JUDICIAL MEMBER VICE PRESIDENT
Dated : 08.08.2014
Copy forwarded to: -
1. Appellant : M/s District Cooperative Bank Limited,
2. Respondent : Assistant Commissioner of Income Tax,
5. DR, ITAT